FOREIGN DIRECT INVESTMENTS
Stabilize the Foreign Trade and Foreign Investment Mentioned in PRC Government Work Report 2020
A closing meeting of the third session of the 13th National People’s Congress was held in Beijing on 28 May 2020 and the resolution on the report on the work of the Government was adopted and approved. The key messages for foreign investors are the following:
- Promote a higher level of opening-up of the Chinese market to foreign investments
- Support further liberalization and facilitation of international trade
- Provide guidance of healthy development of Chinese outbound investments
Full text of the Report can be downloaded from here: Download Report
China’s Civil Code coming into force on 1 January 2021
China’s third session of the 13th National People’s Congress voted to adopt the Civil Code of the People’s Republic of China, which will come into force on 1 January 2021. The current Marriage Law, Inheritance Law, General Principles of Civil Law, Adoption Law, Guarantee law, Contract law, Property law, and Tort Liability Law shall be repealed simultaneously. It is a systematic integration and compilation of decentralized civil legislation since 1949. One of the key points of the amendment of the Civil Code is to strengthen the protection of personal information and privacy.
The State Council Issues the Overall Plan for the Construction of Hainan Free Trade Port
On 1 June 2020, the Overall Plan for the Construction of Hainan Free Trade Port, formulated by the State Council, was officially released. The key policies include but not limited to:
- Maximum personal income tax of 15 percent high-end talents;
- Corporate income tax of 15 percent on encouraged industrial enterprises;
- Exempt from import duties, import value-added tax and consumption tax on imported goods purchase by island residents;
- Conduct the negative list of cross-border trade in services for Hainan Free Trade Port;
- Conduct a negative list management system on the issuance of work permit for foreign employees.
TRADE, CUSTOMS AND INDUSTRIES
Further compliance management guidelines for online retail platforms
The China Council for the Promotion of International Trade has completed the drafting of The Compliance Management Guide for Online Retail Platforms. The draft was published on 5 June 2020 for consultation until 26 June 2020.
The Compliance Management Guide for Online Retail Platforms includes detailed rules on the online retail operators in adopting compliance grading, assessment, management & supervision of online retailers. It is suitable for online retail platform operators in evaluating and managing the compliance of online retailers applying for joining the platform.
EMPLOYMENT & LABOR
Guangdong Province’s guidelines on applying for China visa under existing travel restriction
On 28 May 2020, the Foreign Affairs Office of the People’s Government of Guangdong Province issued an announcement explaining the basic procedures of applying for an invitation letter for the purpose of China visa under existing travel restriction imposed by the Ministry of Foreign Affairs of PRC and National Immigration Administration since 26 March 2020.
Foreign nationals engaging in necessary economic, trade, scientific or technological activities may apply for an invitation letter with the local Foreign Affairs Office, which then can be used to apply for a visa to enter China.
Similar procedures apply to other provinces. Foreign nationals who wish to travel to China should contact the local Foreign Affairs Office.
Shanghai – employer subsidy scheme for training fees
All types of enterprises in Shanghai affected by the pandemic which organized online training for employees and dispatched workers during the shutdown period can receive 95% subsidy based on the actual amount spent on the training course. Platform enterprises (e-commerce enterprises) and new business enterprises are eligible to apply. (Responsible units: Shanghai Municipal Human Resources and Social Security Bureau and Shanghai Municipal Finance Bureau)
FINANCE & TAXATION
The Application Period for Preferential Policy of Personal Income Tax of GBA is from 1 July to 15 August 2020
In accordance with Interim Measures of Guangzhou for Administration of Financial Subsidies under Preferential Individual Income Tax (IIT) Policies in Guangdong-Hong Kong-Macao Greater Bay Area (GBA), overseas high-end talents and talents in short supply who work within the administrative areas of Guangzhou shall be given financial subsidies if their IIT paid in Guangzhou exceeding the tax amount computed at 15% of their taxable income. The application period of this year for preferential policy in Guangzhou city begins from 1 July to 15 August.
