China (Shanghai) Pilot Free Trade Zone (FTZ)
Introduction of the China (Shanghai) Pilot Free Trade Zone (FTZ)
The China (Shanghai) Pilot Free Trade Zone (FTZ) was established officially on Sep 29th, 2013, which has carried out institutional reform and innovation in areas of investment, foreign trade, finance and post-filing supervision to form a legal framework for investment and trade within the zone. Its special negative list for investment management, mainly simplified foreign trade supervision procedures, promoted financial system reform to realize RMB capital account convertibility, and advocated post-filing supervision as a way to transform government functions.
Since Dec 28,2014,Shanghai FTZ has been approved the expansion by incorporating Lujiazui Financial Area, Jinqiao Export Processing Zone, and Zhangjiang High Tech Park, enlarging the FTZ from 28.78 square kilometers to 120.72 square kilometers to provide more space for reform trials.
Now the Shanghai FTZ includes 4 big sections, it is
1. FTZ Bonded Area (28.78 sq.km.)
The bonded area of Shanghai FTZ consists of Waigaoqiao Free Trade Zone, Waigaoqiao Free Trade Logistics Park, Yangshan Free Trade Port Area and Pudong Airport Free Trade Zone.
2. Lujiazui Financial Area (34.26 sq.km.)
Lujiazui Financial Area consists of Lujiazui Finance and Trade Zone and Qiantan Area. It is the core of Shanghai International Financial Center, Shanghai International Shipping Center and Shanghai International Trade Center.
3. Jinqiao Export Processing Zone (20.48 sq.km.)
Established in 1990, Jinqiao Export Processing Zone has become a showcase of advanced manufacturing, production services, emerging industries, and eco-friendly environment.
4. Zhangjiang High Tech Park (37.2 sq.km.)
Zhangjiang High Tech Park is a base for innovations as Shanghai implements the national strategy for sustainable growth. It combines the development of Shanghai FTZ and the Zhangjiang National Innovation Demonstration Area with a focus on enhancing its innovative capabilities and providing a service platform for research, financing, talent recruitment and resources sharing.
The China (Shanghai) Pilot Free Trade Zone (FTZ)
The Chinese government made the Shanghai free trade zone, which has been opened two years for now, good policy was released step by step. So if you want to setup your company at FTZ, the most important thing is to find a professional agent for help on project review at beginning.
StartChinaBusiness (Laws Investment Limited) could provide professional, high efficiency service for you, because we have our legal team who focus on China investment laws consulting, WOFE formation and mergers in Shanghai, China.
The great strategic significance of Shanghai Pilot Free Trade Zone (FTZ)
Shanghai Pilot FTZ as gateway to global markets, which makes remarkable progress during the past two years. It will continue to take the national lead in reform and innovation, guard against risks in experiments, cater to the needs of enterprises, make good use of advantages of Pudong New Area, make breakthroughs in reform and opening-up, formulate rules for investment and trade that comply with international practices. Chinese authorities were supposed to significantly ease controls concerning the yuan and interest rates in the free trade zone, creating a liberated market environment comparable to Hong Kong.
The characters of Shanghai Pilot Free Trade Zone (FTZ)
1. Shanghai Pilot Free Trade Zone (FTZ) is a financial reform pilot in China.
As announced by the State Administration of Foreign Exchange (SAFE) Shanghai branch on 28 February 2014, the Free Trade Zone will permit Yuan convertibility and unrestricted foreign currency exchange. The enterprise entity will have chance to finish RMB free-exchange at Free Trade Zone, the related policy is possible to be released step by step, so it’s advantages of FTZ will be more attractive to global investors.
2. Shanghai Pilot Free Trade Zone takes negative list to encourage foreign investors, negative list is a blacklist, which was firstly released on Sep 30, 2013. It includes 18 economic category involve 89 main classes, 419 head classes and 1069 sub-classes , special administration management solution total 190 items. Now it has been updated again and China will pilot a “negative list” approach, which identifies sectors and businesses that are off-limits or restricted for investment, in some regions from December 1, 2015, to December 31, 2017. Negative list management mode is the most important content at Shanghai Free Trade Zone which will be updated gradually .And outside of the negative list, the foreign investors could invest their interested business items freely with read system.
3. Promote trade development mode change. Cultivate trade new formats and function positively, promote trade transformation and upgrading. Further developing the international trade settlement center pilot, encourage enterprises to develop international and domestic trade as international Economic Integration, improving the international shipping service to higher level.
More sectors/areas open up for foreign investment:
Financial services area:
1)Bank service :
Allowed some foreign financial institutions who meet certain conditions to setup foreign bank at Free Trade Zone and China-foreign Joint Venture bank is allowed to be invested by local non-government capital with foreign financial institutions. If the situation warrants, Free Trade Zone will pilot on restricted licenses bank.
After enhance the effective regulation, will try to allow some local Chinese banks to open off-shore business at Free Trade Zone.
2) Professional Health medical insurance: foreign health insurance institutions will have chance to launch at Free Trade Zone.
3) Finance lease: Financing lease companies could setup stand-alone or single vessel subsidiary company without minimum registered capital restrictions.
Shipping service area:
Relax the share percentage restrict to the international shipping enterprise including Sino-foreign joint ventures, Sino-foreign cooperate company, the tentative management measures shall be formulated by the transportation department under the state council.
5) International ship management
Allow foreign investors to setup International ship Management Company.
Commerce and trade area:
6) Telecommunication value-added services;
7) Sales and service for Game machine, entertainment Machine
Professional Service area:
8) Legal service
9) Credit investigation
10) Travel agency
11) Human resources consulting service
12) Investment management
13) Engineering Design
14) Construction service
Culture service Area:
15) Performance broker
16) Entertainment venues
Society Service Area:
17) Education training, technical ability training
18) Medical service
Note: Above opened area is suitable for China (Shanghai) Pilot Free Trade Zone (FTZ).