No.45

Regulations of Shanghai Municipality on Foreign Investment were adopted at the 25th Session of the Standing Committee of the 15th Shanghai Municipal People’s Congress on September 25, 2020, and are hereby promulgated. They shall be effective as of November 1, 2020.

The Standing Committee of Shanghai Municipal People’s Congress

September 25, 2020

Regulations of Shanghai Municipality on Foreign Investment

(Adopted at the 25th Session of the Standing Committee of the 15th Shanghai Municipal People’s Congress on September 25, 2020)

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Chapter I General Provisions

Article 1 With a view to advancing higher-standard opening up, promoting and stabilizing foreign investment, protecting the legitimate rights and interests of foreign investment, and accelerating the formation of a new pattern of all-round opening up, these Regulations are formulated in accordance with the Foreign Investment Law of the People’s Republic of China, the Implementation Regulations of the Foreign Investment Law of the People’s Republic of China and other relevant laws and administrative rules, and in the light of the actual circumstances of this Municipality.

Article 2 These Regulations shall apply to the foreign investment within the administrative area of this Municipality as well as to the promotion, protection, administration and service related to the foreign investment.

Article 3 The principles of marketization, rule of law, internationalization and facilitation shall be adopted in this Municipality to fully implement the national treatment to foreign investment, establish and improve the mechanism of promotion and protection of foreign investment, create a stable, transparent, predictable and fair market environment, and enhance the quality of opening up.

Article 4 The management system of Pre-establishment National Treatment plus Negative List for foreign investment access shall be fully implemented in this Municipality. In areas other than the negative list for foreign investment access, the people's governments at all levels of this Municipality and their departments shall not impose restrictions on foreign investment access.

This Municipality shall, in accordance with the provisions of the State, grant foreign investors and their investments no less favorable treatment than that accorded to domestic investors and their investments at the stages of establishment, operation and disposal under similar circumstances.

Article 5 The municipal and district people's governments shall strengthen the organization and leadership of foreign investment, make overall plans to promote it, formulate policies and measures for its promotion and facilitation, establish and improve the deliberation and coordination mechanism related to foreign investment, and promptly coordinate and solve fundamental problems in the work concerning foreign investment.

The municipal departments of commerce, development and reform shall, in accordance with the division of their functions and duties, be responsible for the promotion, protection, management and service of foreign investment while the other departments of this Municipality shall carry out the work related to the foreign investment within the scope of their respective authorities.

The department responsible for foreign investment of the district people's government (hereinafter referred to as the District Department of Commerce) and other relevant departments shall, according to their respective functions and duties, carry out the work of promotion, protection, management and service of foreign investment in the district.

Article 6 The municipal and district departments of commerce shall take the lead in coordinating cross-departmental and cross-regional issues raised by foreign investors and foreign-invested enterprises.

All relevant departments shall, according to their respective responsibilities, actively facilitate the solution and pass the results to the municipal and district departments of commerce.

The municipal and district departments of commerce shall pass the processed results to foreign investors and foreign-invested enterprises in a timely manner.

Article 7 Employees of foreign-invested enterprises shall establish a trade union, carry out trade union activities and safeguard their legitimate rights and interests according to the laws. Foreign-invested enterprises shall provide their trade unions with necessary conditions to carry out activities.

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Chapter II Expand the Opening-up

Article 8 This Municipality shall strengthen its function of an open hub and portal, and shall, in accordance with the national overall plan for opening up, implement the prevailing rules for high - standard international investment and trade, advance the goods and elements flow-based opening up to institutional opening up based on rules, regulations, management and standards, and promote all-round high standard opening up at a deeper level, in a wider range and with greater efforts.

Article 9 This Municipality shall, in accordance with the National opening up plan of the service industry, promote the financial field such as banking, securities, insurance, futures, trust investment, assets management and credit rating to take the lead in opening up, advance expansion of opening up in such areas as telecom, Internet, healthcare, transportation, culture, education and other fields in an orderly manner, and take the initiative to strive for early and pilot implementation of wider opening up policies of other national service industries in this Municipality.

Article 10 China (Shanghai) Pilot Free Trade Zone (hereinafter referred to as the Pilot Free Trade Zone) should play a role of opening wider to the outside world as an experimental field, and increase the intensity of opening up, align to the highest standards and best level, and in accordance with the national deployment of foreign-invested experimental policies and measures, undertake the pressure test for opening up, and accumulate the experiences that can be copied and popularized.

