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Free Zones in China

Updated on Monday 04th February 2019

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Free-Zones-in-China.jpgSEZ or the special economic zones are located in mainland China and address to all foreign and domestic entrepreneurs who would like to set up the operations and benefit from a series of advantages, mostly related to the taxation of profits in this country. It is good to know that trading activities which are about to be established in SEZ do not need to receive special authorizations from the government in Beijing. For more details about how you can open a company in China, including in the special free zones in this country, we kindly invite you to talk to our team of company formation specialists in China.
 

The list of free zones in China

 
The Chinese authorities have always concentrated on varied incentives and policies to attract investors as much as possible. The special economic zones in China are placed in Shenzhen, Zhuhai, Xiamen, Guangdong, Dalian, Tianjin, Qinhuangdao, Nantong, Shanghai, Lianyungang, Ningbo, Fuzhou, Wenzhou, Beihai, Zhanjiang, Kashgar, Yantai, and Guangzhou. The coastal area is also extremely industrialized and addresses to trading companies from abroad interested in placing their operations and products in mainland China and take advantage of tax incentives. These special free zones in China have a particular status and are listed separately from a financial point of view. Investors from abroad can set up WFOEs in China (Wholly Foreign-Owned Enterprises) in China’s special free zones and benefit from complete control and ownership in the company.
 

The characteristics of SEZ in China

 
The special free zones in China are directed to those kinds of investors who want to protect their assets and take advantage of special tax incentives and complete control of their assets and company. International companies interested in placing their operations in the import and export field should direct the attention to the special economic zones in China and set up joint stock companies, joint ventures, and wholly foreign-owned enterprises. Having complete independence and being sustained by the Chinese authorities, the special free trade zones in China sustain the economy in the country in a large amount, the FDI and the exports being on a positive trend in the past decade. We remind that the Chinese WFOE formation can be explained by our team of consultants in China.
 

Short facts about the free zones in China

 
 
The industrialization in China started a few decades ago when the government started a series of initiatives to support the economy and develop specific regions in the country. The first special economic zones developed in 1984 with the appearance of 14 coastal cities which were established as free trade zones: Beihai, Guangzhou, Wenzhou, Zhanjiang, Ningbo, Fuzhou, Nantong, Shanghai, Qingdao, Dalian, Lianyungang, Yantai, Tianjin, and Qinhuangdao. Considering the success of these free trade zones, the Chinese authorities decided on establishing other special areas part of the coastal belt: Pearl River Delta, Yangtze River Delta, the Shandong Peninsula, Hebei Province, Xiamen-Zhangzhou-Quanzhou, the Liaodong Peninsula and Guangxi. Here are a few facts about the free trade zones in China:
 
  • all special economic zones were created with the idea of sustaining the country’s economy with the help of foreign investments in large, medium and small-sized cities in China. 
  • the high-tech industrialization started in 1992 with varied and privileged rules among which, the possibility of trading in foreign exchange in the import and export sector. 
  • lower tax rates, different administrative schemes and the ease of doing business where only a few of the business strategies which developed in China back in the ‘90s. 
  • for instance, Shenzhen, one of the special economic zones in China, registered up to 40% of the city’s total industrial value, approximately CNY 82 billion in 1999. 
 
Special policies were developed and implemented, mostly directed to the income tax and the customs duties. Also, since the 2000's, foreign investors were allowed to set up financial institutions in China. More than that, Shanghai, a special economic zone in China, had the permission of the Chinese authorities to set up a stock exchange and approve foreign investment funds. In addition, businessmen took advantage of the double taxation treaties signed by China with numerous countries around the world to avoid paying twice the taxes on incomes.
 
We kindly invite you to contact our team of company formation representatives in China and solicit comprehensive information about how you can open a company in the special economic zones in China. Whether you are interested in setting up a WFOE or a partnership, it is best to ask for complete assistance and details in these matters.
 
 

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