Late last year, China set out stringent requirements in “Circular 62” on cancelling many local preferential policies in China. We examined this development in our e-bulletin dated 29 April 2015.

Perhaps as a response to significant concern among foreign investors, China’s State Council has now relaxed its previous requirements, with certain local preferential policies being allowed to continue. The relaxation was issued in the Circular on Several Matters related to Tax Incentives and Other Preferential Policies (“Circular 25”) on 10 May 2015.

The main relaxations under Circular 25 are as follows:

Click here to view table.