Economic & Technological Development Zones

High Tech Industrial Developmet Zones

Export Processing Zones

Free Trade Zones

Industrial Orientation

Uniting foreign and domestic industries, new industries, and scientific research organizations, developing new industry and tertiary industry, focus on attracting high tech, high investment projects

Encouraging investment in export processing industries and companies servicing export processing industries, including wharehousing and procurement companies.

Encouraging investment in trade, logistics, warehousing, export processing, shipping, finance, and sales institutions.

Related Regulations

Tax rate for foreign funded manufacturing companies

15%(exempt from 3% local tax )

Tax discounts for foreign funded industries

Companies that have been in operation for more than 10 years are eligible for the “Two exempt, three half off” policy: the first two profit gaining years are exempt from tax, and years 3~5 are taxed at a rate of 7.5%.

Tax discounts for advanced technology industries

After the “two exempt, three half off” program outlined above, these companies also receive 3 additional years of 10% tax rate.

Tax discounts for exporting companies

After the “two exempt, three half off” program outlined above, these companies also receive a 10% tax rate.

Policies encouraging reinvestment of after tax profit

Reinvesting in one’s own or another company for a period of 5 or more years entitles a company to a refund of 40% of the taxes paid on the reinvested funds. If the company reinvesting is an exporter or high tech company, it is entitled to a full refund.

Differential Policies

Duty and value added tax on imported equipment and components for self use

“encouraged” manufacturing industries are exempt.

Unconditional exemptions

Duties and value added taxes on imported office equipment and management equipment

No exemptions

Unconditional exemptions

Duties and vaule added taxes on imported raw materials and components

Processing trade companies can choose duty free import; otherwise no exemptions.

Unconditional exemptions

Licenses for equipment, raw materials and office equipment imported for processing  trade projects

Projects “encouraged” by the national government are exempt from licensing. Other projects need licenses.

All processing trade projects are exempt from licensing.

Domestic sale of products made from duty free materials

Taxed according to product’s value

Taxed according to product’s value

If made partially from domestic materials, then only the imported materials are taxed.

Refund of value added tax for exported products made from domestic materials

Tax can only be refunded after products have left the country.

Tax can be refunded when the domestic materials enter the Shanghai EPZs

Tax can only be refunded after products have left the country.

Customs clearance models

Different customs reporting or transfer models are used for goods imported or exported to different places, relatively complex

“One time reporting” “One form, one examination” model; 24 hour customs clearance service. 

For air transport, the “Direct clearance” method is applied.

Tax refunds on exports

Tax can be refunded when goods are actually exported

Tax can be refunded when domestic materials are imported into the Shanghai EPZs

Customs reporting procedures can begin when domestic materials enter the duty free zone. Tax can be refunded when goods leave the country

Processing Trade Banks Deposit Account System

Divided into four types of companies - A,B,C and D- for the sake of deposit account management

No deposit account management system

N/A

Foreign exchange policies

Sales, settlement, and exchange system and foreign exchange verification system in place

Companies foreign exchange income can be fully retained; no foreign exchange verification system.