We are frequently asked about investment options for foreigners in China. The good news: since 2018, qualified expats have more investment options for their RMB than they have in the past, including buying and selling individual stocks of companies listed in China. This can be done by setting up your own securities account. The bad news: as with many things for foreign passport holders, getting started on your own is not easy. Additionally, there are limitations on what you can invest in as a new investor in China.
Read on to learn how to set up your own securities account in China.
Quick tip: If you’re looking to get started in investing with minimal requirements, check out our blog post on Investing in Gold via WeChat.
This article focuses on setting up your own brokerage account to buy and sell mutual funds by answering two questions: First, what are the required qualifications and what documentation will you need? And second, what is the process for setting up and using a securities account?
Qualifications
In order to qualify to buy and sell funds or stocks in China, you must meet one of the following requirements:
- Hold a permanent residence card for China
- Work for or operate a listed A-share company
- Work legally in China with a work permit, employment contract, and tax history.
Most working foreigners will fall into the third category. This means that for most expats who work in China, trading China-listed stocks, bonds, and mutual funds is possible. In most cases, if you have been working for a registered company for more than 1 year and have proof of paying taxes, you should qualify.
Setting up a securities account
There are a number of reputable securities companies in China. Depending on your location, they will have more or less working with foreigners. We suggest working with your bank to identify a securities company. Find someone who you can communicate with at your bank, and they should be able to help you get started. CITIC Securities and China Merchants Securities are two larger companies work with individual foreign investors.
Note: The signup documentation and the trading platforms will be exclusively in Chinese. To start investing on an English language platform today, check out ExpatInvest.
Assuming you fall into the third category from above, you will need the following documents to get started with your application:
- The application form from the securities company. This process may also include a scripted video recording, and the completion of a risk-tolerance survey.
- Originals and copies of your passport, visa, and work permit.
- A letter confirming your employment in China, chopped by your company.
- The business license of your employer. Depending on the requirements, the original may be required, or a stamped copy. Talk to your HR about this and the letter confirming employment.
- Tax payment certificate. Depending on the securities company, they may require a full year of tax payment history. This can be obtained online or from the local tax bureau.
- Banking information, including your bank account number. Securities accounts must be tied to a bank account.
After everything is submitted, there will be a validation period, and then your account will be set up! The securities company will help you install and login the software needed to start trading. Once the software is installed and you’ve logged in, you will be able to buy and sell:
- Individual stocks of companies listed in China
- Mutual funds
- ETFs
Your account will be limited to certain types of products for the first two years if you have no documented investment experience in China. Despite the limitations, you will be on your way to building up an investment portfolio in China!
For more information:
- https://www.sjgrand.cn/foreigners-invest-chinese-stock-market/
- https://baijiahao.baidu.com/s?id=1608889472193955804&wfr=spider&for=pc
