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China Announces Location of New Free Trade Zones, Expands Shanghai FTZ

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RECHRF-00012398-001SHANGHAI – At a bi-monthly meeting on December 28, the Standing Committee of the National People’s Congress mapped out the specific locations of the three new Free Trade Zones (FTZ) announced earlier. The meeting also announced the expansion of the Shanghai FTZ, as well as the simplification of a number of investment procedures in these zones.

It was announced that the Guangdong FTZ will include the Nansha New Area in Guangzhou, Shenzhen Qianhai and Zhuhai Hengqin New Area, covering a total of 116.2 square kilometers. The Tianjin FTZ, with a total area of 119.9 square kilometers, will be comprised of Tianjin Port, Tianjin Airport and the Binhai New Area industrial park. Lastly, the 118.04-square-meter Fujian FTZ will include industrial areas in the provincial capital of Fuzhou, the whole of Xiamen and Pingtan, a new industrial park targeting investment from Taiwan. 

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China Regulatory Brief: 2015 Tariff Implementation Plan and New Visa Requirements for Short-term Workers

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China Launches 2015 Tariff Implementation Plan

On December 12, the Customs Tariff Commission of China’s State Council released the “2015 Tariff Implementation Plan,” which adjusts import and export tariffs levied on certain goods and implements temporary duty rates for products including manufacturing equipment and accessories for optical communication laser devices and automatic wire welding machines. The temporary duty rates, which are lower than the MFN (most-favored-nation-treatment) tariff, are set to boost imports and meet domestic demand.

China also reduced tax rates for environmental protection equipment such as electronic control brakes for electronic cars; ethylene and ferronickel used in the domestic production of energy resources; lipid-lowering active pharmaceutical ingredients; macadamia nuts and other everyday consumer products. The Plan will take effect on January 1, 2015. A complete Chinese version of the updated tariffs can be found here.  

China Clarifies New Visa Requirements for Short-term Workers Coming to China

The Ministry of Human Resources and Social Security (MHRSS) and two other relevant departments jointly released the a circular (renshebufa [2014] No.78) further clarifying the visa requirements and applicable visa types for certain short-term workers (employees and contractors) coming to China. According to the Circular, short-term workers coming to work in China for 90 days or less should obtain a Z visa, M visa or F visa depending on their purpose for coming to China. Notably, the Z visa for short-term workers is not renewable upon expiry. Also, the requirements and approval process for the Z visa applications are comparatively more complex and time consuming. The Circular will take effect on January 1, 2015. 

Related Link IconRELATED: Employing Foreign Nationals in China

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Investing in China’s Art Auction Market

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By Roy K. McCallChina art auction

China’s art and antiques market is the world’s largest, with 2013 sales exceeding US$8.5 billion, up 28.8 percent from 2012.The overseas market of Chinese art and antiques in 2013 was US$2.3 billion, representing an even larger increase from the year before of 42 percent.

China’s affluence is reaching beyond China and Chinese art. In November 2014 at a Sotheby’s (NYSE: BID) auction, Wang Zhongjun, chairman of the China’s film studio Huayi Brothers, bought Van Gogh’s 1890 painting Still Life, Vase with Daises and Poppies for a record US$62 million – more than double the US$28.2 million for a Picasso that Dalian Wanda paid at a Christie’s auction one year earlier.

Transparency into the Chinese art market is growing thanks to professional art news providers such as Artron.net, Hurun, YangGallery.com and others. Artron provides information in both Chinese and English on global auctions and art, not just about Chinese art or China’s market.  In addition, by mid-2015, artnet, with the China Association of Auctioneers is expected to release the third edition of its Global Chinese Art Auction Market Report.  Continue reading…

Hong Kong Banks Shut Down U.S. Accounts Rather Than Deal with FATCA

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By Benedict Lynn

Due to its geographical proximity to the mainland, modern and (until now) friendly banking system and transparent legal regime, Hong Kong has long served as a popular gateway into China for foreign businesses. Americans in particular have favored the former British colony, which retains its widespread use of the English language and Western business ideals, as a launching pad for their operations into mainland China.

However, since the Foreign Account Tax Compliance Act (FATCA) came into effect in early July, many Hong Kong based banks have been refusing to open new accounts for, and even shutting down the existing accounts of, American individuals and corporations.

Dezan Shira & Associates have been advising several of our American clients who have found themselves in this frustrating and potentially catastrophic situation. In this article, we examine the effects of FATCA on American businesses and taxpayers operating out of Hong Kong, as well as the implications for Hong Kong’s future as a means of penetrating the Chinese market.  Continue reading…

China Announces Official 2015 National Holiday Schedule

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China’s General Office of the State Council released the “Circular on the Arrangement of Certain Holidays in 2015 (guobanfamingdian [2014] No.28)” on December 16 and announced the official national holiday schedule for 2015 as follows:

New Year

  • January 1  – 3  (3 days in total)
  • January 4 (Sunday) is an official working day.

Spring Festival

  • February 18 - 24 (7 days in total)
  • February 28 (Saturday)  and February 15 (Sunday) are official working days.

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Devonshire-Ellis: China-ASEAN Trade Routes Key for 2015 Development

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Chris Devonshire-Ellis has highlighted the various China-ASEAN trade routes as specific areas of high growth for 2015 at the Dezan Shira & Associates annual meetings currently taking place in Shanghai.

The firm, which specializes in foreign direct investment tax-law, compliance and strategic investment issues on behalf of global mid-cap manufacturers, has 12 China offices, as well as a significant presence in India, Singapore and Vietnam, and Alliance members in Indonesia, Malaysia, the Philippines and Thailand. Continue reading…

Using Serviced Offices to Support Your China Growth Strategy

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外侧间By Matthew Zito

For companies newly looking to set up a presence in China or expand their existing China operations, the prospect of costs incurred when entering an unknown market can be daunting, appearing as a sort of “make or break” venture. One lesser-known option available to foreign investors in this position is the use of serviced offices (also known as “executive suites”).

Especially prevalent in fast-paced Asian markets like China, Hong Kong and Singapore, serviced offices are rentable office spaces that come fully furnished and equipped with technology and service amenities. For example, a premium serviced office in Shanghai might provide tenants with secretarial services, state-of-the-art IT infrastructure and conference space.

The benefits of such an arrangement for a China growth strategy are manifold, especially for start-up operations. Most significant among these are the cost savings achievable through the use of serviced offices rather than a traditionally leased space. Continue reading…

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