Saturday, July 21, 2018

Set-Up China Free Zone Company

free zone cinaIn the last few years, Chinese Authorities have developed plans to implement more and more the Country to foreign investment in China, which has always been the core of its social economic development. One of the most important aims is to make its domestic regulatory system uniform to help business in China, also granting foreign investors a closer and closer approach to its local investors's one.

Strategic tools of China to attract foreign capital easily are its Special Economic Zones in China, which offer tax breaks, economic and logistics benefits, with particular regard to anyone wishing to establish a company in China, working in services and telecommunications sectors, which are foundamental for China's economic reform.

Special Economic Zones in China - aka Chinese Free Zones - are usually placed in port cities, industrial areas or in regions where technology or manufacturing centers are particularly active. Within these areas, goods can be moved without any interference by Customs Authorities of the Country; only when such goods are exported out of a Special Economic Zone of China, they will be subject to standard customs regulations.

Free Zones in Cina have different aims: a Free Trade Zone, Export Processing Zones and Bounded Zones, Logistics Parks.

In China there are over 16 Free Trade Zones including the Free Trade Zone in Shanghai and three new Free Trade Zones in Tianjin, Guangdong and Fujian. Anyone wishing to set up a company in China in the Free Trade Zone in Shanghai can benefit from exemptions on customs duties and import taxes on goods transported between such Free Trade Zone in Shanghai and abroad, immediate tax rebates on domestic goods moved within the Free Trade Zone in Shanghai, tax exemptions on imports of machinery and production tools. The Free Trade Zone in Shanghai also allows to pay income taxes from corporate assets revaluation in 5 years time.

There are also many Chinese Export Processing Zones set up near areas of economic and technological development of the most important cities of the Country (e.g. Beijing, Dalian and so forth). Bounded Zones are a variation of Export Processing Zones, acting as logistics hubs of the major multinationals. Any company which works in these Chinese Free Zone can benefit from tax credits, reduced rates, exemptions from duties and taxes related to import-export negotiations, as well as VAT ones. One of the most important Bounded Zone in China is the Free Trade Zone in Shanghai Waigaoqiao.

Despite the different nomenclature of Free Zones in China and any specific condition required to obtain these benefits, all of them are united by tax breaks, i.e. exemption from customs duties and indirect taxes on imports of specific products, permit to store raw and packaging materials imported in customs warehouses, duty-free when exporting products modified in the special area exported outside China.

The Free Trade Zone in China applies a different law than the rest of the Country, bureaucracy is easier, as well as its financial and tax benefits, which mark China's will to create more opportunities in China in order to attract foreign investment and to better its economic reforms, implementing and encouraging business in China.

In addition to national provisions, subsidies are characterized by varied, differentiated benefits and tax breaks at various provincial and Municipal levels.

BBC-LLP offers a first consultancy for freeFirst Meeting* - to anyone wishing to start a process of internationalization involving China, to establish a Chinese company and/or WFOE or to get tax benefits thanks to Free Zones in China.

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