Shanghai's FTZ law to provide legal basis for future reform

Shanghai's FTZ law to provide legal basis for future reform

Shanghai's FTZ law to provide legal basis for future reform
 
SHANGHAI’S lawmakers yesterday passed a set of rules to manage the city’s pilot free trade zone, which is expected to provide a legal basis for future innovation.
 
The Shanghai People’s Congress, the city’s legislative body, voted unanimously to pass the new law that covers regulations on supervision, investment, trade, financial services and taxation in the China (Shanghai) Pilot Free Trade Zone.
 
The law, which includes nine chapters and 57 articles, will come into force on August 1, and will legalize reforms that are being tested in the zone.
 
“The construction of Shanghai pilot free trade zone should go in line with the city’s goal to build an international financial, trade, shipping and economic center,” lawmakers said.
 
Reforms should be carried out step by step to wider openness, transform government role and establish a supervision model that is compatible with international investment and trade rules.
 
The regulation includes items on registering a business in the zone, a negative list for foreign investment, measures to facilitate customs clearance procedures and rules to boost financial liberalization.
 
“The enactment of the law ensures that reforms and innovation in the zone can be carried out under a legal framework. It is a significant step toward building a law-oriented market environment in the zone,” said Dai Haibo, executive vice director of the zone’s management committee.
 
Ding Wei, director of the city’s legislative affairs commission, said the law ensures that all reforms initiated by the zone can be copied and expanded to other areas while leaving room for future changes.
 
To boost market vitality, the law said it will allow citizens, legal persons and other organizations to explore reform and innovation in the zone in any areas that are not banned by laws and regulations.
 
The law also requires regulators to create a system to manage risks, simplify currency exchange procedures for cross-border investment, boost the use of yuan, and liberalize interest rates.
 
It also stipulates measures to enhance oversight of the zone, including building a system to prevent illicit competition, strengthening integrity management system and inviting industry associations to participate in market supervision.
 
Launched last September as a testing ground for reforms, the zone has adopted a raft of measures to lower investment barriers. Earlier this month, the regulator lifted more than 50 restrictions governing foreign investment in the zone to make room for foreign participation.
 
Till the end of last month, the zone had attracted 10,445 enterprises, including 1,245 foreign-funded.

Lawyer Consulting
Legal Help for Foreign Enterprises into Shanghai FTZ : Solution Centre

Are you short on legal help and want to launch your business idea in China Shanghai Free Trade Zone? We offer ONE-STOP business law services and Turn Key Solution to Foreign Enterprises from all over the world.Contact Your Shanghai FTZ Consultant