Announcement of the State Taxation Administration on Matters concerning the Deferred Payment of Income Tax in 2020 by Small Low-profit Enterprises
From 1 May 2020 to 31 December 2020, small low-profit enterprises may defer the payment of corporate income tax for the current period after completing the filing of tax returns with prepayment according to the provisions in the remaining filing period in 2020, and the payment of all income tax amount may be deferred to the first period for filing tax returns in 2021.
Small low-profit enterprises refer to enterprises engaging in non-restricted and non-prohibited businesses, which satisfy three criteria simultaneously, namely, annual taxable income amount does not exceed RMB3 million, staff headcount does not exceed 300 and total assets do not exceed RMB50 million.
Written by China Consultancy Team, CW CPA
Among 108 global cities, Shenzhen was ranked 11th in the Global Financial Centers Index (GFCI) 27 Report published by the Z/Yen from the United Kingdom and the China Development Institute from Shenzhen.
The index evaluates thoroughly and ranks the world’s major financial centers in terms of business environment, human resources, infrastructure, development level and reputation.
As mainland China’s first-tier cities, Beijing, Shanghai, Shenzhen and Guangzhou have entered the top 20 in the world. Shenzhen came first among mainland Chinese cities in the Greater Bay Area and has played its special role. Shenzhen is expected to be a marketplace for innovation capital, with its advantages concentrated in the capital market, innovation investment and the service provision for the “Belt and Road”.
In additional, the GFCI questionnaire revealed that, Shenzhen was the 6th most mentioned city in terms of prospects over the next two to three years and was considered the 6th most competitive location for fostering a FinTech industry.
Written by Toby Wong, China Consultancy Team, CW CPA
In an unprecedented fashion, Shenzhen is currently striving to become a world-class new-type smart-city benchmark by increasing digitalization in social governance. In 2019, Shenzhen was ranked first among Chinese cities in terms of smart city development, according to the Information Research Center of the Chinese Academy of Social Sciences. It superseded the others, such as Hangzhou, Shanghai, Beijing and Guangzhou, with flying colours, having earned a comprehensive score of 77.4 points and been awarded a prize for taking the lead in smart city construction. How did Shenzhen achieve such a result?
The Shenzhen government has invested substantial resources to upgrade its smart city and digital government construction. In order to achieve this goal, Shenzhen is learning from other world-class cities to form a sound data management and security system, rapidly expanding the use of applications of big data, artificial intelligence, 5G and blockchain, and opening a new space in the digital world by promoting the integration of technologies, data and businesses across regions, systems, departments and industries.
With great determination and ambition, Shenzhen has been ready to face the challenges and opportunities of the digital era. Shenzhen plans to develop a new type of smart city operation and management system that is comprised of one city center, 11 district centers and numerous industrial centers. The Shenzhen Municipal People’s Government has also implemented a one-stop system that automatically reviews the applicants’ information of service items and approves their applications.
Regarding the livelihood, the information on personal documents, such as identity documents, driver’s licenses, social insurance, library and bank cards, will be integrated into one single account, through which residents can enjoy different types of services via fingerprint, facial recognition, identity card number or phone number. All such services will be consolidated on an official app.
Written by Toby Wong, China Consultancy Team, CW CPA
As the coronavirus pandemic continues to grow and evolve around the world, public and private sectors are scrambling to adapt to these times and take effective responses.
Whilst temporary containment measures are gradually relaxed by the Chinese government, the next step is to focus on mitigating the economic impact of COVID-19 across the Chinese businesses over the long term. This means designing and implementing measures to integrate economic reactivation, investment encouragement, and getting the country back on track. To do so – alleviate the economic impact of the COVID-19 epidemic-, the Chinese government have introduced a series of supporting policies at both central and local level.
On this occasion, CW was pleased to have been invited by The American Chamber of Commerce in South China (“AmCham”) to host a webinar that took place on 19 April 2020. More than 100 people and companies registered and participated in the webinar focused on business crisis management and the government’s contingency aid offer to Chinese companies. Topics covering everything from how to be prepared for and manage this disruptive and emergency, policies and subsidies related to FDI, to the role of the technology in the era, were discussed.
Headed by the president of AmCham South China, Harley Seyedin, and with the participation of Thomas Wong, Partner at CW CPA, and Victor Herrera, as the main presenter on behalf of CW, the webinar further enhanced our relationship with American companies in South China. This translates into a greater network of knowledge and advice to all foreign companies established in Mainland China.
