Laws and Regulations

 

National

 

1. Interim Measures of the Customs of the People’s Republic of China for the Supervision of the Shanghai Eastern Hub International Business Cooperation Zone Released

[Keywords: Shanghai, Eastern hub, International business cooperation zone]

The General Administration of Customs (GAC) has recently issued the Interim Measures of the Customs of the People’s Republic of China for the Supervision of the Shanghai Eastern Hub International Business Cooperation Zone, in a move to support the high-quality development of the Shanghai Eastern Hub International Business Cooperation Zone. The document will come into effect upon the official commencement of operations under closed management in the zone’s pilot launch area.

Source: GAC

http://www.customs.gov.cn/customs/302249/302266/302267/6648416/index.html

2.China–Thailand Mutual Recognition of Authorized Economic Operators (AEO) Takes Effect on August 1

[Keywords: Thailand, AEO]

The GAC has recently issued the Notice on the Implementation of the China–Thailand Mutual Recognition Arrangement for Authorized Economic Operators (AEO). According to the notice, the Arrangement between the General Administration of Customs of the People’s Republic of China and the Customs Department of the Kingdom of Thailand on the Mutual Recognition of the Enterprise Credit Management System of China Customs and the Authorized Economic Operator System of Thailand Customs officially came into effect on August 1, 2025.

Source: Customs Release

3.STA Clarifies Tax Credit Policy for Foreign Investors Who Use Distributed Profits for Direct Investment

[Keywords: Foreign investors, Tax credit]

The State Taxation Administration (STA) has recently released the Announcement on Matters Concerning the Tax Credit Policy for Foreign Investors Who Use Distributed Profits for Direct Investment. The document clarifies that, when determining the amount of tax credit, foreign investors may choose to calculate based on 10% of the reinvested amount or a lower dividend withholding tax rate as stipulated in applicable tax treaties or arrangements. The announcement took effect on January 1, 2025.

Source: STA

https://fgk.chinatax.gov.cn/zcfgk/c100012/c5242127/content.html

 

Shanghai

1.Administrative Measures for Shanghai Eastern Hub International Business Cooperation Zone Take Effect on August 1

[Keywords: International business cooperation zone]

The Administrative Measures for the Shanghai Eastern Hub International Business Cooperation Zone have recently been released. According to the document, the Business Cooperation Zone is positioned as a new platform to facilitate international business exchanges, a new carrier to aggregate service resources, and a new node to advance the integrated development of the Yangtze River Delta region. The Zone aims to achieve five core functional goals: enabling smooth cross-border exchanges, fostering vibrant international business activities, concentrating innovation resources, building leading professional service capabilities, and providing well-developed supporting infrastructure. The document came into effect on August 1, 2025.

Source: Shanghai Municipal People’s Government

https://www.shanghai.gov.cn/nw12344/20250729/e4243036d9a84b2b83f7c4a8c84f937b.html

 

2.Shanghai Unveils 12 New Measures to Boost AI Development

[Keyword: AI]

 

The Shanghai Municipal Commission of Economy and Informatization recently released Several Measures to Further Expand the Application of Artificial Intelligence in Shanghai. The document outlines 12 targeted measures to accelerate the city’s AI growth. These include lowering the cost of intelligent computing power, expanding the application of large AI models, supporting the procurement of high-quality training data, and promoting breakthroughs in core technologies.

Source: Shanghai Municipal Commission of Economy and Informatization

 

Regulations Entering into Force

 

Q&A

 

At a recent press conference highlighting the achievements of China’s immigration management during the 14th Five-Year Plan period, a spokesperson for the National Immigration Administration (NIA) responded to a media inquiry

 ●Q

In recent years, as China continues to expand its opening-up, we have indeed seen a growing number of foreign friends coming to China to work, study, and live. Could you share what concrete measures and services the NIA has introduced to facilitate their entry and stay, and what results have been achieved?

