Preferential Policies

	The only site in the country, where foreign only-owned trade company could be established.
	In the FTZ, bonded processing, warehousing and displaying may be conducted without time limit; and the bonded products may be bought and sold in the zone freely.
	All the facilities, construction materials and twenty types of office and utilities used by enterprises themselves in the FTZ are exempted from taxes and licenses.
	The income tax rate for the FTZ enterprises is 15%; manufacturing enterprises enjoy the policy of "two years exemption and three years half reduction of taxes" since their first profit-making year. Non-manufacturing enterprises enjoy the policy of "one year exemption, two years reduction and 10% levy" since their first operational year.

Shanghai Waigaoqiao FTZ is the earliest and most open SEZ by Chinese government. The central government issued in particular a special legislation (concerning customs, taxes and foreign exchange, etc.); established special administration structures to exercise special management upon this area. Its incentive policies are listed in the following:

Investment Policies:

1. Opening to all the Sino and foreign ventures; permits the establishment of trade, warehousing and distribution, processing companies and companies of other service and trade area, in the form of foreign solely invested, joint venture and Sino-foreign cooperation. Comprehensive enterprises concerning all the above fields may also be set up.
2. No matter investing in whichever field in the FTZ, foreign investors may apply for 100% solely-owned companies, and are not restrained by the industrial investment orientation of Chinese government.

Custom Duty Policies

1. All the enterprises invested in the FTZ, all their imported goods, including mechanical facilities, office utilities (second-hand goods included) may enjoy 100% duty-free policy (transporting vehicles are excluded.)
2. The percentage of domestic and overseas sales and custom tax rate are the same as those of the FTZ.

Bonded Processing of Products

1. When the enterprises in the zone to conduct the businesses of the processing of materials supplied by buyers or of imported by materials, they only need to make registration by means of FTZ brochure. The guarantee deposit system does not apply to these enterprises; and export products or bonded domestic transference are exempted from any extra taxes.
2. After the approval of their application, the processing enterprises in the zone, which have adopted imported and domestic materials in the processing process, may directly sell their products on domestic market after having paid taxes on imported components by the domestic sale percentage approved.

Warehousing of Products

1. Any products (except weapons, drugs and contaminated in goods) are allowed to be bonded warehousing or displaying without any time limit and the Customs won't levy any supervision fees.
2. At the permission of the Customs, the bonded warehouses in the FTZ may store non-bonded goods at the condition of segregative management.
3. At the permission of the Customs, the bonded commodities are allowed to be displayed outside the zone for a short time after paying the guarantee deposit.
4. For enterprises with good reputation and prestige, at the approval of the Customs, the bonded components, and the maintenance parts in their trade, which are in small batch and large sum and with low price, may adopt the management of "consecutive going through with one time examination and cancellation".

Tax Policies

1. Enterprises engaged in manufacturing business in the FTZ enjoy 15% income tax rate. Taxes are exempted in the first profit making year, and for the second and third year 7.5%, and 15% for the years latter.
2. Processing VAT are exempted for the export or bonded transference within the zone for manufacturing enterprises.
3. Profits after tax may be exchanged 100% and remitted overseas, without any profit remittance taxes.

Foreign Exchange Management

1. Enterprises in the zone may open foreign exchange account and renminbi account and combine their capital account and settling account of trade.
2. It's allowed to settle accounts in terms of foreign exchange or Renminbi between enterprises in the zone and non-FTZ enterprises. Foreign exchange obtained by FTZ enterprises may 100% deposit in foreign exchange without abiding by compulsory exchange system.
3. Implement loose examination and cancellation system on collection and payment of foreign exchange. For enterprises with legal operation and good conducts, the sum of exchange of Renminbi has no restraints.

Functions

Shanghai Waigaoqiao FTZ is the earliest and the largest FTZ in China. It has formed port industries by the fundamental truss of manufacturing and processing, free trading, transport trading, store allocating, ship servicing and service trading. Among them, industry flowing and storing, manufacturing and processing, international trading, tax-free commodity exhibiting are the four most important functions.

Storing and Industry Flowing

Which main conveniences of the FTZ's tax-free storing and industry flowing function do the investors have?