China Regulatory Brief: Annual Inspection of Foreign Law Firms, 144-hour Visa-free Entry Scheme
Shanghai to Carry Out Annual Inspection of Foreign Law Firms
On January 26, the Shanghai Municipal Bureau of Justice issued a notice on carrying out 2015 annual inspection of the representative offices of foreign and Hong Kong law firms. The notice specified that all the foreign and Hong Kong representative offices operating in Shanghai should fill out the relevant information in the online annual inspection system and submit the required documentation before March 31, 2016. Specifically, the offices should submit a detailed 2015 work report which covers their business scope, an annual balance sheet, the status of the designated representatives, a cash flow report and all the financial/income statement audited by a certified accounting firm. The contact information of the chief representatives and main administrative staff are also required. A complete list of the required documents can be found here.
China Offers 144-hour Visa-free Entry for Foreigners from 51 Countries
China is making effort to boost its international trade and tourism industry. Starting January 30, international travelers entering China from Shanghai and its neighboring Jiangsu and Zhejiang provinces (Hangzhou’s Xiaoshan International Airport and Nanjing’s Lukou International Airport) are now able to stay in these regions for up to six days (144 hours) without a Chinese visa, provided that they are in transit to a third country. Such travelers are required to provide the details of their connecting flight and may exit the country from any of these cities. Previously, travelers were allowed to stay in one of these cities for only 72 hours without a visa. This visa policy applies to passport holders from 51 countries including the U.K., the U.S., Australia and Spain.
Tianjin FTZ Lifts Restrictions on the Foreign-invested Financial Leasing Company
On January 26, the Tianjin Ministry of Commerce issued an announcement to state that the Tianjin Free Trade Zone (FTZ) will implement a record-filing system for the establishment of foreign-invested financial leasing companies. The Tianjin FTZ will issue the “Foreign-invested Enterprises Filing Certificate” to the foreign financial leasing companies after they are registered and finish the filing procedures. Previously, foreign investors engaged in financial leasing industry need to get a pre-approval from the FTZ administration committee. Meanwhile, Beijing and the Shanghai FTZ have recently imposed restrictions on the setup of financial leasing companies and other investment management companies due to the country’s rising online lending risks.
Chinese Premier Confirms to Fully Implement VAT reform in 2016
On January 22, Chinese Premier Li Keqiang stated that the country’s ongoing tax reform to replace business tax with a revamped value-added tax (VAT) will be fully implemented nationwide this year. In 2016, the VAT reform is expected to cover financial services, construction, real estate and consumer services such as food, catering, and accommodation. The Chinese government has already released a rough tax plan in May last year, which was supposed to be launched by the end of 2015 but postponed due to various practical reasons. According to the previous draft legislation, an 11 percent tax might be levied on property and construction companies, while a six percent rate shall apply to consumer services industries.
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