Pilot Free Trade Zone

The Pilot Free Trade Zone (PFTZ) is a special policy experimental area that has been approved by the Chinese government. Its purpose is to create a more internationalized and standardized business environment by leveraging customs special supervision areas. Companies operating within the PFTZ enjoy various benefits such as increased convenience, flexibility, and other advantages. The PFTZ is a high-level platform that promotes openness to the outside world, and it maintains the highest level of openness nationwide. Over time, the restrictions on foreign investment access in the Special Administrative Measures for Foreign Investment Access to Pilot Free Trade Zones (Negative List) have been significantly reduced. In fact, the number of restricted items has decreased from 190 to 27 in the 2021 edition, resulting in zero restrictions for 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 to meet the operational needs of enterprises and non-residents in the PFTZ. It operates as a separate accounting unit within the PFTZ, independent of the existing traditional account system. The establishment of FT Accounts is an 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 the benefits of offshore financial policies to enterprises in the PFTZ, offering unique advantages in interest rates, exchange rates, facilitation, and policy prioritization. This creates more benefits, reduces costs, and provides greater convenience.

1. Exchange Rate Management Advantage: FT Accounts provide enterprises with exchange rate management advantages. For example, Chinese manufacturing companies registered in the PFTZ can use FT Accounts to convert RMB to required foreign currencies for overseas procurement, thus mitigating the risks associated with exchange rate fluctuations. This flexibility helps companies control costs and optimize financial planning.

2. Interest Rate Advantage: FT Accounts typically offer more competitive interest rates, which is a significant feature of the financial policies within the PFTZ. Enterprises can benefit from 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 instance, 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 the 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 through FT Accounts, improving fund utilization efficiency and reducing risks associated with multinational operations.

The Tianjin Municipal Bureau of Commerce has compiled the Compilation of Case Studies on Free Trade Accounts (FT Accounts), showcasing 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 approval of the State Council. It encompasses the airport area, spanning 43.1 sq. km, and the Tianjin Port Comprehensive Bonded Zone, covering 4 sq. km. The TJPFTZ is overseen by the Tianjin Port Free Trade Zone Administrative Committee. This zone has played an active role in promoting institutional innovation in various specialized industries and government services. It has focused on areas such as bonded maintenance, parallel imported cars, and cross-border e-commerce. These efforts have led to an improved business environment and enhanced competitiveness for enterprises in the zone.

TJPFTZ Policies and Measures

§ Policy support for bonded maintenance and remanufacturing business.

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.