Record-Filing Measures for Foreign Investment in Shanghai Free Trade Zone
Oct. 8 – The Shanghai Municipal People’s Government released the “Administrative Measures for the Record-Filing of Foreign Investment Projects in the Shanghai Free Trade Zone (hufufa  No. 71, hereinafter referred to as ‘Measures I’)” and the “Administrative Measures for the Record-Filing of Foreign-Invested Enterprises in Shanghai Free Trade Zone (hufufa  No. 73, hereinafter referred to as ‘Measures II’)” on September 29, which put forward the record-filing measures for foreign investment in the Shanghai Free Trade Zone (Shanghai FTZ). Detailed information can be found below.
The Measures I apply to all foreign investment projects subject to the record-filing administration in the Shanghai FTZ, which includes the following foreign investment projects not covered under the negative list:
- Sino-foreign equity joint venture;
- Sino-foreign cooperative joint venture;
- Wholly foreign-owned projects;
- Foreign-invested partnerships;
- Acquisitions of a domestic enterprise by a foreign investor; and
- Capital increases by a foreign-invested enterprise.
Moreover, foreign investment projects that require national security review shall be subject to security review in accordance with the relevant provisions.
The administration committee of the Shanghai FTZ is the record-filing authority for foreign investment projects and is responsible for record-filing and supervision thereof.
Applicants for foreign investment projects shall submit the following materials to the record-filing authority:
- Company registration certificate of Chinese investors (business license) and commercial registration certificate (individual investors shall provide personal ID);
- Term sheet signed by all investors and relevant investment resolutions or decisions of the board of directors on capital increases and merger projects;
- Certificate for real estate property, bid-winning notice or leasing agreement; and
- Other materials that shall be provided according to relevant laws and regulations.
The record-filing authority shall issue the record-filing opinions to the applicant within 10 working days.
Applicants of foreign investment projects that have been granted record-filing may:
- Go through the approval procedures for planning, land use, environment assessment and construction based on the record-filing opinions;
- Applying for the preferential policies on government subsidies, re-lending businesses, discount loans based on the record-filling opinions; and
- Tax preferential policies for imported equipment based on the record-filling opinions.
Foreign investment projects under any of the following circumstances shall be reported to the record-filing authority for amendment:
- Changing of investors or equity;
- Changing of project location;
- Changing of the main content of the project;
- Total investment exceeding 20 percent of the original record-filing investment; and
- Other circumstances provided by laws and regulations.
The Measures II apply to the establishment and change of foreign-invested enterprises in the Shanghai FTZ not covered under the negative list.
Record-filing for company establishment
Foreign investors setting up foreign-invested enterprises in the Shanghai FTZ shall log on to the foreign investment platform for online-filing after obtaining the approval for the company name.
Amendments to record-filing
Foreign-invested enterprises under any of the following circumstances shall go through the record-filing formalities through the foreign investment platform:
- Changing of registered capital (increase or decrease);
- Transfer of equities or cooperation interests;
- Pledged shares;
- Merger and division;
- Changing of operating period;
- Early termination;
- Changing of investment forms and investment period; and
- Early recouping of investment by foreign investors in Sino-foreign cooperative enterprises.
Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia.
You can stay up to date with the latest business and investment trends across Asia by subscribing to Asia Briefing’s complimentary update service featuring news, commentary, guides, and multimedia resources.
An Introduction to Development Zones Across Asia
In this issue of Asia Briefing Magazine, we break down the various types of development zones available in China, India and Vietnam specifically, as well as their key characteristics and leading advantages.
Selling to China
In this issue of China Briefing Magazine, we demystify some complexities of conducting business in China by introducing the main certification requirements for importing goods into the country; the basics of setting up a representative office; as well as the structure and culture of State-owned enterprise in China. Finally, we also summarize some of the export incentives available in several key Western countries.
Trading With China
This issue of China Briefing Magazine focuses on the minutiae of trading with China – regardless of whether your business has a presence in the country or not. Of special interest to the global small and medium-sized enterprises, this issue explains in detail the myriad regulations concerning trading with the most populous nation on Earth – plus the inevitable tax, customs and administrative matters that go with this.
- Previous Article The Importance of APEC to China
- Next Article China’s Outbound Investment – It’s Going into Asian Infrastructure Development