Pilot Free Trade Zone
The Pilot Free Trade Zone ('PFTZ') is a special policy experimental area approved by the Chinese government to cultivate a more internationalized and standardized business environment, leveraging customs special supervision areas. Through a series of exploratory regulatory measures, companies within the PFTZ enjoy more conveniences, flexibility, and other advantages. As a high-level platform for opening up to the outside world, the PFTZ has consistently maintained the highest level of openness nationwide. The restrictions on foreign investment access in the Special Administrative Measures for Foreign Investment Access to Pilot Free Trade Zones (Negative List) has been reduced from the initial 190 items to 27 items in the 2021 edition, achieving zero restrictions on manufacturing industries.
Free Trade Account
The Free Trade Account (FT Account) is a local and foreign currency account with unified rules, established by financial institutions based on the operational needs of enterprises and non-residents in the PFTZ. It operates within separate accounting units in the PFTZ and is independent of the existing traditional account system. The establishment of FT Accounts is an important innovative institutional arrangement aimed at exploring the convenience of investment and financing exchange, expanding the openness of the financial market, and preventing financial risks. FT Accounts bring benefits of offshore financial policies to enterprises in the PFTZ, with unique advantages in terms of interest rates, exchange rates, facilitation, and policy prioritization, creating more benefits, reducing costs, and providing greater convenience.
1. Exchange Rate Management Advantage: FT Accounts offer exchange rate management advantages to enterprises. For instance, Chinese manufacturing companies registered in the PFTZ can use FT Accounts to convert RMB to required foreign currencies for overseas procurement, mitigating risks from exchange rate fluctuations. This flexibility helps companies control costs and optimize financial planning.
2. Interest Rate Advantage: FT Accounts typically receive more competitive interest rates, a significant feature of the financial policies within the PFTZ. Enterprises can obtain higher deposit interest or lower loan rates through FT Accounts, reducing capital costs and improving capital efficiency.
3. Financial Policy Incentives: FT Accounts allow enterprises to fully enjoy offshore financial policy incentives in the PFTZ. For example, foreign investors establishing production bases in the PFTZ can repatriate overseas profits to the parent company through FT Accounts, benefiting from preferential tax policies and reducing the tax burden.
4. Flexible Fund Management: Enterprises can manage funds more flexibly through FT Accounts. For cross-border e-commerce companies, FT Accounts enable direct receipt of international customer payments for domestic operations and procurement, eliminating the need for frequent cross-border transfers and enhancing fund efficiency.
5. Convenient Trade Financing: Trading companies within the PFTZ can conveniently engage in trade financing through FT Accounts. For example, settling payments with overseas suppliers can be done directly using FT Accounts, reducing fees and time costs associated with multiple cross-border payments and facilitating smooth international trade.
6. Centralized Fund Management: Multinational enterprise groups can easily centralize fund allocation, improving fund utilization efficiency and reducing risks associated with multinational operations.
Tianjin Municipal Bureau of Commerce has compiled the Compilation of Case Studies on Free Trade Accounts (FT Accounts), showcasing these exemplary cases that demonstrate the advantages of FT accounts in supporting the development of the real economy.
China (Tianjin) Pilot Free Trade Zone
The China (Tianjin) Pilot Free Trade Zone ('TJPFTZ') was established in 2015 with the State Council's approval, and its jurisdiction includes the airport area (43.1 sq. km) and the Tianjin Port Comprehensive Bonded Zone (4 sq. km), overseen by the Tianjin Port Free Trade Zone Administrative Committee. TJPFTZ has actively promoted institutional innovation in specialized industries and government services, including bonded maintenance, parallel imported cars, and cross-border e-commerce, thereby improving the business environment and enhancing the competitiveness of enterprises.
TJPFTZ Policies and Measures
Tianjin Italian SME Industrial Park and TJPFTZ
Tianjin Italian SME Industrial Park is situated within TJPFTZ, enabling eligible enterprises to avail themselves of the aforementioned policies and measures.