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There are 15 free-trade zones established in China, including Dalian, Fuzhou, Guangzhou, Hainan Haikou, Ningbo, Qingdao, Shanghai Waigaoqiao, Shantou, Shenzhen, Tianjin Port, Xiamen Xiangyu, Zhangjiagang and Zhuhai.
Free-trade zones offer tax breaks similar to that of the SEZs. Additionally, enterprises establishing themselves within these areas may enjoy ‘duty-free’ status on imports and exports which enables them to import materials and equipment and export finished products.
| Relevant Legislation | Measures on Customs Supervision and Control over Bonded Zones | | Corporate income tax | 15% | | Tax Exemption and Reduction | - 2 years of exemption and 3 years of reduction by half (at 7.5%)
- Another 3 years of reduction by half for enterprises 'adopting advanced technology'
- Preferential tax rate at 10% for the year in which export value exceeds 70%
| | VAT | Free for in-zone transactions | | Local Income tax | exemption and reduction | | Import & Export | Administration by registration record system instead of by approval; no quota and license restrictions | | Processing Trade | No bank grantee bond required | | Equipment | Imported manufacturing equipment; constructive and decorative materials and office appliances exempted from duty | | Imported processing materials | Bonded | | Market access | Ahead of China’s WTO commitment schedule | | Forex | Free to open forex account and retain forex | | Qualifications for foreign trade | Automatic grant |
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