 ●A

During the 14th Five-Year Plan period, the NIA has earnestly implemented the instructions and arrangements made by the CPC Central Committee and the State Council. In keeping with the broader trend of economic globalization, the NIA has actively supported multi-level and multi-sector exchanges and cooperation with the international community. In coordination with relevant authorities, we have rolled out a series of immigration entry-exit policies and measures to facilitate the entry and stay of foreign nationals in China. These efforts can be broadly summarized in three key areas:

First, a series of visa exemption policies has made it easier and faster for more foreign friends to come to China. To date, China has established mutual visa exemption agreements with 29 countries, and has granted unilateral visa-free entry to citizens of 46 countries. Additionally, citizens of 55 countries are eligible for the 240-hour visa-free transit policy. Regional visa-free arrangements are also in place, including visa-free entry to Hainan, visa exemption for tourist groups from ASEAN countries, and visa-free entry for cruise ship passengers. These measures have significantly facilitated inbound travel for tourism and business purposes.

Second, visa-on-arrival policies at ports of entry facilitate “fast-track” processing for urgent visits. For foreigners who need to come to China quickly for business, visits, or other activities but are unable to obtain a visa in advance from overseas embassies or consulates, China provides visa-on-arrival services at ports.

Currently, this service covers 99 open ports across 73 cities with heavy international air traffic and high volumes of foreign arrivals, effectively meeting the urgent entry needs of foreign visitors.

Third, stay and residence services ensure a “secure and comfortable” experience. For foreigners in China whose visa validity or visa-free stay periods do not meet their needs, convenient services for visa extensions, renewal, or replacement are provided nearby, allowing them to “travel with peace of mind”. In collaboration with relevant departments, continuous efforts are made to optimize and enhance the convenience of living services for foreigners in China, striving to make their travel and daily life more comfortable and hassle-free.

These policies and measures work in synergy to simplify entry procedures, reduce time and financial costs, and facilitate easier access for more foreign friends coming to China. Currently, visa-free entry has become the primary channel for foreigners traveling and conducting business in China. The most notable outcome has been the sustained growth in inbound tourism, fueling the global “China Travel” boom. Traveling, shopping, and dining in China have become the new international trends.

According to data from the Ministry of Culture and Tourism, China received 26.94 million foreign tourists in 2024, marking a year-on-year increase of 96%. The most profound significance lies in the closer exchanges and interactions between Chinese and foreign visitors, as an open, inclusive, prosperous, stable, and vibrant China is increasingly recognized and embraced by people around the world.

Source: State Council Information Office

http://www.scio.gov.cn/live/2025/36928/tw/

 

Expert Perspective

 

Study on Shareholder Qualification and Equity Transfer Issues in Foreign-funded Enterprises

By Cai Shuo, Xing Jingyu, and Tian Yaqi (Beijing Jincheng Tongda& Neal Law Firm)

 

[Continued from the Previous Issue]

II. Recognition of Shareholder Status for Chinese Partners with Zero Registered Equity

(2) Case Analysis

In Case No. (2023) Yue 0308 Xing Chu 3067, the court held that: “The articles of association filed in the plaintiff’s business registration documents since its establishment clearly stipulate the capital contribution methods of the Chinese and foreign investors. The board meeting records include the signature of the vice chairman appointed by the Chinese investor. The plaintiff also confirmed during the trial that a certain cooperative joint-stock company had exercised shareholder rights during the plaintiff’s operation, and there exists a shareholding dispute between the plaintiff and the cooperative joint-stock company. On this basis, the plaintiff’s unilateral application to remove the Chinese cooperative joint-stock company’s 0% registered equity and shareholder status through a business registration change lacks factual and legal basis. Therefore, the court does not accept the plaintiff’s claim.” The court’s recognition of shareholder status took into account formal requirements such as “business registration documents and board meeting records”, as well as substantive requirements, including “the exercise of shareholder rights by the shareholder in the company’s operations”.

Based on the above case, confirming shareholder status requires meeting certain formal and substantive criteria. Formally, the shareholder identity should be clearly documented in key records such as the cooperation agreement, articles of association, business registration, and capital verification reports. These documents not only serve as the foundation for recognizing shareholder status, but also constitute important legal grounds for protecting shareholders’ rights and interests. For instance, provisions in the cooperation agreement and articles of association specifying that other shareholders acknowledge the inclusion of the shareholder through contribution of unvalued assets as a condition of cooperation fall within the scope of internal corporate governance and should be recognized as valid agreements. Business registration plays a crucial role in this process by providing external public disclosure, thereby ensuring that third parties’ reliance on the registered equity structure is legally safeguarded.

