Situated to the east of Guangzhou city and spread over an area of 1.4 million square kilometers, Guangzhou FTZ in China provides for a number of benefits to the units. Came into vogue in May 1992, Guangzhou free trade zone is regarded as one with highly liberalized trade regimes in China. Guangzhou FTZ in China has seen an investment to the tune of nearly US $4,200 million and has 1000 companies from 15 nations operating from here.
Following are the guidelines framed for the trading companies to do business in the Guangzhou FTZ in China:
The companies registered in foreign lands have to form as independent legal entities and secure a license for doing trade, imports and exports here.
Irrespective of the nature of businesses and foreign trade handled by companies inside the Guangzhou FTZ, all are treated as exports and relevant benefits are accorded.
Trading companies at Guangzhou free trade zone do not have to pay any VAT while doing trade with each other and with import and export trade.
Trading units within the Guangzhou FTZ are allowed to retain in full their foreign exchanges and carry on with the settlement and sale of exchange in banks, within the guidelines of concerned regulatory authorities.
Units at the Guangzhou FTZ are allowed to purchase raw materials and semi-finished products made in China through domestic trade and processing inside the zone.
Companies operating at the Guangzhou FTZ are allowed to secure processing orders and enter into trade contracts with other units in the zone. They can also trade with companies outside the zone.
Trading companies are levied up to a maximum of 15% enterprise income tax rate. However, companies with more than a certain time of operations are provided with various forms of tax holidays.
Processing units in the Chinese free trade zone of Guangzhou FTZ may apply for permission to sell a part of their products inside the country after paying tariff and securing a license for imported materials.
The warehousing units inside the Guangzhou free trade zone in China can store all kinds of goods except those prohibited by the state. Imported goods into the domestic market can be stored here too.
Usual warehousing operations such as sorting, sub-packing, labeling, marking are allowed for the warehousing units at the free trade zone in Guangzhou that also boasts of 200 thousand square meters of commodity display center.
Domestic and international business organizations operating from the Guangzhou FTZ can display their import and export products and use the exhibition halls that are spread over a massive 110 thousand square meters.
As compared to many other free trade zones operating in China, the Guangzhou free trade zone offers a more relaxed and free ambiance for trade. It is one account of this reason, it has attracted a fair amount of interest and participation from global companies interested in using the free trade benefits, incentives and the huge market offered by China.
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