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What are some of the advantages for foreign investors of investing in the Shanghai Free Trade Zone (FTZ)?


The FTZ has relaxed incorporation requirements; it cancels out the minimum registration capital of RMB 30,000 for limited liability companies, the RMB 100,000 minimum for single shareholder companies, and the RMB 5 million minimum for joint stock companies. Moreover, the Shanghai FTZ has implemented a new capital registration under which foreign investors are no longer required to contribute 15-percent capital within three months and full capital within two years of the foreign invested entity’s establishment.

Shareholders of companies established in the FTZ may agree upon the contribution amount, forms, and period of contribution at their own discretion. Shareholders are still liable for the authenticity and legality of capital contributions and will be held accountable to the company within the limits of their respective subscribed capital or shares. The new system has been proven feasible, with the Zone receiving substantial actual capital contribution in the past three months, and was rolled out nationwide on March 1, 2014.

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