On 29 September 2013, the Chinese government formally established the Shanghai Pilot Free Trade Zone (SH PFTZ). How the area will affect businesses in China and throughout Asia is top of mind as multinational corporations will seek to benefit from more relaxed financial and investment controls.
The establishment of the SH PFTZ has been recognised as a crucial economic reform initiated by China’s new leadership. The pilot project in Shanghai includes reforms focused on financial restructuring, an upgrading of the customs supervision framework, a simplification of administrative systems supporting the further opening-up of the services sector, and the creation of a competitive regulatory and tax environment for businesses. ChinaLux, the China-Luxembourg Chamber of Commerce, organised a lunch seminar on Wednesday 11 June in Luxembourg to give an overview of the SH PFTZ. Alexis De Meyere, manager at PwC China, presented the current possibilities of this new economic area from both a strategic and tactical perspective.
As roundtable moderator, Sami Douénias, partner, International Tax Leader at PwC Luxembourg described this pilot free trade area as a viable option to be considered when investing in the Chinese market. Luxembourg-based companies and financial institutions should start to assess the impact of the SH PFTZ on their business plan and operations in China. By developing a systematic strategy they’ll be able to take advantage of the policies set up in the zone.
As of mid-May, more than 7,500 companies, 20 foreign banks and 84 Private Equity funds have already registered in the zone.
Notes to the editor: