Doing Business in China

Brief Introduction to Guangzhou Free Brief Introduction to Guangzhou Free- -trade Zone,Nansha New Area, trade Zone,Nansha New Area, Incorporate Incorporate Business Business Set Up Set Up Company Company in GDFTZ (Nansha), in GDFTZ (Nansha),Corporate Formation Corporate Formation Company Company Registration in GDFTZ (Nansha) Registration in GDFTZ (Nansha) Located in the southernmost of Guangzhou, Nansha New District is the city’s only gateway to the sea and the geographical center of the Great Pearl River Delta (PRD) region. It is also an important hub for clusters of cities at both banks of the Pearl River and the country’s south gate open to the rest of the world. More than 10 cities with strong economic capacity such as Shenzhen, Foshan and Dongguan and two Special Administrative Regions (SARs), i.e. Hong Kong and Macao, scatter within this 100-kilometer-radius region. It is 38 sea miles away from Hong Kong and 41 sea miles from Macao. The geographical proximity to these two SARs and the support of Guangzhou and the Great PRD region with 60 million populations contribute to the importance of Nansha New District. Its influence goes beyond South China and the Pan-Pearl River Delta Region to Southeast Asia. It enjoys geographical advantages and strategic importance by linking China with the rest of the world on sea. The New District helps Hong Kong and Macao business better explore the mainland market and facilitates mainland business to go international. Moreover, due to its broad hinterland, the New District boasts huge development potential

Nansha New Area, or GDFTZ (Nansha), is blessed with the policy advantages of being a state-level new area, state-level economic and technological development zone, bonded port area, and new and high-tech development zone. With a sound industrial foundation, Nansha New Area is one of the country’s three shipbuilding bases, a national auto and spare parts manufacturing and export base, as well as a nuclear power equipment manufacturing base in the Pearl River Delta region. Where scientific research is concerned, the research base of the Guangzhou Institute of Industry Technology under the Chinese Academy of Sciences located in Nansha has built a technology innovation platform for numerical-control equipment technology research and development, and modern logistics industry planning services; and it has been rated as a state-level technology transfer demonstration base. Moreover, the Hong Kong University of Science and Technology and Fok Ying Tung Foundation have jointly established a facility for promoting the internationalisation of traditional Chinese medicine in Nansha New Area. GDFTZ (Nansha) will devote great efforts to creating a regulated international business environment in line with new international practice. It aims to take the lead in implementing free trade in services with Hong Kong and Macau, building an international shipping and logistics centre with comprehensive international trade functions and strong financial innovation ability, as well as developing into a demonstration base for technology innovation cooperation between countries and regions along the 21st Century Maritime Silk Road. GDFTZ (Nansha) comprises of the following Seven zones) 1. International shipping development and cooperation zone

2. Financial and Commercial Development zone 3. Guangdong-Hong Kong-Macau integrated development zone 4. Education and Medical zone 5. Scientific and technological innovation zone 6. Outbound investment service zone 7. Processing Trade Transformation zone Section1. An international shipping development and cooperation zone, with focus on developing services including shipping logistics, bonded warehousing, international transshipment, international trade, bulk commodity transaction, and auto logistics. The zone will serve as a test bed for the pilot implementation of reform in international shipping services and customs clearance. Section 2. A financial and commercial development experimental zone, with emphasis on developing the headquarters economy, financial services and commercial services. Efforts will be made to promote Guangdong-Hong Kong-Macau cooperation in financial services, as well as explore ways to experiment with renminbi convertibility under the capital account.

Section 3. A Guangdong-Hong Kong-Macau integrated development experimental zone, with emphasis on developing information technology, financial back-office services, commercialisation of technological achievements, and professional services. Action will be taken to build a Guangdong-Hong Kong-Macau producer services development base, and to explore new mechanisms for promoting social management innovations as well as economic integration between the mainland, Hong Kong and Macau. Section 4. An international education and medical cooperation experimental zone, with focus on developing such sectors as education, training, health care and medical care. The zone will also take the lead in experimenting in-depth opening up of the education and medical sectors to Hong Kong, Macau and international players. Section 5. A Guangdong-Hong Kong-Macau scientific and technological innovation and cooperation zone, with emphasis on developing technological innovation, cultural and creative industries, service outsourcing, and the yachting and cruise liner economy. Efforts will be made to create new modes of cooperation in scientific and technological R&D between Guangdong, Hong Kong and Macau, set up a Guangdong-Hong Kong-Macau innovative achievements commercialisation base and an international scientific and technological innovation service centre. Section 6. A comprehensive outbound investment service zone, with emphasis on developing the business services sector, fostering new formats of foreign trade, and attracting clusters of small and medium-sized enterprise (SME) headquarters. Steps will be taken to assist Hong Kong and Macau SMEs in tapping the mainland market as well as give support to mainland SMEs in developing the international market. Section 7. A processing trade transformation and upgrade service zone, with focus on developing producer services such as processing and manufacturing activities, R&D and incubation, data services, e-commerce, and testing and certification services. Efforts will be made to build public service platforms to facilitate the transformation and upgrade of processing trade enterprises, covering technology R&D, industrial design, intellectual property and other issues.

