Regulations on Foreign Investment of Shanghai Municipality
(Adopted at the 25th Meeting of the Standing Committee of the 15th Shanghai Municipal People’s Congress on September 25, 2020)
Article 1In order to further promote higher-level opening-up in this municipality, encourage and stabilize foreign investment, protect the legitimate rights and interests of foreign investors, and accelerate the formation of a new pattern of comprehensive opening-up, these Regulations are formulated based on the Foreign Investment Law of the People’s Republic of China, the Implementing Regulations of the Foreign Investment Law of the People’s Republic of China, and other relevant laws and administrative regulations, combined with the actual conditions of this municipality.
Article 2These Regulations apply to foreign investment within the administrative area of this municipality, as well as to related work concerning its promotion, protection, management, and services.
Article 3This municipality adheres to the principles of marketization, rule of law, internationalization, and facilitation, fully implements national treatment for foreign investment, establishes and improves mechanisms for promoting and protecting foreign investment, fosters a stable, transparent, predictable, and fair competitive market environment, and enhances the level of opening-up.
Article 4This municipality fully implements the pre-establishment national treatment plus negative list regime for foreign investment. In areas not included in the Negative List for Foreign Investment Access, governments at all levels and their departments shall not impose any access restrictions on foreign investment.
In accordance with state provisions, this municipality grants foreign investors and their investments treatment no less favorable than that accorded to domestic investors and their investments under similar circumstances throughout all stages—establishment, operation, and liquidation.
Article 5The municipal and district people’s governments shall strengthen organizational leadership and overall coordination of foreign investment work, formulate policies and measures to promote and facilitate foreign investment, establish and improve consultation and coordination mechanisms related to foreign investment, and promptly coordinate and resolve major issues arising in this field.
The municipal commerce and development and reform departments, according to their respective responsibilities, are responsible for promoting, protecting, managing, and servicing foreign investment; other relevant municipal departments shall carry out foreign-investment-related work within their respective scopes of responsibility.
The departments responsible for foreign investment in the district people’s governments (hereinafter referred to as district commerce departments) and other relevant departments shall, in accordance with their assigned duties, promote, protect, manage, and service foreign investment within their respective districts.
Article 6The municipal and district commerce departments shall take the lead in coordinating cross-departmental and cross-regional issues raised by foreign investors and foreign-invested enterprises. Relevant departments shall actively address these issues in accordance with their respective responsibilities and promptly report the outcomes to the municipal and district commerce departments. The municipal and district commerce departments shall, in turn, promptly inform the foreign investors and foreign-invested enterprises of the resolution results.
Article 7Employees of foreign-invested enterprises may, in accordance with the law, establish trade unions, conduct union activities, and safeguard their legitimate rights and interests. Foreign-invested enterprises shall provide necessary working conditions for their internal trade unions.
Article 8This municipality strengthens its role as an open hub and gateway, implements high-standard international rules governing investment and trade in line with the national strategy for opening-up, and promotes a transition from openness based on the flow of goods and factors of production to institutional openness encompassing rules, regulations, management, and standards. It will advance comprehensive, high-level opening-up across broader fields and at greater depth and intensity.
Article 9In accordance with the state’s deployment regarding opening-up in the service sector, this municipality will prioritize the early opening of financial sectors such as banking, securities, insurance, futures, trust investment, asset management, and credit rating. It will also orderly expand opening-up in telecommunications, internet, healthcare, transportation, culture, education, and other fields, and proactively seek to pilot additional national policies for expanding service-sector opening-up within its jurisdiction.
Article 10The China (Shanghai) Pilot Free Trade Zone (hereinafter referred to as the Free Trade Zone) shall serve as a testing ground for expanding opening-up, intensifying outward engagement, benchmarking against the highest standards and best practices, implementing experimental policies and measures for foreign investment as directed by the state, undertaking stress tests for opening-up, and accumulating replicable and scalable experience.
