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China (Shanghai) Pilot Free Trade Zone

  Investment Consulting Hotline: (86-21) 5836 6078

 

About FTZ

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Negative List

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China (Shanghai) Pilot Free Trade Zone

 

 

The establishment of the China (Shanghai) Pilot Free Trade Zone (“FTZ”) was approved by PRC State Council in the middle of August 2013. The FTZ integrates Waigaoqiao Free Trade Zone, Waigaoqiao Free Trade Logistics Park, Yangshan Free Trade Port Area and Pudong Airport Comprehensive Free Trade Zone and has a total area of near 29 square kilometers.

 

On 30 August 2013, the Standing Committee of the Twelfth National People’s Congress adopted the Decision regarding Authorization to the State Council for Interim Adjustment of Administrative Examination and Approval Stipulated in Relevant Laws and Regulations in the China (Shanghai) Pilot Free Trade Zone (“Decision”). According to the Decision, the State Council is authorized to suspend in the FTZ certain administrative examination and approval requirements stipulated in the PRC  Wholly Foreign-Owned Enterprise Law (“WFOE Law”), the PRC Sino-Foreign Equity Joint Venture Enterprise Law (“EJV Law”) and the PRC Sino-Foreign Cooperative Joint Venture Enterprise Law (“CJV Law”) (jointly “FIE Laws”). Such suspension becomes effective from 1 October 2013 and will last for a trial period of three years.

 

The reform in the FTZ covers the following aspects:

 

Ø       Approval requirements shall be replaced by mere recordal, which will remove administrative burdens for foreign investors and speeds up the implementation process of projects in the FTZ.

Ø       In contrast to the Foreign Investment Guidance Catalogue (Catalogue) thereby classifying industry sectors in China into the "Encouraged", "Restricted" and "Permitted" categories monitoring how foreigners may invest, a much simpler "negative list" shall apply specifically to foreign investment in the FTZ. Accordingly, foreign investors may conduct within the FTZ any business (except certain reserved sectors) that is not set out in the "negative list" with minimal restrictions, such that they will only be required to arrange a filing with the Shanghai municipal government and that no prior government approval will be required.

Ø      Certain restricted industries shall be opened up to foreign investment within the FTZ. They cover financial services, shipping services, commercial trading services, professional services, cultural services and other social services industries. All investors, domestic or foreign, will enjoy equal market access to these sectors within the FTZ. Except for the banking and telecommunications industry, investors will no longer be subject to eligibility requirements, shareholding limit and restrictions on business scope.

 

The FTZ was officially launched on 29 September 2013, marking a trial run for groundbreaking changes to free up cross-border commodity and capital flows in the world’s second largest economy. A first batch of 25 Chinese and overseas companies were granted the licenses to register in the trial zone on the same day.

 

 

For more details on the new FTZ policy, please feel free to contact:

 

Professional Consulting Team for Investment in FTZ:

Youly Investment Consulting (Shanghai) Co., Ltd.
Tel: (86-21) 5836 6078
Fax: (86-21) 5836 6079
Email: freetradezone@youly.cn

Key Account Manager: Yoyo Pan

 


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