In terms of the substantive element, emphasis is placed on the shareholder’s actual exercise of shareholder rights, which includes but is not limited to participating in major company decisions and enjoying profit distribution rights. This is typically evidenced by signatures and seals on formal documents such as board resolutions or articles of association, demonstrating that the shareholder or their appointed representative has actively engaged in the company’s day-to-day management activities.

[To be Continued]

 

One Week in Shanghai

 

Latest News

1.New Shanghai City Image Film Released for 2025

[Keywords: City image]

With 100 days to go before the opening of the 8th China International Import Expo, the Information Office of the Shanghai Municipal People’s Government unveiled the 2025 edition of the city image film — Shanghai New Moments.

 

Source: Shanghai Release

 

2.Shanghai Court Publishes Roster of Specially Invited Commercial Mediation Organizations

[Keywords: Commercial mediation]

 

Recently, the Shanghai High People’s Court and the Shanghai Judicial Bureau jointly released the Roster of Specially Invited Commercial Mediation Organizations of Shanghai Courts (July 2025). A total of 53 commercial mediation organizations, including the Shanghai Commercial Mediation Center, Shanghai International Commercial Mediation Center, and Shanghai Eastern International Commercial Mediation Court, have been included in the roster.

 

Source: Shanghai High Court

 

3.Appointment Service for Customs Passenger Inspection and Follow-up at Pudong Airport Launched

[Keywords: Customs passenger inspection, Follow-up processing]

 

To support 24-hour customs clearance services at Shanghai Pudong International Airport, Pudong Airport Customs, in collaboration with the Shanghai branch of China E-Port Data Center, has launched a passenger inspection appointment feature on the “Tongguanbao Integrated Service Platform”. Effective from August 1, the new function enables travelers to make appointments in advance for declarations at the airport’s outbound customs counters and for follow-up processing. 

 

Source:Shanghai Customs 12360 Hotline

 

Corporate Activities

 

1.Infineon Distribution Center (China) Commences Construction

[Keyword: Infineon]

Recently, the signing and groundbreaking ceremony for the Infineon Distribution Center (China) customized project was held within the Pudong Airport Comprehensive Bonded Zone. Spanning a construction area of 43,000 square meters, the center is positioned as one of Infineon’s three major global logistics hubs and currently stands as the largest single-building finished goods distribution center in Infineon’s worldwide network.

 

Source: Pudong Release

Culture & Art

1.2025 Shanghai Book Fair and “Reading China” Shanghai Week Set to Launch

[Keywords: Shanghai book fair]

The 2025 Shanghai Book Fair and “Reading China” Shanghai Week will be held from August 13 to 19. This year’s book fair will feature dual main venues at the Shanghai Exhibition Center and Shanghai Book City, enhancing service capacity and visitor experience. At the same time, the event will continue to support various district-level sub-venues as well as several distinguished bookstores, libraries, and other distinctive sites.

 

Source: Shanghai Release

2.2025 GAF Shanghai Illustration Art Fair About to Open Grandly 

[Keyword: Illustration]

The 2025 GAF Shanghai Illustration Art Fair will be held from August 8 to 10 at the Shanghai New International Expo Centre. Under the theme “Growing Light”, the festival features seven major sections, creatively blending light, texture, and space to deliver an immersive experience that cultivates an “artistic perception field”.

Source: GAF Shanghai Illustration Art Fair

 

3.2025 Shanghai Tourism Festival · Cruise Experience Week Kicks Off

[Keyword: Cruise]

The “Enjoy Shanghai · Cruise Experience Week” event, part of the 36th Shanghai Tourism Festival 2025, is in full swing from August 1 to 31. Concurrently, the “Fall in Love with Cruises · Embrace New Experiences at Sea” short video contest has also been launched.

 

Source: Baoshan Cultural Center