Onshore Account

An Onshore Account refers to a local currency or foreign currency account opened by a domestic entity at a domestic bank, regulated by the State Administration of Foreign Exchange (SAFE) of China. Unlike an Offshore Account, the flow of funds in an onshore account must comply with domestic foreign exchange management policies, such as settlement and sale of foreign exchange, and cross-border receipts and payments require supporting documents proving a genuine trade background. Use cases: exporters receiving overseas payments, importers paying foreign exchange, foreign currency transfers between domestic enterprises, etc. Precautions: ① Foreign exchange receipts and payments via onshore accounts must match customs declarations, contracts, invoices, etc., otherwise funds may not be credited; ② When settling foreign exchange, the bank's real-time exchange rate applies, and annual facilitation quotas may apply; ③ Compared with offshore accounts (e.g., NRA, OSA), funds in onshore accounts cannot be freely transferred across borders and are subject to stricter domestic anti-money laundering scrutiny. Difference: Offshore accounts are not subject to domestic foreign exchange controls and allow free fund transfers, but cannot be used for domestic payments; onshore accounts can be used for domestic settlements but cross-border flows are restricted. Foreign trade practitioners should choose the account type based on business needs (e.g., whether domestic payments are needed, whether free fund movement is desired).