Many overseas Chinese families face this situation: A parent passes away in China, and the child living abroad inherits money or property in China.
The next question is often: Can those inherited assets be transferred overseas?
The answer depends largely on the heir’s citizenship status and immigration status.
If the heir is a Chinese citizen who only holds foreign permanent residency (such as a U.S. green card), transferring inherited assets out of China can be more complicated than many people expect.
Under China’s foreign exchange regulatory framework, the formal procedure for inheritance-related asset transfers abroad generally applies only to: foreign citizens, and residents of Hong Kong, Macao, or Taiwan who inherit assets located in mainland China.
Chinese citizens who have formally emigrated and settled abroad may instead apply for the emigrant asset transfer procedure to move their assets overseas under the rules set out in the 个人财产对外转移售付汇管理暂行办法.
However, if a person remains a Chinese citizen and has not formally emigrated, but only holds a foreign permanent residence permit, these formal procedures may not normally apply.
In that case, the available options will depend on the type of inherited assets.
For inherited cash, the process is often relatively straightforward.
In practice, the funds may be remitted abroad through China’s personal foreign exchange quota system, under which an individual may generally purchase up to: USD 50,000 per year through a simplified foreign exchange purchase procedure.
Banks may request documentation showing the lawful source of funds, such as: inheritance certificates or notarized inheritance documents, proof of family relationship, bank records showing how the funds were received.
However, where the remittance is within the annual quota and the funds are already held in the individual’s personal bank account, banks may not always require inheritance documentation unless the transaction triggers additional review.
For inherited real estate, the process is more complex.
Real property located in China cannot be transferred abroad directly. Instead, the heir must first dispose of the property in China.
This typically involves:
1. completing the inheritance procedures
2. selling the property in accordance with Chinese law
3. receiving the RMB sale proceeds into a personal bank account in China
4. paying all applicable taxes and obtaining tax payment certificates
5. Approval from foreign exchange authority
After these steps are completed, the heir may apply through a designated bank for the relevant foreign exchange procedures to convert the RMB sale proceeds into foreign currency and remit the funds overseas.
For Chinese citizens who have formally emigrated and settled abroad, the emigrant asset transfer procedure may provide an additional legal channel for transferring assets out of China.
Under this framework, an emigrant may apply to transfer his or her lawfully owned personal property located in China overseas.
In practice, the timing of inheritance in relation to emigration may affect how smoothly such applications proceed.
Where the inheritance was obtained before the individual emigrated, and the heir has already completed the inheritance procedures (such as notarized inheritance confirmation, property registration, or receipt of inherited funds), the inherited assets are generally treated as part of the individual’s existing lawful property in China.
These assets can usually be included in an emigrant asset transfer application, provided that the applicant can demonstrate: lawful ownership of the assets, a clear source of funds, and completion of applicable tax obligations.
Where the inheritance arises after the individual has already emigrated, the situation may be somewhat more complex in practice.
Although inherited assets may still qualify as the emigrant’s lawful property, banks and foreign exchange authorities may review the transaction more carefully, particularly regarding: the authenticity of the inheritance, the heir’s legal ownership of the assets, whether all relevant taxes have been paid.
For smaller amounts, banks may sometimes recommend using the individual foreign exchange quota system, while larger amounts—particularly sale proceeds from inherited real estate—may proceed through the emigrant asset transfer approval process.
For overseas Chinese families, the ability to transfer inherited assets out of China often depends on three key factors:
1. the heir’s citizenship or immigration status
2. the type of inherited assets (cash vs. real estate)
3. the timing of inheritance in relation to emigration
Where the heir holds foreign permanent residency but remains a Chinese citizen, inherited cash may often be transferred overseas gradually through personal foreign exchange quota channels, while inherited real estate typically needs to be sold first and then remitted through the appropriate foreign exchange procedures.
Because documentation requirements and regulatory practices may vary between banks and regions, it is generally advisable to seek professional advice before initiating large cross-border transfers of inherited assets.
If you are dealing with inheritance of assets located in China while living overseas, the legal and foreign exchange procedures can vary significantly depending on the specific circumstances.
Professional legal guidance can help you:
1. structure the inheritance process properly
2. prepare the necessary documentation
3. navigate bank and foreign exchange procedures
4. reduce delays in cross-border transfers
If you would like to discuss your situation, feel free to seek professional advice from lawyers experienced in cross-border inheritance and asset transfers involving China.
For more information, please contract David Gao, international family lawyer in Beijing, China.