For CW, actively participating in these open discussions means our firm’s commitment with our clients and all those companies running business in Mainland China, sharing valuable information and being able to provide the right services with the highest standards of quality and performance.
The American Chamber of Commerce in South China (AmCham South China) is a non-partisan, non-profit organization dedicated to facilitating bilateral trade between the United States and the People’s Republic of China. AmCham South China represents more than 2,300 corporate and individual members, and provides dynamic, on-the-ground support for American and International companies doing business in South China.
Written by Victor Manuel Herrera, Latin Department, CW CPA
In late April, CW had the pleasure to deliver a series of webinars in Mexico, sharing insights, experience and knowledge on how to overcome business challenges during COVID-19. With more than 100 people registered for the webinars and many more watching the video recordings, these webinars resulted from the collaborative efforts with our strategic business partners such as InvestHK and COMCE Sur.
COVID-19 landed in Latin America on 26 February 2020 when Brazil confirmed its first case. Mexico confirmed its very first case on 28 February in Mexico City. Since then, governments across the region – including Mexico – have taken an array of actions to protect their citizens and reduce the spread of COVID-19.
With the new coronavirus spreading rapidly across all Latin American countries, the seeming difficulty to stop the spread of coronavirus and the travel restrictions imposed by some governments in the region, it is difficult for LATAM businesses to successfully stay afloat in these times.
In the next coming months, our Latin Department will continue organizing more webinars on various topics relating to the latest government measures in battling against COVID-19 and helping our clients in Latin America steer clear of any policy uncertainty.
- InvestHK is a government department of foreign direct investment in Hong Kong, having a vision to strengthen Hong Kong’s status as the leading international business location in Asia. Its mission is to attract and retain foreign direct investment which is of strategic importance to the economic development of Hong Kong.
- COMCE is one of the main organizations dedicated to promoting foreign trade, foreign investment and the development of technology in Mexico. It has more than 50 years of experience in foreign trade promotion and represents around 2,000 exporting companies which carry out approximately 80% of total exports in Mexico.
Written by Victor Manuel Herrera, Latin Department, CW CPA
Has your team in mainland China returned to the office after the coronavirus outbreak? Please do not hurry in opening the physical premises immediately if your team has not resumed duty yet.
Enterprises should pay special attention to the local administrative rules regarding the work resumption. Please make sure that your enterprise has followed the policy measures closely and completed the necessary paperwork required by local authorities to apply for resumption of work with a disease control team at the street or district level in advance.
We have summarized some of the general requirements as follows.
1. Prevention and control mechanism are in place
Enterprises should formulate and improve epidemic prevention and control measures and emergency plans. Accountability system and the responsibilities of each person-in-charge at all levels shall be defined. An epidemic prevention and management system shall be established.
2. Staff monitoring is in place
Enterprises must do a good job of employee monitoring and registration. Each employee who resumes duties shall have his/her health conditions and travel history within the past 14 days reported to the enterprise. For those employees who are from or have been to seriously affected areas, a record should be set up and health management measures shall be taken. They may report duty if they do not have symptoms after 14 days of observation. Those who are still stranded in seriously affected areas should be asked to postpone their return to the office.
3. Facilities and materials are in place
Enterprises must prepare necessary epidemic prevention materials, such as infrared thermometers, disinfectants and surgical masks, and set up quarantine areas. Enterprises whose conditions do not allow such set up should specify the quarantine observation sites and register with the local bureau according to the unified arrangements of the located city and the district.
4. Internal management is in place
Enterprises should do a good job of ventilation, disinfection and sanitation management of the workplace and the staff quarters. In principle, enterprises should adopt “closed-off” management and a flexible work system. It is strictly forbidden that unrelated personnel enter the workplace of the enterprise. Body temperature of all entering personnel should be detected. Enterprises should encourage the implementation of shift work, online work platforms, videoconferencing and decentralized dining in order to reduce the staff movements and the risk of mass gathering.
