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Shanghai FTZ Issues Further Development Plans

by Mary Swire, Tax-News.com, Hong Kong

02 September 2014


It has been announced by Shanghai's municipal government that, as part of the liberalization of services and trade within China's first pilot free-trade zone (FTZ) in the city, eight more international commodity trading exchanges will be established by 2015, while the policy of allowing for wholly foreign-owned international ship management companies is already bearing fruit.

With the Shanghai FTZ being used to try out reforms ahead of other parts of China, the municipal government has issued a working plan that contains a provision to introduce platforms for the international trading of oil, gas, iron ore, cotton, liquid chemicals, silver, commodities and non-ferrous metals by 2015. It is expected that an international gold exchange will already have commenced operations by later this year.

The plan also contains a further provision, subject to central governmental approval, for the testing of a "parallel import" program for automobiles into the FTZ, where businesses would be allowed to import foreign vehicles from their countries of origin, in addition to those brought into China by chief dealers.

In addition to the easing of restrictions and rules on trade and investment, such plans in the FTZ are able to take advantage of its tax incentives, with, for example, zero customs duties and import taxes applying to goods transferring between the FTZ and overseas destinations.

It has also been disclosed that the first wholly foreign-owned international ship management companies have been attracted to Shanghai. With a tax exemption on business income arising from international shipping, transporting, warehousing and shipping insurance for companies registered in the FTZ port areas, it was noted that three such ship management companies have already been set up in in the FTZ, and another six companies have submitted registration applications.

TAGS: tax | business | marine | tax incentives | corporation tax | China | tax breaks | import duty | trade | services

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