What do Free Trade Accounts in China entail?

A Free Trade Account (FTA) is a new type of bank account which was introduced to facilitate the cross-border flow of funds into the Shanghai Free Trade Zone (FTZ). It is for both residents and non-residents (including individuals and entities) in the FTZ.

Residents in the Shanghai FTZ will be allowed to set up resident FTAs in both domestic and foreign currencies. RMB will be fully convertible under these accounts “when conditions allow”. Non-residents in the Shanghai FTZ will be allowed to open non-resident FTAs and to enjoy financial services according to the pre-establishment national treatment principles. This means foreign investors in the FTZ will receive the same treatment as their Chinese counterparts during the pre-establishment phase of their business.

Funds may flow freely between the resident FTAs and any offshore accounts, onshore non-resident accounts outside the Shanghai FTZ, non-resident FTAs, and other resident FTAs. However, the flow of funds between resident FTAs and other onshore accounts outside the Shanghai FTZ will still be subject to current cross-border fund transfer restrictions.