China purpose of payment guide

China uses a system called the Cross-Border Interbank Payment System (CIPS), which requires a purpose of payment code for international wire transfers. The purpose of payment code is a three-character code that indicates the reason for the transaction, such as trade in goods or services, investment, or personal remittance.

It’s important to ensure that the purpose of payment code is accurate and appropriate for the transaction. Incorrect or inappropriate codes can result in delays or even rejection of the transfer.

Code

Category

Description

CAP

Capital Account

  • Capital injection

  • Capital reduction

  • Capital payment

  • Investment

  • Shareholder loan

  • Non-trade fund transfer

  • Other capital payments as approved by relevant regulatory authorities

GDS

Goods Trade

  • Sell or purchase for goods

  • Import or export of goods

  • Procurement of goods

  • Letter of Credit or Documentary Collection related to goods trade

  • Prepayment of goods

SRV

Service Trade

  • Public utility

  • Rent

  • Audit fee

  • Hotel and accommodation fee

  • Legal fee

  • Advertising and promotion fee

  • Copyright and license fee

  • Service contract fee

  • Design fee

  • Research and development fee

  • Registration fee

  • Medical expenses

CAC

Current Account

  • Dividend payment

  • Profit distribution

  • Tax payment

  • Scholarships

FIF

Bank to Bank Funds Transfer

  • Interbank transfer

  • Foreign currency transfer

  • Other fund transfers as approved by relevant regulatory authorities

Was this article helpful?

|

Still can't find what you're looking for?

Chat with us->