Before making an Outward Remittance to China using RMB currency, Thai enterprises should check with business partners in China to ensure that they can receive the cross border payment in RMB as they will need to meet conditions set by the Chinese authorities as follows:
Chinese enterprises which are eligible to receive cross border payments for goods and services in RMB currency must fulfill the following conditions
Qualify to operate an import/export business, have obtained a license from the Administrative Bureau for Industry & Commerce, and reported to the Foreign Economic and Trade Committee
- Must be registered in the RMB Cross-border Receipt and Payment Information Management System (RCPMIS) of commercial banks in China.
Cross border receipt and payment for goods and services in RMB currency is still at an initial phase and the liquidity of RMB currency in the money market is still limited, so Thai enterprises should exercise caution when making such transactions.
To hedge against exchange rate risk from RMB currency:
Entrepreneurs in Thailand must provide documents stating the receivable or payable underlying transactions in RMB currency when undertaking a contract.
The contract amount and delivery date must comply with the underlying obligations.
After the Forward Contract for hedging RMB currency risk is established, the client has the right to amend or unwind the forward contract if there is any change to the underlying payment obligation. This excludes changes related to currency speculation.
If you receive payment for goods or services more than 360 days after the exportation date or after the transaction date, you must fill in the relevant form and provide related documents (if any) to request a relaxation of the regulations from The Bank of Thailand.