The relevant experimental policies and measures for foreign investment may be applied in a larger geographical scope outside the Pilot Free Trade Zone, except for those explicitly defined by the State to be exclusively applied to the Pilot Free Trade Zone.

Article 11 The Lingang Special Area of the China (Shanghai) Pilot Free Trade Zone (hereinafter referred to as Lingang Special Area) shall focus on the key fields that conform to the national strategy, with great demands from international market and urgent requirement for opening up, carry out differential exploration, implement more open policy and system for liberalization and facilitation of foreign investment, facilitate the realization of convenient investment and operation, free entry and exit of goods, easy capital flow, highly opened transport, free practice of people, quick connectivity of information, and shall, in accordance with the state regulations, implement the internationally competitive taxation system and policy, build up a special functional economic area with the international market influence and competitiveness.

Article 12 This Municipality shall, in accordance with the national strategy for regional integration development of the Yangtze River Delta (hereinafter referred to as the Yangtze River Delta) and relying on the regional cooperation mechanism of the Yangtze River Delta, coordinate to promote the opening up of key areas and continuously improve the overall level of high-quality opening up of the Yangtze River Delta Region. With the focus on the construction of demonstration zones for ecological and green integrated development in the Yangtze River Delta, and with such construction as a platform, we shall explore and formulate the institutional advantages of innovative development, enhance the interconnected effects of opening up, and guide the rational deployment of foreign-invested industries. We shall promote the improvement of a unified catalogue of government-approved investment projects for ecological and green integrated development in the Yangtze River Delta, and file the foreign investment projects outside the catalogue.

We shall promote the unification of criteria, procedures and modes for registration of foreign-invested enterprises, establish a unified system of mutual recognition and service of work permits for high-level foreign talents.

We shall further strengthen the international connectivity function of Hongqiao Business District, focus on the development of modern service industry, deepen the coordination and linkage with the Yangtze River Delta, and build up the Hongqiao International Open Hub.

Article 13 Relevant municipal departments shall give full play to the spillover effect of China International Import Expo (hereinafter referred to as the Import Expo) on expansion of the opening up, promote the function of the Import Expo as platforms for international procurement, investment promotion, cultural exchange, opening up and cooperation, strengthen docking services for the import expo exhibitors, plan and carry out activities associated with trade and investment, facilitate coordination linkage of the Import Expo with investment promotion activities.

Article 14 Where the expansion of the opening fields requires legislative protection at the state level, this Municipality shall strengthen communication with the relevant state departments, and propose to adjust the application of the relevant laws, administrative rules, decisions of the State Council and departmental rules.

Where the applicability of provisions relating to foreign investment has been adjusted by laws, administrative rules and resolutions of the State Council,and except for the situations where the relevant administrative procedures are simultaneously and explicitly stipulated to be formulated and adjusted by relevant state department, this Municipality shall implement the above provisions immediately.

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Chapter II I Investment Promotion

Article 15 The municipal and district people's governments shall establish and improve a foreign investment promotion service system that is led by the government and jointly participated by professional organizations, chambers of commerce, associations and enterprises so as to provide all-round and precise investment promotion services to foreign investors and foreign-invested enterprises.

Article 16 This Municipality shall establish a unified foreign investment promotion service platform, assemble relevant laws, rules, regulations, normative documents, policies and measures for foreign investment, release industry trends and investment promotion project information, etc., and provide investment information, project matching, investment connection and other services through online and offline inter-activities.

The foreign investment promotion platform shall gradually provide the information service in multiple languages.

Article 17 The municipal and district people's governments and relevant departments shall carry out various forms of investment promotion activities such as metropolis promotion, regional promotion, special topic promotion and centralized contract signing.

The municipal foreign investment promotion agency shall publicize the investment environment in Shanghai, carry out investment promotion activities, provide business advisory opinions to foreign investors and foreign-invested enterprises, guide the investment promotion agencies established in various districts, the Pilot Free Trade Zone, Lingang Special Area, national and municipal development zones, Hongqiao Business District to engage in foreign investment promotion.

