China Tax/Business News Flash

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Mar 2013, Issue 8

Is it the time to consider investing in Qianhai and/or Hengqin?

In China’s 12th-Five Year Development Plan (2011-2015), three coastal areas in Guangdong province including Qianhai in Shenzhen, Hengqin in Zhuhai and Nansha in Guangzhou have been earmarked as the key strategic development areas in the Pearl River Delta of Southern China.

Further to the approval by the State Council of the overall plans for the three special zones in year 2011 and 2012, various governmental authorities both at the state and provincial levels have released series of policies supporting the development and opening of the zones. In particular, the reduced corporate income tax rate ("CIT") of 15% for qualified enterprises and the rebate of individual income tax for qualified talents make Qianhai and Hengqin more attractive to potential investors.

In Feb and Mar of 2013, China’s National Development and Reform Commission ("NDRC") approved the ("Qianhai Catalogue") and the ("Hengqin Catalogue") respectively. The Qianhai Catalogue which has recently been released and the Hengqin Catalogue which is expected to be announced shortly, separately set out the industry sectors that are allowed to arrange the establishment in Qianhai and Hengqin.

In this issue of News Flash, we would like to highlight the overview of the two Catalogues and share our observations and suggestions.

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