Business China

Investing in a Chinese Free Trade Zone

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Chinese free trade zone 

After signing the free-trade agreement with World Trade Organization (WTO) back in 2001, China opened its doors to the world. The Chinese government needed to inspire trust in the global marketplace to get investment pouring into their economy. 

Investors needed to be assured that their rights will be safeguarded, and they will be provided with an enabling business environment. They needed to offer the global economy a facilitating and attractive environment that made business operation easy and profitable. 

Therefore, the government established multiple trade zones across China, to attract foreign companies to different sectors.

rep office

Until now, China has opened the following trade zones:

1.Chongqing Free Trade Zone 
2.Fujian Free Trade Zone
3.Guangdong Free Trade Zone
4.Henan Free Trade Zone
5.Hubei Free Trade Zone
6.Liaoning Free Trade Zone
7.Shaanxi Free Trade Zone
8.Shanghai Free Trade Zone
9.Sichuan Free Trade Zone
10.Tianjin Free Trade Zone

Trade zone are an excellent tool to uplift emerging economies in the global market. By entering an FTZ, your business can avail multiple favours and incentives.

Tax Incentives 

Hengqing New Area, Guangdong FTZ, Qianhai Shenzhen- Hong Kong Zone, Guangdong FTZ, and, Pingtan Comprehensive Experimental Area, Fujian offer 15 percent corporate tax reduction to companies that fulfil certain business regulations. 

In addition to this, FTZs also allow duty-free machinery and equipment imports for company use only. It also provides several other tax leniencies. For example, in Shanghai FTZ, companies that have higher interest values due to non-cash transaction can pay corporate income tax over the course of 5 years.

Custom Clearance

FTZ provide flexibility in the custom clearance process. Companies can declare several batches of imports and exports in one forma and get collective clearance. This reduces processing time and cost of the company. 

Goods imported to FTZ don’t have to sit and wait on port. They are directly transferred to a warehouse. Goods shipped outside of a FTZ are given preferential custom-clearance by the government. 

International Trading Centers

A custom tax is levied on domestic goods shipment only, international shipments aren’t subjected to custom clearance or tax. This provides companies established in FTZ an additional supply chain advantage.

Looking to venture into a FTZ to avail preferential treatment and lower tax rate? Let Business China help you out. 

Our experts know all the tips and tricks to make the registration process simple and convenient. So, whether you want to set up a WFOE or a Representative Office, we can help you out with all your business setup needs. 

Our experts are fluent in English; therefore, there is no need to worry about the language barrier. We will facilitate you every step of the registration process. Just email us your business plan and let the process begin. 

Along with providing assistance in the registration and incorporation process, we also offer premium accounting and company management services to all our clients. Call +86-020-2917 9715 to make your Chinese company a huge success.

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