Provisions of China (Shanghai) Free Trade Zone (the “Provisions”) (中国（上海）自由贸 易试验区条例), issued by the Standing Committee of Shanghai Municipal People's Congress
The Provisions comprise the most comprehensive legislation by Shanghai’s highest legislative body on the Shanghai Free Trade Zone (“FTZ”) since it was launched in September 2013, covering aspects such as the management system, investment opening-up, trade facilitation, financial services, taxation administration, comprehensive regulation, and the legal environment of FTZ.
The Provisions were enacted based on the General Plan on FTZ that the State Council issued on September 27, 2013 (see our Legal Flash of September 2013). By reiterating the following principles for developing FTZ, they aim to:
- encourage market players, promote reform and innovation within FTZ for matters not restricted by laws or regulations;
- apply national treatment to foreign investment within FTZ, except any sectors specified in the Negative List;
- simplify the formalities of company registration within FTZ;
- allow FTZ-incorporated companies to carry out reinvestment and business activities outside FTZ;
- launch a regulatory reform on customs, inspection and quarantine;
- establish a uniform window responsible for the administration of transactions, logistics, processing and warehousing related to international trade;
- launch the pilot reforms of RMB capital account convertibility, financial market interest rate liberalization, cross-border use of RMB, and foreign exchange management reform;
- innovate the administration within FTZ and encourage government management to shift its focus from ex ante examination and approval to interim and ex post review.
- improve the legal environment of FTZ by establishing sound legal frameworks covering commercial rights, labor issues, intellectual property rights, environment protection and dispute resolution.
The Provisions overrule the Regulations on Shanghai Waigaoqiao Free Trade Zone, issued on December 19, 1996. Date of issue: July 25, 2014. Date of effectiveness: August 1, 2014.