We shall support various investment promotion agencies in carrying out investment promotion activities at home and abroad, push forward the linkage of investment promotion with large-scale international events such as exhibitions, activities in culture, science and technology, sports and tourism , expand channels for attracting investment, and elevate the quality of the investment attracted.

The municipal department of commerce shall, jointly with the municipal foreign affairs department, make overall plans, provide guidance and services for the foreign investment promotion activities carried out by this Municipality outside China.

Article 18 This Municipality shall strengthen exchanges and cooperation,in the fields of investment and trade,with international sister cities, friendly organizations and other cities and regions outside China.

The municipal department of commerce and municipal foreign investment promotion agencies shall strengthen their contacts with overseas investment promotion agencies stationed in Shanghai, establish investment cooperative relations, set up investment promotion agencies outside China according to actual needs, and perfect overseas investment promotion networks.

The investment promotion agencies established overseas by this Municipality shall strengthen the connection with the relevant department of this Municipality and districts, and with the parks and zones, promote the linkage with overseas offices established by enterprises in this Municipality, so as to make joint contribution to attract projects and conduct other services.

Article 19 The municipal department of commerce shall, jointly with other relevant departments, regularly compile guidelines such as the guidance book for foreign investment and white papers on foreign investment environment, publish them in both Chinese and English and update them in a timely manner.

The district department of commerce shall, in the light of the actual circumstances, draw up guidelines for foreign investment in the district.

The guidelines for foreign investment shall include the introduction of basic economic and social conditions, investment environment of key regions, advantageous fields, etc., and other contents such as the services guidance for foreign investment, information on investment promotion projects and relevant data.

Article 20 Foreign investors are encouraged and guided to make investment in the projects listed in the Catalogue of Industries Encouraging Foreign Investment of the State as well as in the key development areas of this Municipality.

Foreign investors who invest in the projects listed in the Catalogue of Industries Encouraging Foreign Investment may enjoy preferential policies such as tax and land use in accordance with regulations.

Procedures for the confirmation of encouraged foreign investment projects shall be handled through the online investment project examination and approval platform.

Where a foreign investor invests in a project within the key development areas of this Municipality or district, the municipal or district people's government may, within the scope of its authority, formulate such incentive measures as reducing or exempting relevant fees and assuring land use quota.

Article 21 This Municipality shall build a high-level platform for headquarters economy, encourage foreign investors to set up regional headquarters and various functional institutions of transnational corporations in this Municipality, and support them to aggregate business, expand functions and be upgraded to Asia-pacific headquarters and global headquarters.

Headquarters of multinational corporations and their functional institutions that are stationed in Shanghai can enjoy funding support and conveniences in personnel entry and exit, talent introduction, capital settlement, trade logistics, goods clearance and other facilitation policies.

The municipal department of commerce shall, together with relevant departments, continuously formulate innovative policies and measures, and undertake the work such as introduction and recognition of the regional headquarters and various functional institutions of the multinational corporations and provide service for them.

This Municipality shall encourage foreign investors to set up investment companies in this Municipality, support investment companies to carry out investment activities in accordance with the law, and provide convenience for their equity transaction and capital inflow and outflow.

Article 22 Foreign investors are encouraged to set up foreign-funded R&D centers in this Municipality and upgrade them to global R&D centers. Foreign-funded R&D centers shall be accredited by the municipal department of commerce. The municipal departments of commerce, science and technology, development and reform shall strengthen services and provide convenience for the accredited foreign-funded R&D centers in participating in government research projects, industrialization of R&D achievements, international and domestic patent applications, import of R&D supplies and other aspects.

Foreign investors are encouraged to set up an open innovation platform in this Municipality to aggregate resources such as advanced technology, experts, capital, achievements and experimental facilities. This Municipality shall promote the interconnection between small and medium-sized enterprises, innovation teams and multinational companies and lift the level of innovation.

Article 23 This Municipality encourages financial institutions in Shanghai to provide multi-channel financing for foreign-invested enterprises.

Foreign-invested enterprises may, in accordance with the law, get loans from banks, and raise funds through public issuance of stocks, corporate bonds and other securities within or outside of China, public or private issuance of other financing instruments and borrowing foreign debts.

Financial institutions in this Municipality shall, in accordance with the national cross-border financing management policies, provide convenience for foreign-invested enterprises to carry out cross-border financing in local and foreign currencies.

Article 24 Foreign invested enterprises are encourage