Starting its operations on the 12th of May, Tianjin Free Trade Zone was launched in the year 1991. One of the most successful free trade zones in China, the economy of Tianjin FTZ in China has recorded impressive gains over the years. In fact, on an average, the economy of this free trade zone has been recording successive growth rate of 30% over the last few years.
Tianjin FTZ in Chgina is home to some of the leading Fortune 500 companies. Research and development centers, logistics and manufacturing bases all have been set up here by the leading global companies, providing a big impetus to the growth of the Chinese economy.
The leading facilities that companies operating out of the Tianjin FTZ in China get are as mentioned:
Trading companies in the Tianjin FTZ in China are levied up to a maximum of 15% enterprise income tax rate. However, companies with more than a decade of operations at the Tianjin FTZ are provided with a tax holiday in the first year of profits and 10% flat income tax for the next two consecutive years.
Trading units within the Tianjin 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.
Irrespective of the nature of businesses and foreign trade handled by companies inside the Tianjin free trade zone, all are treated as exports and relevant benefits are accrued to them.
Trading companies do not have to pay any VAT while doing trade with each other and with import and export trade provided they have operations within the Tianjin 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 from the Tianjin FTZ in China.
Companies 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 with designs, raw materials and equipments.
Units in the Tianjin FTZ in China are allowed to purchase raw materials and semi-finished products made in China through domestic trade and processing inside the zone.
Processing units in the Chinese free trade zone of Tianjin 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 materials imported at the Tianjin FTZ in China are fully bonded. When its products are shipped across the country, tariffs will be imposed on the imported raw materials.
The warehousing units inside the Tianjin free trade zone can store all kinds of goods except those prohibited by the state. Imported goods into the domestic market can be stored here too.
Tianjin free trade zone has big ambitious plans ahead. It is expected that this FTZ is likely to quadruple its revenues in the next three years and coming close on the heels of expected slowdown in the Chinese economy, it indeed will be a great achievement.
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