By Dezan Shira & AssociatesEditor: Rainy Yao
On April 20, the policy frameworks for the Tianjin, Guangdong and Fujian Free Trade Zones (FTZs) were officially published by the State Council, along with an updated Negative List, which details prohibited or restricted industries for foreign investment in all of the four existing FTZs in China, including the expanded Shanghai FTZ. The three FTZs were approved in December last year by Chinese Premier Li Keqiang.
Following this, China announced the expansion of the Shanghai FTZ earlier this year to include Lujiazui, the city’s financial district. In Part 1 of this series, we provide details of the Guangdong FTZ and explore the new investment opportunities brought by the new Free Trade Zone.
The Guangdong FTZ covers an area of 116.2 square kilometers and consists of the three following, pre-existing development zones:
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Service Provision between Hong Kong, Macau and Guangdong
The Guangdong local government will take charge of the approval procedures for foreign-invested enterprises (FIEs) engaging in international shipping management business.
RELATED: China Announces Three New Free Trade Zones in Tianjin, Guangdong and Fujian
Further Opening-up of the Financial Services Sector
The Plan states that the tax incentives implemented in the Shenzhen Qianhai Development Zone and Zhuhai Hengqin New Area shall not apply to the other parts of the Guangdong FTZ.
“It’s good to see that the FTZs are being expanded beyond Shanghai now, although there will remain some uncertainty about the administration of entities in these zones for some time,” says Fabian Knopf, Senior Associate at Dezan Shira & Associates’ Pearl River Delta office. “Including existing zones such as Qianhai and Hengqin into the FTZ should simplify the administration of economic zones in China and help to provide more opportunities and easier access to the Chinese market for foreign investors. Investors and companies will need to become familiar with them to truly understand the impact on their respective businesses.”
In Part 2 of this series, we will give a brief introduction of the updated negative list. The next article will discuss the investment opportunities in the Shanghai, Tianjin and Fujian FTZs.
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