100 Opening-up Measures for Foreign Investors in Shanghai

Thursday, 12 July 2018 10:37

On 10th July 2018, Shanghai Government issued 100 new opening-up measures for the purpose of providing a better environment for foreign investors. The new measures covers the preferential and favorable policies covering to the aspects among the bank, security, insurance, foreign exchange, requirements for foreign investment, intellectual property right and etc. Shanghai Dongjin finds the below as the main points.

  1. Foreign equity restrictions on banks and financial asset management firms are canceled. Foreign banks are allowed to establish both branches and subsidiaries in Shanghai. Foreign banks, Joint Venture banks and the foreign invested banks are allowed to apply for RMB business when establishment.
  2. No foreign ownership limits will be set for new financial asset investment and wealth management companies initiated by commercial banks.
  3. Foreign invested banks, Joint Ventures banks and the branches of the foreign banks are supported to carry out agency issuance, agency payment and underwriting of government bonds (including bonds issued by foreign governments in China).
  4. Foreign banks are supported to expand RMB business and derivative products authorized by the administration bank to its several branches. It is also supported to combine the calculation of operating funds allocated by foreign banks to Chinese branches.
  5. It is encouraged that foreign investors to enter its trust, financial leasing, auto finance, money brokerage and consumer finance sectors.
  6. Foreign investors are allowed to own up to 51 percent of shares in securities, funds and futures joint ventures. Securities joint ventures will not be required to have at least one securities firm among its domestic shareholders.
  7. The business scope for securities joint ventures will be expanded and it is allowed to involve in the brokerage and consultancy services.
  8. Foreign businesses will be allowed to own up to 51 percent of life insurance joint ventures, and the cap will be phased out over three years.
  9. It is allowed for foreign investor to conduct insurance brokerage and assessment business.
  10. It is not required for the foreign insurance investors to have its Representative Office in China for two years before its application for setting up the foreign owned insurance company.
  11. Offshore insurance business will be developed.
  12. It is allowed for foreign enterprises and investors to join the Shanghai security market.
  13. Daily quotas for the stock connect schemes between the mainland and Hong Kong will be expanded. The "Shanghai-London Stock Connect" is to be launched within this year.
  14. It is to open the market for clearance of bank cards by allowing the entrance of non-banking payment companies into it, and relax the rules for foreign financial companies in doing credit ratings.
  15. The requirement for setting up Foreign Investment Company will be lower: the total asset of the foreign investor in the last year will be no less than 200 million US Dollars and the number of companies set up by the foreign investors in China is reduced to five.
  16. It will further open the market for the foreign investors to set up operational vocational skills training institution.
  17. The opening-up policies for the value-added telecom services will be expanded from Shanghai free trade zone to the whole Shanghai.
  18. The requirement for foreign technicians in the foreign invested construction engineering design enterprises is cancelled. The qualified foreigners are allowed t to provide engineering consultancy services in Shanghai for the business which are not under the licenses.
  19. The scope will be expanded for the law firms jointly managed by the local and Hongkong or Macau partners.
  20. Restrictions on foreign invested HR companies and certifying companies will be lifted.
  21. Shanghai will encourage foreign investments in the advanced manufacturing sector and push forward the reforms in the automobile, aircraft and shipbuilding industries.
  22. The implementation of the foreign-funded new-energy automobile projects will be hastened, while foreign auto companies will be encouraged to establish research and development centers and high-end vehicle projects in Jiading District and Lingang area.
  23. The foreign investment in the aviation industry will be lifted, cooperation with other nations in the field will be encouraged, and communication abilities and collaboration on talent, technology and management will be enhanced.
  24. Foreign investment will be invited in some areas of shipbuilding such as high-end ship manufacturing, and design, research and development.
  25. Imported cancer drugs which are not registered in China, will be trialed in Shanghai first before they apply for registration. The same model will be followed for medical equipment for treating serious diseases.
  26. The construction of ports will also be encouraged as the city plans to become an import center for drugs and medical equipment.
  27. Shanghai international financial center will be upgraded and intellectual property protection will be improved by working with the judiciary and administration.

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Mr. Mike Chang

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