Record-Filing Measures for Foreign Investment in Shanghai Free Trade Zone

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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 [2013] 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 [2013] 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.

Measures I
Applicable scope
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.

Record-filing procedures
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.

Measure II
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.

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