Receiving an international transfer in RMB saves a China-based business both time and money. Among other advantages, receiving in RMB could help reduce foreign exchange (FX) costs, eliminate transaction fees, and prevent potential cash-flow problems.
If you’re sending an international transfer through Veem, the recipient has the option to choose the currency they want to land in their bank account. If your counterparty is based in China, the best option for them to choose is their own currency, RMB. Opting for RMB will give their business great competitive advantage while saving them both money and time. How so?
RMB: a currency on the rise
According to a recent survey conducted among Chinese suppliers, 61% of China-based businesses believe that an international company willing to do business in RMB can gain a financial advantage over other companies that stick to their own currencies.
Based on data given by Chinese suppliers, 56% of international companies with business ties to China expect to use more RMB in international transactions. Furthermore, an additional 27% of companies that currently do not use RMB want to start doing business in this currency in the near future.
Here are the main reasons why choosing RMB would be beneficial for the recipient of your payment.
1. Attractive FX rates
Veem offers competitive FX rates, some of the best available in the market. This means that with each RMB transfer your counterparty could receive 1-2% more funds than if they’ve gone to their bank to change USD to RMB. Regardless of the amount they’re receiving, this saves them a lot of money and frees up their cash flow from being restricted to USD.
2. Unrestricted invoicing
Issuing an invoice in RMB outside China is now completely unrestricted. There are no taxes levied by the Chinese government, nor any laws that require cross-border payments to take place in USD. According to China’s Renminbi Trade Settlement Scheme, all China-based businesses that have export and import licenses are entitled to both send and receive RMB payments. Consequently, cross-border transactions have reached RMB 11 trillion in 2015, and this figure has continued to rise dramatically over the past couple of years.
3. No additional fees
Banks charge their customers a landing fee every time they receive an international transfer. This amount is determined by the bank and is deducted automatically from the funds; there’s no way to circumvent it. However, if your counterparty chooses to receive their transfer in RMB, Veem will cover those charges for them. In addition, we will also waive our $20 transaction fee we charge on cross-border USD transfers.
Opting for RMB when receiving international funds through Veem can thus save your receiver a considerable amount of money that they can spend on growing their business. And on top of that, it will make their life a lot easier since they can forget about constantly checking the market for favorable USD-RMB exchange rates.