We found that recently there are more and more financial leasing WOFE registered in the Shanghai Free Trade Zone. We conclude the below points for your reference.
The requirement for the foreign investors
1. The investor must be a company which has been established for over one-year with the total asset more than USD five millions instead the individual.
2. The registered capital should be no less than USD ten millions.
3. The senior management must have the relevant experience and with no less than three years working experience.
The proposed business scope
1. Financial leasing business;
2. Leasing business;
3. Purchasing the leasing property within China and abroad;
4. Processing and repairing the salvage of the leasing property;
5. Leasing transactions advisory and guarantee;
6. Commercial factoring business related with its main business;
1. Property as manufacturing equipment, communication equipment, medical equipment, scientific research equipment, inspection equipment, engineering machinery, office equipment and other types of movable property;
2. Aircraft, automobiles, ships and other transportation vehicles;
3. The software, technology and other intangible assets on the above property and transportation vehicles, but with the intangible assets value shall not be more than half value of the leasing property.
Special Policies for Financial Leasing Companies in Shanghai Free Trade Zone
Commercial factoring business related to the main financial leasing business is allowed. (this regulation recently is applicable to the whole China)
Such company can open the overseas RMB bank account and borrow overseas RMB. The borrowing quota is subject to the mode as the balance control. Such money can only be used in the FTZ or overseas for the reasonable purpose.
Such company can set up two-way overseas RMB capital pool.
Provide the convenience on the overseas guarantee for such companies.
The registered capital of such company can be settled into the RMB account as wish. But the usage of such capital should be reasonable and legal.
Provide the convenience on overseas payment for such companies.
When carrying out the financial leasing business, such companies can have no restriction on the overseas lending by domestic companies. Such companies can open the overseas lending bank account and for retaining the income from financial leasing business.
It is allowed to set up subsidiary company in the FTZ for carrying out the foreign leasing business (“SPV”). There is no requirement for the registered capital for the SPV in the FTZ. (this regulation recently is applicable to the whole China)
For the financial leasing companies or the SPV registered in the FTZ, it can enjoy the export tax refund pilot policy.
For the financial leasing companies or the SPV registered in the FTZ, and upon the approval for purchasing the plane over 25 tons from overseas and leasing it to the local airplane companies, it can enjoy the tax preference policies on the import VAT.
The pre-payment procedure for the big financial leasing project as the plane and ship is simplified.
For the financial leasing companies registered in the FTZ, it can enjoy the financial support policy for financial industry by the Pudong government.
Shanghai Customs recently take out the reform on the financial leasing companies registered in the FTZ. For the import financial leasing business and the tax clearance is made by the local lessee. The local lessee can apply for the payment of duty and import VAT during the different schedule and make the guarantee by written form.
If you want to know more details, please contact our senior consultant.
Ms. Jojo Hu
TEL: 0086-21-68868335 ext 324 / FAX: 0086-21-68868021