Certain experimental policies and measures pertaining to foreign investment may be applied by this municipality across wider geographical areas beyond the Free Trade Zone, except those explicitly designated by the state for application solely within the Free Trade Zone.
Article 11The Lingang New Area of the China (Shanghai) Pilot Free Trade Zone (hereinafter referred to as the Lingang New Area) shall select key sectors aligned with national strategies, meeting strong international market demand, and requiring high levels of openness. It will undertake differentiated explorations, implement more liberal policies and systems facilitating foreign investment, and strive to achieve streamlined investment and business operations, free movement of goods, convenient capital flows, highly open transportation, freedom of professional practice, rapid information connectivity, and internationally competitive tax regimes and policies as prescribed by the state, thereby creating a special economic zone with enhanced international influence and competitiveness.
Article 12In accordance with the national strategy for integrated development of the Yangtze River Delta region (hereinafter referred to as the Yangtze River Delta), this municipality, leveraging the regional cooperation mechanism, will collaboratively advance opening-up in key sectors and continuously elevate the overall quality of the Yangtze River Delta’s outward engagement. Focusing on the construction and platform of the Yangtze River Delta Ecological and Green Integrated Development Demonstration Zone, it will explore establishing institutional advantages for innovative development, enhance synergistic effects of opening-up, and guide rational industrial layout for foreign investment. It will promote the refinement of a unified catalog of government-approved investment projects within the Yangtze River Delta Ecological and Green Integrated Development Demonstration Zone, subjecting foreign investment projects outside this catalog to a filing system. It will standardize registration criteria, procedures, and modes for foreign-invested enterprises, and establish a unified mutual recognition and service system for work permits for high-caliber foreign talent.
Furthermore, it will strengthen Hongqiao Business District’s international connectivity functions, focus on developing modern service industries, deepen synergy with the Yangtze River Delta, and build Hongqiao into an international open hub.
Article 13Relevant municipal departments shall fully leverage the spillover effects of the China International Import Expo (hereinafter referred to as the Import Expo) on expanding opening-up, utilizing the Expo as an international procurement platform, an investment promotion platform, a platform for cultural exchange, and a platform for open cooperation. They will strengthen services connecting exhibitors at the Import Expo, plan and carry out trade and investment support activities, and promote coordinated linkage between the Import Expo and investment promotion initiatives.
Article 14For areas requiring legislative safeguards at the national level to expand opening-up, this municipality shall intensify communication with relevant national authorities and propose adjustments to applicable laws, administrative regulations, State Council decisions, and departmental rules.
Where laws, administrative regulations, or State Council decisions have already been adjusted to accommodate provisions related to foreign investment, unless expressly stipulated that relevant management measures must be formulated or revised by national authorities, this municipality shall promptly implement them.
Article 15The municipal and district people’s governments shall establish and improve a government-led investment promotion service system, with participation from professional institutions, chambers of commerce, associations, and enterprises, to provide foreign investors and foreign-invested enterprises with comprehensive and precise investment promotion services.
Article 16This municipality has established a unified investment promotion service platform, consolidating relevant laws, regulations, rules, normative documents, and policy measures related to foreign investment, publishing industry updates and information on investment promotion projects, and providing online and offline services such as investment information, project matching, and investment matchmaking.
The investment promotion service platform shall gradually expand multilingual information services.
Article 17The municipal and district people’s governments and relevant departments shall organize various forms of investment promotion activities, including city promotions, regional promotions, thematic promotions, and centralized signing ceremonies.
The municipal investment promotion agency shall publicize Shanghai’s investment environment, conduct investment promotion activities, accept business inquiries from foreign investors and foreign-invested enterprises, and guide district offices, the Free Trade Zone, the Lingang New Area, national and municipal development zones, and the Hongqiao Business District—each of which has established its own investment promotion agencies—in carrying out foreign investment promotion work.
