China Alerter August 2010

Operating Business in Chinese Free Trade Zones

A free trade zone (FTZ) is an area within mainland China which does not belong to the Chinese customs territory. Within a FTZ normal trade barriers such as import tariffs, export duties and taxes are eliminated and bureaucratic requirements are lowered in order to attract foreign investment and to promote certain forms of business. For example the Shanghai Waigaoqiao FTZ aims to encourage import and export businesses, entrepot trade, processing trade, (bonded) goods storage and transport, financing etc.

There are up to now over 15 FTZs in China, and depending on the intended business operations in China, FTZs may have advantages over other locations outside a FTZ, becoming a preferred choice of business location for many foreign investors. This newsletter provides basic information and updates on operating business in a Chinese FTZ.

Lawyers Cody Chen