New incentives to boost Lingang development
A new round of incentives was unveiled on Friday to boost financial development in Lingang, a special area of the Shanghai free trade zone.
The new incentives, 50 in total, issued by the Lingang Special Area Administrative Committee, the Shanghai headquarters of the People’s Bank of China, Shanghai Banking and Insurance Regulatory Bureau, Shanghai Securities Regulatory Bureau and Shanghai Financial Regulatory Bureau, will support foreign-funded institutions and subsidiaries of Chinese banks or insurance companies to establish jointly controlled financial management companies in Lingang, and support foreign financial institutions to participate in the establishment and investment of financial management subsidiaries of commercial banks.
Part of the area’s effort to attract foreign investment to set up various institutions, the measures also support foreign investors to set up securities companies, fund management companies and futures companies in Lingang that are controlled or wholly owned by foreign investors.
The establishment of foreign-owned or controlled life insurance companies in Lingang will also gain support from the government. Overseas financial institutions are encouraged to invest in or establish pension management companies in the area.
Multinational companies are encouraged to set up global or regional capital management centers and other headquarters in the area, and participate in inter-bank foreign exchange market transactions upon approval, so as to make the area a cross-border capital flow and allocation center in the Asia Pacific region.
At the same time, overseas investment institutions are granted to launch and set up private funds in Lingang amid a test run of qualified foreign limited partnership and qualified domestic limited partnership.
On the other hand, institutional building is a must-have of the area. Hence, Lingang will establish the rule of law in its financial sector, promote the establishment of international commercial arbitration organizations, accelerate the agglomeration of international arbitration institutions, and create a diversified dispute resolution mechanism that links mediation, arbitration and litigation and supports the development of professional institutions.
Lingang will also implement cross-border financial taxation rules with international competitiveness, expand the scope of application of value-added tax for service exports, and study new taxation rules that adapt to the development of overseas investment and offshore business.
The area will also implement safe and orderly cross-border flow of Internet data, improve the cross-border flow of financial transaction data, and unblock channels for financial institutions to obtain overseas economic and financial information.
Lingang will also implement a cross-border financial management system with convenient receipt and payment of capital, which will include the establishment of an integrated local and foreign currency account system and the implementation of a more convenient cross-border fund management system, a multifunctional free trade account and the free inflow and outflow and free exchange of capital in the area.
The special account for foreign direct investment in yuan capital could be canceled in the future, upon the trial of cross-border capital pool integrating local and foreign currencies.
The encouragements also include support for domestic insurance institutions to cooperate with overseas institutions in the development of cross-border medical insurance products, the pilot of international medical insurance settlement, and access to international medical services.