Support shall be provided for various investment promotion agencies to conduct activities both domestically and abroad, linking investment promotion with large-scale international events such as expos, cultural festivals, science and technology forums, sporting events, and tourism, broadening channels for attracting investment, and enhancing its quality.
The municipal commerce department, in coordination with the municipal foreign affairs department, shall centrally manage, guide, and provide services for the municipality’s overseas investment promotion activities.
Article 18This municipality will strengthen exchanges and cooperation with international sister cities, friendly organizations, and other overseas cities and regions in the fields of investment and trade.
The municipal commerce department, municipal investment promotion agencies, and others shall intensify contact with overseas investment promotion agencies stationed in Shanghai, establish cooperative relationships for investment promotion, and, as needed, set up investment promotion offices abroad to help improve the overseas investment promotion network.
Investment promotion offices established by this municipality overseas shall strengthen coordination with municipal and district departments as well as industrial parks, collaborate closely with the municipality’s overseas representative offices, and jointly handle tasks such as project attraction.
Article 19The municipal commerce department, in conjunction with relevant departments, shall regularly compile guidance materials such as the Foreign Investment Guide and White Paper on the Investment Environment, publish them in languages including Chinese and English, and update them promptly. District commerce departments shall, based on local conditions, prepare their own district-level foreign investment guides.
Foreign investment guides shall include basic socioeconomic information about the region, introductions to key areas and advantageous sectors, practical guidance on conducting foreign investment, information on investment promotion projects, and relevant data.
Article 20Foreign investors are encouraged and guided to invest within the scope of the National Catalogue of Industries Encouraged for Foreign Investment and the municipality’s priority development areas.
Investments in projects listed in the National Catalogue of Industries Encouraged for Foreign Investment shall, in accordance with regulations, enjoy preferential policies such as tax reductions and land-use incentives. Confirmation procedures for encouraged foreign investment projects shall be handled through the online approval and supervision platform for investment projects.
For foreign investor projects located within the municipality’s or districts’ priority development areas, the municipal or district people’s governments may, within their statutory authority, introduce incentive measures such as fee reductions or guarantees of land-use quotas.
Article 21This municipality is building a high-level headquarters economy platform, encouraging foreign investors to establish regional headquarters of multinational corporations and various functional entities in the city, supporting their aggregation of business activities, expansion of functions, and upgrading to Asia-Pacific or global headquarters. Regional headquarters and functional entities of multinational corporations based in Shanghai may enjoy funding support and facilitation policies regarding personnel entry and exit, talent recruitment, fund settlement, trade logistics, and customs clearance of goods.
The municipal commerce department, together with relevant departments, shall continuously innovate policy measures to attract, recognize, and provide services for regional headquarters of multinational corporations and various functional entities.
This municipality encourages foreign investors to establish investment companies within its territory, supports these companies in legally engaging in investment activities, and provides conveniences for equity transactions and capital flows.
Article 22Foreign investors are encouraged to establish foreign-funded R&D centers in this municipality and upgrade them into global R&D centers. Such centers shall be recognized by the municipal commerce department. The municipal commerce, science and technology, and development and reform departments shall strengthen services and provide conveniences for recognized foreign-funded R&D centers in participating in government research projects, commercializing research findings, filing domestic and international patents, and importing research supplies.
Foreign investors are encouraged to establish open innovation platforms in this municipality, pooling advanced technologies, experts, funds, research outcomes, and laboratory facilities to connect small and medium-sized enterprises and innovation teams with multinational corporations and elevate overall innovation levels.
Article 23This municipality encourages financial institutions operating in Shanghai to provide multi-channel financing options for foreign-invested enterprises. Foreign-invested enterprises may legally obtain bank loans, issue stocks or corporate bonds domestically or abroad, or raise funds through other publicly or privately issued instruments, or even borrow foreign debt.
In accordance with the state’s cross-border financing management policies, financial institutions in this municipality shall provide appropriate conveniences for foreign-invested enterprises engaging in cross-border financing in both domestic and foreign currencies.
