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Shanghai FTZ Corporate Formation

Shanghai Pilot Free Trade Zone (Pilot FTZ) is a category of Shanghai Free Trade Area. It a regional free trade zone established by the Government of China in Shanghai. The Pilot FTZ was formally established on 22 August 2013 with the approval of the State Council and officially opened on 29 September 2013. With a total area of 28.78 km2, equal to 1/226 of that of Shanghai, the Pilot FTZ covers four Customs Special Supervision Areas of Shanghai Waigaoqiao Free Trade Zone, Shanghai Waigaoqiao Bonded Logistics Park, Yangshan Bonded Port Area, and Shanghai Pudong International Airport Comprehensive Free Trade Zone.

Company Setup in Six Fields
The Overall Program of the Pilot FTZ has been disclosed, together with the Measures for widely opening service industries to cover six fields. The banking industry, telecom value-added service, performance brokerage, education institutions and other industries which were not open to the public in the past will be open to enterprises registered in the Pilot FTZ, which will be expected to present new business opportunities to the foreign-funded and private enterprises.

1.Financial Service Industry
The specific measures for opening financial services to the public are as follows: qualified foreign-funded financial institutions are allowed to establish foreign-funded banks; qualified private capital and foreign-funded financial institutions are allowed to establish Sino-foreign joint venture banks; limited license banks are allowed to be established at the pilot stage; qualified Chinese-funded banks are allowed to be engaged in offshore banking services in the Pilot FTZ.

2.Shipping Service Industry
In the shipping service industry, the restriction on the proportion of foreign capital in Sino-foreign joint or Sino-foreign cooperative international shipping enterprises is relaxed, and the competent transportation authority under the State Council will be responsible for developing relevant trial measures for management; non-five stars flag vessels owned by either Chinese-funded companies or Chinese-controlled companies have the priority to try to carry import and export containers between domestic coastal ports and Shanghai Port; wholly foreign-owned enterprises in international ship management are allowed to be established.

3.Commerce and Trade Service Industry
In terms of commerce and trade services, foreign-funded enterprises are allowed to be engaged in some specific types of value-added telecom services on the premise of guaranteeing the safety of network information (if beyond the scope of relevant administrative laws and regulations, the State Council's approval is a must); foreign-funded enterprises are allowed to be engaged in the production and sales of game and entertainment devices, and those devices passing the content examination of the competent culture authority may be available for sales in the domestic market.

4.Professional Service Industry
The lawyer service, credit investigation, travel agency, employment agency, investment management service, engineering design, construction service and other professional services will be further open to the public. In the Pilot FTZ, the model of cooperation between Chinese and foreign law firms will be explored; it is permissible to establish foreign-funded credit investigation companies, register Sino-foreign joint venture travel agencies and Sino-foreign employment agencies, and incorporate foreign-funded investment companies under the stockholding system; the proportions of Chinese and foreign investments in a Sino-foreign joint construction project are not limited when a wholly foreign-owned construction enterprise in the Pilot FTZ undertakes the project in Shanghai.

5.Cultural Service Industry
For cultural services, the Pilot FTX will cancel the limitation on the share proportion of a foreign-funded performance brokerage agency, and allow to establish wholly foreign-funded performance brokerage agencies which can provide services in Shanghai, and to establish wholly foreign-funded entertainment agencies which can provide services in the Pilot FTZ.

6.Social Service Industry
Regarding social services, the Pilot FTX will allow to establish Sino-foreign cooperative institutions in education and training, Sino-foreign cooperative institutions in vocational skills training, and wholly foreign-funded medical Institutions.

Overview of the Pilot FTZ Scale
1.Waigaoqiao Free Trade Zone
Profile: Officially launched in September 1990, it is the first free trade zone in China which has the largest economic aggregate among the national 15 free trade zones.
Scale: Total 10(km2)

2.Waigaoqiao Bonded Logistics Park
Profile: It is the first bonded logistics park in China with special approval of the State Council, and also one of the three logistics bases subject to key planning during Shanghai's "11th Five-Year Plan" period. It passed the inspection and acceptance by Joint Inspection Team under the General Administration of Customs on 15 April 2004. It is connected with Waigaoqiao Port Area as whole, and is only 3 km away from Waigaoqiao Free Trade Zone.
Scale: Total 1.03(km2)

3.Pudong International Airport Comprehensive Free Trade Zone
Profile: It was officially put into operation on 28 September 2010. It is located in the intersection between China's eastern coastal economic belt and Yangtze River, adjacent to Pudong International Airport with the third largest goods throughout in the world, and lies in the Asian, European and American triangular routes.
Scale: Total 3.59(km2)

4.Yangshan Bonded Port Area
Profile: It was established through the cross-regional cooperation between Shanghai and Zhejiang and put into formal use on 10 December 2005 when Yangshan Deep-Water Port was open. It is a special functional area subject to Customs close regulation and is the first bonded port area in China.
Scale: Total 28.78(km2)

Preferential Policies in Shanghai Pilot FTZ
1.Plan to open RMB capital projects
2.Build an offshore finance center
3.Create an innovative supervision model in the trade field
4.Promote innovation and development of foreign trade logistics
5. Eight Supports for Shanghai FTZ Banking
6. Favorable "micro-environment" for investment

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