- The Shanghai Municipal People’s Government Releases the 2014 Revised Version of ‘Negative List’ Applicable in the Shanghai Free Trade Zone
On 1 July 2014, the Shanghai Municipal People’s Government released the 2014 Revised Version of ‘Negative List’ applicable in the Shanghai Free Trade Zone, containing 139 special administrative measurements, while the previous version contained 190 ones, representing a change of 26.8% contents of the Negative List.
The Revised Version of ‘Negative List’ eliminated fourteen (14) material clauses to expand business scopes, fourteen (14) material clauses to lift dual restrictions on both domestic and foreign investments and twenty three (23) clauses to readjust categories. The eliminated clauses, including those restricting foreign investment in mail orders and online sales of ordinary commodities, allowing wholly owned foreign businesses to deal in railroad transport, etc., relate to manufacturing, real estate, infrastructure, commercial trade, shipping, social service sectors, etc.
Website of the Municipal Government of Shanghai:
http://www.shanghai.gov.cn/shanghai/node2314/node2319/node12344/u26ai39501.html
- The Ministry of Commerce Publishes the Notice on Improving the Review and Administration of Foreign Investment
On 25 June 2014, the Ministry of Commerce published the Notice on Improving the Review and Administration of Foreign Investment, stipulating that the amount of capital contribution subscribed, the mode of contribution and the term of capital contribution shall be determined on agreement by corporate investors (shareholders or initiators) on their own, and be specified in their joint venture (business cooperation) agreements and Articles of Associations.
In addition, as stipulated by the Notice, unless otherwise specified in laws, regulations or decisions made by the State Council on minimum registered capital in given industries, the minimum registered capital restriction on startup companies shall be lifted, without prejudice to provisions on eligible proportions of registered capital to total invested capital in the Provisional Rules on Eligible Proportions of Registered Capital to Total Invested Capital Applicable to Joint Ventures and other existing regulations.
Website of the Ministry of Commerce:
http://www.mofcom.gov.cn/article/difang/shandong/201406/20140600639244.shtml
- Shanghai Municipal Human Resources and Social Security Bureau Releases Measures on Record of Employment Adjustment Schemes by Labor Dispatch Units Based in the Shanghai Municipality
On 7 July 2014, Shanghai Municipal Human Resources and Social Security Bureau released Measures on Record of Employment Adjustment Schemes by Labor Dispatch Units Based in the Shanghai Municipality, stipulating that labor dispatch units shall submit for record an Employment Adjustment Scheme for excessive dispatched staff outnumbering 10% total staff, if any, to local human resources and social security bureaus of the district (or county) where their principal business offices locate.
Website of the Shanghai Municipal Human Resources and Social Security Bureau:
http://www.12333sh.gov.cn/201412333/xxgk/gsgg/201407/t20140716_1186555.shtml
- The State Administration of Taxation Makes the Announcement of Relevant Matters on the Reporting of Overseas Investments and Income by Resident Enterprises
On 16 July 2014, the State Taxation Administration of P.R.China made the Announcement of Relevant Matters about Resident Enterprises’ Declaration of Information about overseas Investments and Income to set standards for what should be included in such information and how it should be reported.
The Announcement has specified which enterprises should complete and submit the Form for Reporting Information on Purchase of Shares in Foreign Enterprises by Resident Enterprises (the ‘Form’) and what is necessary to be submitted with the Form. A resident enterprise that can provide reasonable grounds to prove that it is genuinely unable to report information on overseas investments and incomes by the deadline prescribed in the Announcement may apply for extension to the competent taxation authorities in accordance with the law. Overseas legal provisions, commercial contracts or agreements that restrict the provision of relevant information do not constitute reasonable grounds.
Website of the State Taxation Administration:
http://www.chinatax.gov.cn/n2226/n2271/n2272/c747868/content.html
- The State Administration of Foreign Exchange of P.R.China Publishes New Policies on Administration of Overseas Investment and Financing and Return on Investment by Domestic Residents via Special Purpose Companies
On 14 July 2014, the State Taxation Administration of P.R.China published new New Policies on Administration of Overseas Investment and Financing and Return on Investment by Domestic Residents via Special Purpose Companies, to simplify procedures of and facilitate cross-border capital transactions in connection with and/or arising from investment and financing activities domestic residents engage in via special purpose companies.
The Policies have explicitly defined ‘domestic institutions’, ‘round-tripping investment’, etc. and listed necessary supporting materials for foreign exchange registration applications filed by individuals and enterprises respectively. Repatriation of profits and dividends obtained by domestic residents from special purpose companies shall be subject to current account foreign exchange administration rules, while repatriation of foreign exchange income obtained by taking advantage of capital volatility should be subject to capital account foreign exchange management rules.
Website of the State Administration of Foreign Exchange of P.R.China:
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