Article 24Foreign-invested enterprises are encouraged to reinvest domestically.
When foreign investors use their investment income earned in China to expand their investments within the country, they may, in accordance with the law, enjoy preferential treatment such as exemption from withholding income tax on reinvested corporate profits.
Article 25Within their statutory authority, district people’s governments may formulate investment promotion incentive measures, rewarding foreign-invested enterprises that make outstanding contributions to the local economy and society, as well as institutions and individuals that have made significant contributions to promoting foreign investment.
Article 26Policies implemented by the municipal and district people’s governments and relevant departments—such as government funding arrangements, land supply, tax exemptions, qualification licensing, standard-setting, project applications, title evaluations, and human resource support aimed at fostering enterprise development—shall treat foreign-invested enterprises equally under the law.
Foreign-invested enterprises may participate equally in government procurement, bidding, land transfers, property transactions, and other activities through the municipality’s public resource trading platform, in accordance with the law.
Article 27This municipality does not levy taxes on foreign investors’ investments. In exceptional cases, when taxation of foreign investors’ assets becomes necessary for the public interest, such actions shall strictly adhere to legal procedures, be conducted in a non-discriminatory manner, and provide timely compensation based on the market value of the taxed assets.
To respond to emergencies such as natural disasters or public health incidents, the municipal and district people’s governments and their relevant departments may, in accordance with the law, requisition property from foreign-invested enterprises, or require those producing essential supplies and emergency rescue materials to ramp up production and ensure adequate provision. Requisitioned property shall be promptly returned upon completion of use or conclusion of emergency response efforts. If property of foreign-invested enterprises is damaged or lost during requisition, appropriate compensation shall be provided in accordance with the law.
Article 28Contributions, profits, capital gains, proceeds from asset disposal, royalties from intellectual property licenses, legally obtained compensation or damages, and liquidation proceeds earned by foreign investors within China may be freely remitted in or out of the country in either Renminbi or foreign currency. Salaries and other lawful income of foreign employees, as well as employees from Hong Kong, Macao, and Taiwan, may also be freely remitted abroad. No organization or individual shall unlawfully impose restrictions on currency types, amounts, or frequencies of remittances.
Banks and financial institutions in this municipality are encouraged to increase their application of financial technology, providing foreign-invested enterprises with convenience in foreign exchange transactions and electronic settlement services, and exploring measures to facilitate salary remittances for foreign and Hong Kong, Macao, and Taiwan employees.
Article 29This municipality strictly protects the intellectual property rights of foreign investors and foreign-invested enterprises in accordance with the law, promotes the establishment of a rapid inter-regional and inter-departmental collaborative protection mechanism for intellectual property, continuously improves the judicial and administrative enforcement system for intellectual property protection, and punishes acts infringing upon the intellectual property rights of foreign investors and foreign-invested enterprises.
People’s courts at all levels in this municipality shall promptly accept and review applications for evidence preservation and behavioral preservation involving intellectual property disputes of foreign investors and foreign-invested enterprises, render judgments swiftly, and enforce rulings immediately. For repeat offenses, malicious infringements, and other serious violations, punitive damages and other disciplinary measures shall be applied in accordance with the law. Appropriate legal guidance shall be issued in due course, and typical cases of judicial protection of intellectual property in both Chinese and English shall be published.
Article 30Relevant municipal departments shall establish and improve internal management systems, taking effective measures to protect trade secrets of foreign investors and foreign-invested enterprises learned during the performance of their duties. When sharing information with other departments becomes necessary, confidential handling of any contained trade secrets shall be ensured to prevent leaks.
People’s courts at all levels in this municipality shall strengthen judicial protection of trade secrets, applying evidentiary rules appropriately to reduce the burden of rights holders seeking redress.
