Exploring Methods of Transferring Money Out of China

China's stringent capital outflow measures have prompted punters seeking to move significant sums of money abroad to explore various avenues for fund transfer. Ben Lee, a seasoned figure in the gaming industry, sheds light on the diverse methods employed by players to achieve this.

Rolling Chips and Casino Links: One direct method closely tied to casinos involves the purchase of rolling chips. Some Macau operators have established overseas offices that exchange rolling chips for cash abroad, allowing players to realize returns exceeding 98% on their Macau-based funds.

Cash Deposits Across Jurisdictions: Casinos with multiple locations are willing to accept cash deposits in one jurisdiction and provide markers in another. This approach enables punters to deposit funds in Macau and have markers available for them in destinations such as Las Vegas or Singapore, creating a seemingly seamless international transfer. While this practice defies banking regulations, it can be legitimized by categorizing the transfer as "book entries."

Real Estate Ventures: Real estate has been a favored avenue for wealth transfer, particularly in Hong Kong. Here, properties owned by corporations and individuals effectively acquire shares in the respective company. This maneuver helps avoid substantial stamp duties and can be repeated multiple times to bolster property values through the sale of company shares among those seeking to move their funds.

Pooling Annual Outward Transfers: Another less sophisticated method involves pooling the $50,000 annual outward transfer allowance of family members and friends. These combined funds can then be used to acquire overseas properties, such as in Australia.

Shanghai United Assets and Equity Exchange: Initially created for Chinese State-Owned Enterprises (SOEs) to divest domestic assets, this exchange has expanded to list overseas assets, including properties. This enables Chinese investors to transfer funds abroad legitimately. For instance, an individual lists a property in Japan on the exchange, attracting bids and ultimately transferring money from China to Japan through this asset exchange.

Art Auctions and Film Funding: The purchase of assets through renowned auction houses like Christie's and Sotheby's has become another avenue for transferring wealth. Similar to real estate, assets acquired in this manner can be resold at inflated values to other individuals, facilitating inconspicuous money transfers. Additionally, the funding of international films, often by junket operators, offers a way to transfer substantial sums of money without raising suspicions.

Life Insurance Strategies: Middle-class Chinese individuals have embraced life insurance as a long-term strategy. These policies can be cashed out once a specific threshold is met. Consequently, funds become available in foreign countries due to the international presence of insurance providers.

UnionPay Transactions: Despite strict regulations, UnionPay continues to play a role in facilitating fund transfers. The average daily UnionPay liquidity in Macau depletes rapidly, necessitating the use of illegal UnionPay transactions. Mobile POS terminals combined with cell phones enable transactions to appear as local mainland transactions, allowing for the transfer of millions of dollars.

Cash in Suitcases via Private Jets: An age-old method involves transporting cash in suitcases. Private jets provide an ideal means for this purpose, offering limited oversight, the potential to influence local officials, and quick retrieval upon arrival. This approach is utilized not only by corporations but also by government officials.

Gold and Diamonds: These precious commodities serve as compact, transportable forms of wealth transfer. Diamonds, in particular, evade detection by metal detectors, making them a highly convenient means of moving funds. Notably, international jewelry brands like Chow Tai Fook are connected to the gaming industry and participate in such transfers.

Certificates for Gold Holdings: Punters can purchase certificates entitling them to a percentage of a company's gold holdings. These certificates offer the flexibility of withdrawal at any of the company's global outlets, providing access to funds in multiple countries.

Underground Banking: Operating similarly to junkets, underground banking entails cash deposits with an agent in one country, with cash provision in another location, often for a fee. This method facilitates fund transfers across borders while bypassing traditional banking channels.

Affiliate Marketers and Online Gambling: Affiliate marketers leverage social media accounts and linked payment options to facilitate payments from merchants, frequently related to online gambling activities. This method offers a complex web of transactions, with thousands of social media accounts playing a role in processing payments.

Public Listings: Publicly listing a company represents yet another avenue for funds to be provided. Investors may reinvest these funds and expect returns on their investment, making this a versatile method for wealth transfer.

China's commitment to clamping down on capital outflows may lead to increased scrutiny of these avenues as authorities aim to monitor and regulate fund transfers more closely. The ongoing cat-and-mouse game between regulatory authorities and inventive wealth transfer methods is likely to continue, highlighting the challenges associated with capital control enforcement.

By fLEXI tEAM