Tax Advantages Offered to Companies in Shanghai’s Free Trade Zone

Tax Advantages Offered to Companies in Shanghai's Free Trade ZoneShanghai is planning to offer tax advantages to companies operating in their free trade zone as leaks of a potential reform and industrial policies have been floating around. The report given by an anonymous insider stated that the government is implementing preferential policies that is related to the taxation of assets in the free trade zone but did not give any more details.

By offering tax advantages the city hopes to attract more foreign and domestic companies to invest in the free trade zone and at the same time help reduce their cash flow burden. But the reports also stated that other officials have denied the rumors that are circulating that the free trade zone will feature a 15 percent corporate income tax rate rather than 25 percent rate for ordinary enterprises.

Also mainland firms are expecting to benefit from the construction and operation of the free trade zone saw their value increased in recent weeks due a leaked policy drafts and speculations coming from the inside that fully described the policy changes and industrial policies in the free trade zone, but these policies have yet to be formally committed or set a timeline.

The Central Government is planning allow the free trade zone to test the yuan convertibility and the liberalization of interest rate.

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