How Mainland Cos. Can Open Offshore RMB Accounts An In-Depth Look at Paths and Challenges

How Can Mainland Chinese Companies Open Offshore RMB Accounts? A Comprehensive Analysis of Paths and Challenges

In the context of global economic integration, more and more mainland Chinese companies are expanding overseas and increasingly using the RMB for international trade and cross-border investment settlements. At the same time, the development of the offshore RMB market has provided mainland enterprises with a new financial management tool - the NRA Non-Resident Account in RMB. By opening such accounts, companies can hold RMB funds offshore and manage cross-border capital more flexibly, thereby reducing exchange rate risks.

1. What Is an Offshore RMB Account?

An offshore RMB account typically refers to an RMB-denominated account opened at a bank outside mainland China, primarily used by non-residents - such as overseas companies or institutions - to hold and manage RMB assets. An NRA account opened by a mainland company at an overseas bank falls into this category. It can receive RMB funds from abroad and be used for cross-border settlements and investments.

The key difference between offshore and onshore RMB accounts lies in the source and usage of funds. Funds in NRA accounts generally originate from offshore sources and cannot be freely transferred to domestic RMB accounts unless they comply with regulations set by the State Administration of Foreign Exchange SAFE.

2. The Practical Significance of Opening Offshore RMB Accounts

In recent years, with the accelerated internationalization of the RMB - especially under the Belt and Road Initiative - trade between China and regions such as ASEAN, the Middle East, and Africa has become increasingly frequent. According to data released by the People's Bank of China, in the first half of 2025, the cross-border RMB settlement volume with Belt and Road countries increased by more than 30% year-on-year. This trend has driven up the demand for offshore RMB accounts among mainland enterprises.

Opening such accounts can help companies achieve the following goals

1. Reduce Exchange Costs Using RMB for settlements can help companies avoid exchange losses caused by intermediate conversions involving foreign currencies like the U.S. dollar.

2. Enhance Liquidity Companies can directly deposit overseas revenues in RMB into offshore accounts, avoiding the complex procedures associated with repatriating funds.

3. Mitigate Exchange Rate Risks Holding RMB assets can help companies reduce exposure to foreign exchange risks, especially when the RMB exchange rate fluctuates significantly.

4. Expand International Markets Offshore accounts can serve as overseas financial platforms, facilitating future investments and financing abroad.

3. Main Paths for Opening Offshore RMB Accounts

Although offshore RMB accounts offer many advantages to enterprises, the actual process involves a series of regulatory and procedural steps. Below are the main paths for mainland companies to open such accounts

1. Choosing the Right Jurisdiction

Many global financial centers now offer offshore RMB services, including Hong Kong, Singapore, London, and Frankfurt. Among them, Hong Kong is the most common choice due to its close ties with mainland China, relatively lenient regulation, and strong RMB liquidity.

2. Preparing Required Documentation

Companies must submit the following documents to the overseas bank

Company registration documents business license, articles of association, etc.

Identity proof and authorization documents of the legal representative

Offshore account opening application and related KYC Know Your Customer documents

RMB account information or proof of fund sources issued by domestic banks

3. Compliance with Regulatory Requirements

Even though the account is opened overseas, companies still need to comply with regulations from China’s State Administration of Foreign Exchange SAFE. For example, according to the Interim Measures for the Administration of Cross-Border RMB Settlement Pilot Programs, companies must report to the authorities through domestic banks and ensure the legality of fund sources. The transfer and use of funds in offshore accounts must also meet local financial regulatory requirements. For instance, the Hong Kong Monetary Authority has strict anti-money laundering AML and customer due diligence CDD requirements, and companies must provide relevant transaction background documentation when required.

4. Major Challenges

Despite the advantages, companies may face several challenges when operating offshore RMB accounts

1. Restrictions on Fund Repatriation

Currently, China maintains some controls over the free convertibility of the RMB under the capital account. If mainland companies want to bring funds from offshore RMB accounts back to the mainland, they must meet certain conditions - for example, the funds must be used for cross-border trade settlements or debt repayment - and must go through domestic banks for declaration. This limits the flexibility of capital flows to some extent.

2. Tightening Foreign Exchange Regulation

In recent years, as global anti-money laundering AML and anti-terrorism financing CTF regulations have become stricter, banks have tightened their scrutiny of customer identities and transaction backgrounds. Some companies report that the offshore account opening process has become more cumbersome and time-consuming.

3. Exchange Rate Volatility

While using the RMB for settlements helps avoid some exchange rate risks, the RMB itself is still subject to fluctuations. Especially in the context of complex U.S.-China relations and heightened global financial uncertainty, companies must closely monitor RMB exchange rate trends and manage their funds prudently.

4. Coordination Between Domestic and Foreign Regulations

Holding RMB funds overseas often means companies must comply with regulatory requirements from both mainland China and the jurisdiction where the account is opened. For example, Chinese tax authorities have reporting requirements for offshore accounts, while overseas banks conduct strict AML compliance checks - both of which can increase corporate management costs.

5. Future Outlook

As the internationalization of the RMB continues to progress and China further opens its financial markets, the environment for using offshore RMB accounts is expected to improve. In July 2025, the People's Bank of China renewed bilateral local currency swap agreements with several countries, further strengthening the foundation for RMB use internationally.

In the future, with the promotion of digital RMB and improvements in cross-border payment systems, the convenience of mainland companies in opening and using offshore RMB accounts will continue to improve. Enterprises should actively adapt to the new financial environment, rationally plan their capital structure, and leverage offshore accounts to achieve global business objectives.

Conclusion

Opening offshore RMB accounts is a strategic and operationally significant move for mainland Chinese companies. While it presents valuable opportunities, companies must also face challenges head-on, operate in compliance with regulations, and proceed steadily toward their global goals.