SHANGHAI – 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.
Related: China Announces Three New Free Trade Zones in Tianjin, Guangdong and Fujian
With the second announcement, China has dramatically expanded the Shanghai Free Trade Zone (FTZ) to include the Lujiazui financial district, Jinqiao development zone and Zhangjiang hi-tech park. As previous, the added areas are all in the Pudong district of Shanghai. Enterprises established in these areas will be able to take advantage of all the preferential polices implemented in the Shanghai FTZ.
Lujiazui is the city’s financial district and home to the regional headquarters of numerous multinational and Chinese companies, especially Chinese banks. With the inclusion of Lujiazui financial district, the FTZ plans to further open up the service industries and spur financial liberalization. Currently, the Shanghai FTZ consists of four bonded zones, namely the Waigaoqiao Free Trade Zone, Waigaoqiao Free Trade Logistics Park, Yangshan Free Trade Port Area and the Pudong Airport Comprehensive Free Trade Zone.
Related: Establishing a Company in the Shanghai FTZ
The expansion will increases the area of the Shanghai zone to 120.27 square kilometers, making it larger than any of the new FTZs. This reform will allow Shanghai to give full play to the advantages of the Pudong New Area and to test foreign investment reform on a larger scale, officials commented.
Additionally, the State Council plans to remove 12 administrative approvals for foreign companies, Sino-foreign joint ventures (JV) and Taiwanese investors in the country’s FTZs. Foreign companies seeking to set up a company in one of the zones will only need to report to the relevant authorities for record-filing, rather than obtain pre-approval from the AIC, as previous.
Administrative approval will also be repealed for foreign companies wishing to close up or merge, or change their operating period. Joint ventures in the zones will be exempt from administrative approval for establishment, extension of their cooperating period and major changes of contracts or Articles of Association. These preferential policies shall take effect on March 1, 2015 with a three-year trial period.
For more information on the preferential policies available in the Shanghai FTZ and how your business can take advantage of these, please contact firstname.lastname@example.org.
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