Are domestic individuals in the foreign exchange control regulations foreigners?
According to relevant laws and regulations, domestic individuals in foreign exchange control regulations refer to China citizens and foreigners who have lived in People's Republic of China (PRC) for 1 year.
Regulations of People's Republic of China (PRC) Municipality on Foreign Exchange Control
Article 52 The meanings of the following terms in these Regulations:
(1) Domestic institutions refer to People's Republic of China (PRC) and state organs, enterprises, institutions, social organizations, armed forces, etc. In China, foreign diplomatic and consular offices in China and representative offices of international organizations in China are excluded.
(2) Domestic individuals refer to China citizens and foreigners who have lived in People's Republic of China (PRC) continuously for 1 year, except foreign diplomats and representatives of international organizations in China.
(3) Current account refers to the transactions involving goods, services, income and current transfer in the balance of payments.
(4) Capital account refers to the transaction items in the balance of payments that cause changes in the level of external assets and liabilities, including capital transfer, direct investment, securities investment, derivative products and loans.
Is foreign exchange trading legal?
China has a clear law that Chinese mainland is not allowed to set up companies to organize citizens to speculate in foreign exchange. Although the domestic foreign exchange margin business has not been fully opened, the state does not interfere with citizens' overseas investment at present. At present, the mainstream foreign exchange investment service platforms are basically from abroad. As long as it is a formal platform supervised by relevant regulatory authorities, it is legal, such as being supervised by Australia, the United States and the United Kingdom. Because the government doesn't interfere with citizens' personal investment, and the transaction doesn't happen in China.
At present, there are two main channels for China investors to invest in the foreign exchange market. One is to make a firm offer for foreign exchange opened by domestic banks, and the other is to directly open an account abroad for foreign exchange margin business through the domestic agent of overseas dealers.
Due to many factors, such as the large spread of foreign exchange firm offer (which can be understood as high transaction cost) and no leverage, the general rate of return is difficult to meet except for the large fluctuation of exchange rate.
Foreign exchange margin business is sought after by many investors, because it can be traded in two directions, both long and short, and because of its leverage ratio, it can be made small or wide.
At present, businesses opened in mature foreign exchange trading markets are basically in the form of foreign exchange deposits, rather than foreign exchange firm offers. The main reason why China's financial institutions have not carried out margin trading and securities lending business is that they are not prepared. At present, the foreign exchange margin business has not been fully opened in China. However, at present, the state does not interfere with citizens' overseas investment, so at present, foreign mainstream platforms generally find agents in China to do customer development and service for them. Being a mainstream platform abroad has great advantages.