CHINA FOREIGN INVESTMENT
CITY INFORMATION - SHENZHEN |
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Comparison of Free Trade Zone and Non-Free Trade Zone
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Free trade zone |
Non-free trade zone |
| Corporation
registration |
Allowing overseas and domestic (including Hong Kong, Macao
and Taiwan)enterprises and other economic organizations or
overseas individuals to invest and establish trading, warehousing,
export processing and exhibition enterprises within the free
trade zones, as well as other enterprises and organizations
approved for incorporation |
There are more restrictions for foreign investors' investing
in trading. Generally, only offices, which possesses no status
of legal representative can be set up. |
| Customs
administration |
Bonded system is adopted in free trade zones. The goods transported
into the free trade zone from abroad, or vice versa, shall
be exempted from the import duties, and import and export
licence. The goods transported into domestic non-free trade
zone from the free trade zone are regarded as imported goods;
and vice versa, exported goods.
EDI systems are applied in free trade zones with computer
network linking between customs and enterprises. |
Bonded system is only carried out in bonded warehouse or bonded
factories. For goods shipped into China from abroad, the import
customs clearance shall be proceeded; and vice versa, the
export customs clearance shall be proceeded.
Only a few large-scale enterprises are approved to employ
EDI for customs declaration. |
| Foreign
exchange
administration |
Free settlement of exchanges is carried out for companies'
foreign exchange income. Foreign exchange can be either deposited
in the financial institutions in the zone, or be sold to the
appointed foreign exchange banks in the zone.
Both Chinese-funded and foreign-funded enterprises in the
zone can open their foreign accounts in accordance wih regulations.
No need to handle the verification and cancellation procedure
which is requested by the Foreign Exchange Administration
of China for exchange collection of export and payment of
import.
Chinese-funded and foreign-funded enterprises share a unified
exchange administration over their current accounts. |
Compulsory exchange settlement policy is carried out for the
foreign exchange of the current accounts. Foreign exchange
shall be sold to the appointed foreign exchange banks only.
Chinese-funded enterprises can't keep their foreign exchange
accounts without approvals of the People's bank of China.
Verification and cancellation procedure for exchange collection
of export and payment of import is required.
There are differences between Chinese-funded and foreign-funded
enterprises in foreign exchange settlement and transaction. |
| Category of tax |
Taxable ltems |
Tax rate |
Remarks |
| Enterprise income tax |
Income derived from manufacturing, business
operation and other resources |
15% |
Manufacturing enterprises with an operation
period of over 10 years are, upon their profiting year, free
of taxation for the first 2 years, and levied by half for the
following 3 years (8years for hi-tech enterprises).Those enterprises
with over 70%of their products exported will be levied by 10%from
the 6th year(11th year for hitech enterprises) on. |
| Business tax |
Income deriving from providing taxable services,
transferring intangible assets, or selling real estate |
3-10% |
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| Individual income tax |
individual taxable income |
5-45% |
Individual monthly taxable income is the remaining
sum of monthly income deducted 800 yuan |
| Value-added tax |
Commodities imported from the free trade zone
and sold in domestic market |
17% |
Product exports and transactions within the
free trade zone are free of value-added faxes |
| Consumption tax |
Taxable consumption commodities imported via
the free trade zone |
3-45% |
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| Investment Workflows |
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Documents Needed for Application for Establishing Enterprises
in the Shenzhen Free Trade Zone |
| [To incorporate a new enterprise] To apply for establishing
exclusively foreign-owned enterprise, Chinese-foreign joint venture
enterprise, Chinese and foreign equity joint venture enterprise or
domestically funded enterprise, investors shall present the following
documents (For those concerning land purchasing, project setup application
form must be filled in first. After approval, the project setup notice
shall be presented together with the following documents): |
| 1 |
Application document of investor(sealed
by the investing party) |
Original 1 |
| 2 |
Name verification notice(issued by the Industrial
l& Commercial Administration)concerning the name of the
enterprise to be established |
Copy 1 |
| 3 |
Investor's valid legal documents of commercial
registration (note: Chinese party provides business license,
foreign party provides commercial registration certification,
and registration certificate, etc.; if the foreign investor
is a natural person, s/he shall provide ID certification documents
as well as original certification of bank credibility) |
Copy 1 |
| 4 |
Contract of the enterprise to be established
(signed and sealed by the investing parties) (note: exclusively
foreign-owned enterprises and domestically-funded enterprises
are not requited to present the contract) |
Originals 6 |
| 5 |
Constitution of the enterprise to be established
(signed and sealed by the investing party) |
Originals 6 |
| 6 |
Authorization letter (signed and sealed by the
investing party) |
Original 1 |
| 7 |
Lease contract of business place, or certifying
documents of real estate (Note: The contract should be sealed
by leasing verification department) |
Copy 1 |
| 8 |
Appointment letter of the members of the board
of directors for the enterprise to be established |
Original 1 |
| 9 |
Certifying documents for the ID of the members
of the board of directors |
Copy 1 |
| 10 |
Counterfoil of the approving certificate (available
from the Economic Development Department or the Free Trade Zones
Service Centers) |
Original 1 |
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| [To establish branch of enterprise
from Shenzhen or inland] |
| 1 |
Enterprise application document(sealed
by the enterprise) |
Original 1 |
| 2 |
Decision by the board of directors(signed by
the members of the board) |
Original 1 |
| 3 |
Copy of business license |
Copy 1 |
| 4 |
Capital verification report of the corporation
|
Copy 1 |
| 5 |
Appointment letter of the branch head (sealed
by the enterprise) |
Original 1 |
| 6 |
ID certifying document of the branch head |
Copy 1 |
| 7 |
Lease contract of business place, or certifying
documents of real estate (Note: The contract should be sealed
by leasing verification department) |
Copy 1 |
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