Business Environment Business Environment Some unique aspects feature in the Nansha New Area. For businesses setting up and operating within the area, no minimum registered capital will be necessary, though this is simply an eased and removed restriction for those entering the market. Issues that arise within the FTZ are to be heard before an FTZ-based arbitration and resolution center. Land will also be cheaper as prices range around RMB 1,800 per meter squared. Corporate income tax is pinned at 15 percent with accompanying E-taxation services and procedures allowing 24-hour self-service tax ATM locations. Here, the declaration of tax and purchase invoices takes on a digital concept of E-invoices, allowing for a smoother and less tedious process. Corporate income tax will also be eligible for up to 95 percent in rebates of local portion covering five years onward. Moreover, immediate VAT refunds on exports and immediate VAT GTP applications are digitalized. Businesses are able to file their applications online for the issue of invoices and then can proceed to have them delivered by post OR obtained through the E-taxation ATMs. Personal income tax will also have a rebate covering the gap between local and native individual income tax. Shipping and cargo have an enhanced, sped up process with all incoming cargo inspected in a specific area. This reduces time by 50 percent, rendering the initiating formalities to commence before the ship docks at the port instead of the previous and non-FTZ formalities of only starting once docked. A 24-hour service is provided and automated to ensure all processing is done swiftly.

Objectives Objectives Further Developing Guangdong-Hong Kong-Macau Stronger links promoting the already established Mainland and Hong Kong Closer Economic Partnership Agreement (CEPA) are ongoing targets enabling service, trade and business liberalization. Hong Kong and Macau investors already enjoy the benefits of this agreement and have removed barriers when conducting business within China. The Nansha New Area will build on this with continued promotion to Hong Kong and Macau firms. Having the choice to utilize the existing partnership arrangement or the FTZ’s facilitation measures and bonded agreements, Hong Kong firms will have even greater preferential enticement to do business in the area. Ultimately, the goal is a deepened and more liberalized co-operation. This proximity will be of mutual benefit to both the Mainland, Hong Kong and Macau investors. Cross-border Renminbi business and further developing Hong Kong as a destination for offshore Renminbi will attract Chinese firms to use this as a going-out stepping stone. Internationalizing the Renminbi by means of this process will target Guangdong enterprises to strategically move towards Hong Kong. Scientific collaborations, such as international telecommunication channels geared toward Hong Kong and Macau, and major Hong Kong universities have been cooperating within the zone. Increased cross-border mobility for qualified professionals from Hong Kong and Macau will allow the Nansha New Area to continue to attract foreign talents.

Open Economic System Open Economic System Based on previous pilot reforms, the economic system of the Guangdong FTZ and the Nansha New Area will seek to be operational and fully implemented over a span of three to five years. Creating advantages on an international scale will include the establishment of a free trade park with a regulated environment. Supervision will come in a new form of a market-oriented administration and management system to increase efficiency and solidify a platform of ‘low entry threshold, high control standards’. As with other FTZs, the negative list implemented in the zone will reduce and remove access restrictions on foreign invested firms, thereby increasing openness and transparency. Financially, lower entry requirements exist for foreign equity funds doing business in sectors of investment and fund management and capital settlement. Multi-currency industrial investment funds and potential issuing of multi-currency land trust funds are being analyzed on the basis of feasibility and implementation. Leasing options will also enjoy reforms as the area hopes to achieve uniform market access requirements for finance lease management and innovation. As mentioned before, importing into the area from overseas is much easier, with some speculation that goods may not need to be checked. Nevertheless, preferential measures of expediting declaration and reduced fees are in place. E-commerce as well will allow individuals and firms to make orders with goods arriving in the zone with the applicable taxation laws levied. Overall, the Nansha New Area has multiple advantages and a comprehensive set of policies to support future development – financial innovation as an international hub; custom clearance convenience that streamlines trade;

cross-border e-commerce; and an expedited commercial registration process. With China continuing to experiment and implement Free Trade Zones throughout the coast, investors and firms will see anincrease in the ease of doing business in the country. Regardless of the timing of future developments, the Guangdong FTZ and its accompanying three areas will be pivotal to developing the future goals of China’s economic and global outlook. For more information about Guangzhou Free-trade Zone,Nansha New Area, please visit: http://www.gzns.gov.cn/pub/nszmsyq_en/ An increasing number of domestic and international companies are focusing on Nansha district, part of the Guangdong Pilot Free Trade Zone, in Guangdong province, looking for new businesses development opportunities and investments. It could also attract related business engaged in the selling and leasing of vessels and insurance to the area, he noted, adding that a shipping financial center will also be established in the area. In order to attract such companies to the Nansha New Area, the local administrative office has formulated a range of supportive policies, including a shipping industry fund to solve logistics fundraising problems Improved logistics measures and facilities have helped attract the more than 870 crossborder e-commerce traders that had registered in the area, Among the traders are a number of domestic e-commerce giants, such as Tmall and JD's e-shop for international goods, as well as Suning's online store

Shipping is just one industry being supported by and thriving in Nansha New Area, which has also attracted more than 530 financial companies, including 13 branches established by China's "Big Four" State-owned banks and other commercial banks. Enterprises engaged in advanced manufacturing are setting up in the zone, including Gac Toyota Motor Co Ltd, which is building a factory with a production capacity of 220,000 units. A number of leading companies are currently in discussion with the zone's authorities about establishing operations there, including the China State Shipbuilding Corporation, Herrenknecht AG, a leading German manufacturer of tunnel-drilling machines. The eventual aim is to form an industrial cluster of high-end manufacturing. Since Guangzhou Free-trade Zone ,Nansha New Area was established , Tommy China Business Consulting has been focusing on consulting services for our clients to set up business in Nansha New Area, we offer one stop services for Nansha New Area company formation. Please visit: Http://www.tommyconsulting.com Email: tomlee@tommyconsulting.com, Skype: tomleeli WhatSapp/Wechat/Cell Phone: +86 18926401128

Doing Business in China