5. Publicity and education are in place.
Enterprises should formulate staff training plans for epidemic prevention and control. Propagandas should be set up in prominent locations of the workplace for the mass education of epidemic prevention and control, improving the knowledge of the personnel. Publicity and education should be properly done through multiple channels.
Prior to the resumption of work, the company should take measures to ensure the health and safety of all the employees. Epidemic prevention facilities and materials, such as quarantine areas, surgical masks and disinfectants, should be prepared.
CW is glad to assist your company to prepare for resumption of work. Once you decide to resume the physical premises for work, please let us know and do not worry about the administrative work involved. Please plan ahead accordingly.
Written by Edwin Yin and Toby Wong, China Consultancy Team, CW CPA
CW has sponsored and attended this year’s Xceration Days organized by the German Chamber of Commerce (AHK)’s in Shenzhen. This is the biggest Sino-German event of the year, with at least 500 participants, including high-ranking political and economic decision-makers, market experts, corporate representatives from the modern industries as well as young entrepreneurs and innovators.
Written by Therese Feng, German Desk, CW CPA
The 2019 Qianhai Cooperation Forum was held in Shenzhen on 2 August 2019. The aim of the Forum was to publicly deliver the plans of Qianhai Cooperation Zone as a strategic point, and show Qianhai as an example for putting China´s opening-up policy into action.
The forum focused on the role of Qianhai, being one of the major players in the cooperation of Hong Kong – Macao – Guangdong province. According to the speakers, the key points carried by Qianhai in the cooperation between these cities and the development of the Greater Bay area were:
– The Free Trade Zone test and results of its implementation.
– Technological innovation, and the attraction to research, product development, etc.
– Risk supervision and control in the area.
The event was organized by the Authority of Qianhai Shenzhen – Hong Kong Modern Service Industry Cooperation Zone of Shenzhen Municipality and the Chinese Association of Hong Kong and Macao Studies.
The opening ceremony had important speakers such as Mr. Xu Ze, President of the Chinese Association of Hong Kong, and Macao Studies. Mr. Huan Liuquan Deputy Director, member of the Leading Party Member´s Group of the Hong Kong and Macao Affairs Office of the State Council, Mr. Chan Mo-Po Financial Secretary of the Hong Kong S.A.R. and Mr. Chen Ruigui, Deputy Secretary of the CPC Shenzhen Municipal Committee, who emphasized the importance of the mutual cooperation between Hong Kong and the rest of the Greater Bay Area and the commitment to continue with the current status of One Country Two Systems Policy. Chen mentioned that the current policy would grant the Greater Bay Area the status the country is looking for, and most importantly, maintain the life quality of all the habitants of the GBA.
Another impressive speech was given by Ms. Joan McEntee, former Undersecretary of the U.S. Department of Commerce and Chairman of the U.S. MKBC International Inc.. Referring to the current Trade War between China and the U.S., she mentioned the benefit for both countries in the years of cooperation are tangible. She firmly believed that both nations appreciate that their mutual cooperation is of significant importance not only for both countries but the entire world.
Another important topic in the forum was the technological development in Qianhai. The role of technology, the development of 5G network and the Internet of Things were the major points of the discussion, not only for industrial growth but also for social safety, health, fin-tech, etc.
Further information about the plans for the Qianhai Shenzhen – Hong Kong Modern Service Industry Cooperation Zone can be referred to the following website: http://www.szqh.com.cn/
If you wish to know the benefits of establishing a company in Qianhai, Shenzhen, please send us a message at firstname.lastname@example.org . We will share with you the benefits and process to set up at the Qianhai Free Trade Zone.
Written by Toby Wong, China Consultancy Team, CW CPA On 17 July 2019, CW CPA jointly organized a seminar as part of the “Regional Business Gathering Series – Hong Kong” event with the Commerce Bureau of Shenzhen Municipality and the Shenzhen International Investment & Promotion Association, under the theme of Winning Together in the Hong…
On 28 March 2019, CW organized a workshop in Shenzhen for a German startup delegation hosted by German Chamber of Commerce | South & Southwest China. The workshop was mainly about the requirements of establishing a business as well as annual compliance of operating a business in China especially in Shenzhen. The whole workshop sparked…