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6 Special Report on the State of Business in South China
Zone, approved by the State Council in June 2012. By the end centives that are likely to be extended to the other areas in Guang-
of January 2015, a total of 21,666 companies with a combined dong Province in the near future. This is designed to extract the
registered capital of RMB 1372 billion had already registered in ‘next wave’ of FDI in areas such as Hengqing Island near Zhuhai
the zone. A joint venture between Hong Kong and Mainland and Nansha Port near Guangzhou, and if successful may eventu-
China, and supported by the State Council, the Qianhai Zone ally be instituted nationwide.
is designed as an experimental business zone for better interac-
tion between the two jurisdictions’ financial, logistics, and IT
services sectors. It covers slightly less than 20 square kilometers
on the western side of Shenzhen, and is expected to achieve a
GDP of RMB150 billion by 2020.
Among its many goals, the Qianhai Zone will serve as a pilot
area for the liberalization of China’s financial sector as a whole,
including preferential policies such as:
• Allowing the Qianhai Zone to explore the expansion of
offshore RMB flow-back channels, and establish an inno-
vative experimental zone for cross-border RMB transac-
tions;
• Supporting the granting of RMB loans for offshore proj-
ects by banking institutions established in Qianhai;
• Under the CEPA framework, conducting studies on the
granting of RMB loans by Hong Kong-based banking
institutions for enterprises and projects established in
Qianhai;
• Supporting qualified enterprises and financial institutions
registered in Qianhai to issue RMB bonds in Hong Kong
within the quotas approved by the State Council to sup-
port the development of Qianhai;
• Supporting the innovative development of foreign-invest-
ed equity investment funds, and actively exploring new
modes of foreign exchange settlements of capital funds,
investments and fund management; and
• Supporting the establishment of international or national
management headquarters or business operation head-
quarters by Hong Kong and other onshore and offshore
financial institutions.
Qualifying enterprises will be entitled to a reduced corpo-
rate income tax rate of 15 percent, and to increase investor con-
fidence in the area, the government has stated plans to explore
the establishment of branches of Hong Kong arbitration institu-
tions in Qianhai. To attract foreign talent, especially financial
sector employees from Hong Kong, the zone offers a special 15
percent salary tax rate for foreign nationals living or working in
Qianhai. In April 2013 the municipal government announced
four industries–finance, modern logistics, information services,
and related industries operating within the zone–that are eli-
gible for special funding.
Identified as “an area for spearheading industrial restructuring
in the Pearl River Delta region,” the Qianhai Zone provides in-
56
Zone, approved by the State Council in June 2012. By the end centives that are likely to be extended to the other areas in Guang-
of January 2015, a total of 21,666 companies with a combined dong Province in the near future. This is designed to extract the
registered capital of RMB 1372 billion had already registered in ‘next wave’ of FDI in areas such as Hengqing Island near Zhuhai
the zone. A joint venture between Hong Kong and Mainland and Nansha Port near Guangzhou, and if successful may eventu-
China, and supported by the State Council, the Qianhai Zone ally be instituted nationwide.
is designed as an experimental business zone for better interac-
tion between the two jurisdictions’ financial, logistics, and IT
services sectors. It covers slightly less than 20 square kilometers
on the western side of Shenzhen, and is expected to achieve a
GDP of RMB150 billion by 2020.
Among its many goals, the Qianhai Zone will serve as a pilot
area for the liberalization of China’s financial sector as a whole,
including preferential policies such as:
• Allowing the Qianhai Zone to explore the expansion of
offshore RMB flow-back channels, and establish an inno-
vative experimental zone for cross-border RMB transac-
tions;
• Supporting the granting of RMB loans for offshore proj-
ects by banking institutions established in Qianhai;
• Under the CEPA framework, conducting studies on the
granting of RMB loans by Hong Kong-based banking
institutions for enterprises and projects established in
Qianhai;
• Supporting qualified enterprises and financial institutions
registered in Qianhai to issue RMB bonds in Hong Kong
within the quotas approved by the State Council to sup-
port the development of Qianhai;
• Supporting the innovative development of foreign-invest-
ed equity investment funds, and actively exploring new
modes of foreign exchange settlements of capital funds,
investments and fund management; and
• Supporting the establishment of international or national
management headquarters or business operation head-
quarters by Hong Kong and other onshore and offshore
financial institutions.
Qualifying enterprises will be entitled to a reduced corpo-
rate income tax rate of 15 percent, and to increase investor con-
fidence in the area, the government has stated plans to explore
the establishment of branches of Hong Kong arbitration institu-
tions in Qianhai. To attract foreign talent, especially financial
sector employees from Hong Kong, the zone offers a special 15
percent salary tax rate for foreign nationals living or working in
Qianhai. In April 2013 the municipal government announced
four industries–finance, modern logistics, information services,
and related industries operating within the zone–that are eli-
gible for special funding.
Identified as “an area for spearheading industrial restructuring
in the Pearl River Delta region,” the Qianhai Zone provides in-
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