Article 31This municipality encourages and legally guarantees voluntary technical cooperation between foreign investors, foreign-invested enterprises, and various local market players and research entities, based on principles of voluntariness and commercial rules.
Article 32This municipality ensures the fair participation of foreign-invested enterprises in government procurement.
In releasing government procurement information, determining supplier qualifications, and setting evaluation standards, this municipality shall not discriminate against foreign-invested enterprises, nor shall it impose restrictions on suppliers’ ownership structures, organizational forms, shareholding compositions, or nationalities of investors, or differentiate products or services provided by foreign-invested enterprises compared to domestic counterparts.
Article 33When formulating local regulations, rules, or normative documents related to foreign investment, drafting departments shall extensively solicit opinions and suggestions from foreign-invested enterprises and relevant chambers of commerce and associations.
Normative documents involving foreign investment shall undergo legality reviews as prescribed; without a legal or administrative basis, they shall not diminish the legitimate rights or increase the obligations of foreign-invested enterprises.
Normative documents and policy measures closely related to the production and business activities of foreign-invested enterprises shall allow for necessary adaptation periods before implementation, except where state regulations specify immediate enforcement or failure to do so would hinder execution.
Authorities issuing local regulations, rules, or normative documents closely linked to foreign investment shall interpret them in easily understandable language, provide corresponding English translations or summaries, and offer multilingual versions or abstracts as needed.
Article 34Within their statutory authority, the municipal and district people’s governments and relevant departments shall strictly honor written policy commitments and various contracts entered into with foreign investors and foreign-invested enterprises, and shall not breach agreements citing administrative boundary adjustments, government reshuffles, institutional or functional reorganizations, or changes in responsible personnel.
If municipal or district governments and relevant departments fail to fulfill commitments or contracts due to exceeding their statutory authority, they shall bear legal responsibility accordingly.
Article 35This municipality ensures that foreign-invested enterprises participate equally in the formulation and revision of local standards. For standards closely related to the production and business activities of foreign-invested enterprises, their opinions shall be fully solicited, and drafts of the standards shall be provided in English or summary form. Foreign-invested enterprises may recommend representatives to join relevant municipal specialized standardization technical committees. Representatives of foreign-invested enterprises are encouraged to participate in national specialized standardization technical committees. Market regulation departments and relevant authorities shall publicly disclose the entire process of local standard formulation and revision, providing convenience and guidance for foreign-invested enterprises to engage in drafting, translating, and internationalizing local standards.
Standards and guiding technical documents for local standards shall not be exploited to obstruct the fair competition of foreign-invested enterprises.
Article 36Foreign-invested enterprises may, in accordance with the law, engage in franchised operations for municipal water supply, gas supply, sewage treatment, waste disposal, as well as urban roads, highways, urban rail transit, and other public transportation infrastructure construction and operation projects.
The municipality’s franchising policies in the urban infrastructure sector apply equally to foreign-invested enterprises.
Article 37If foreign-invested enterprises or their investors believe that administrative actions by government organs and staff infringe upon their legitimate rights and interests, they may lodge complaints with the municipal commerce department, designated foreign investment departments or agencies of the district people’s governments (hereinafter referred to as complaint-handling agencies). Complaint-handling agencies shall address complainants’ concerns in accordance with the principle of tiered responsibility, collaborating with relevant departments.
The municipal commerce department, in collaboration with relevant departments, shall establish a joint conference system for handling complaints from foreign-invested enterprises, coordinating and promoting city-level complaint-handling efforts, and guiding and supervising district-level complaint-handling work. The municipal commerce department shall refine complaint-handling rules, standardize complaint procedures, clarify time limits for resolving complaints, and make these publicly available.
Article 38Leveraging its diversified dispute-resolution platform, this municipality establishes and improves a mechanism integrating mediation, commercial arbitration, administrative adjudication, administrative reconsideration, and litigation, ensuring organic connection and mutual coordination among these methods, thereby providing foreign-invested enterprises with efficient and convenient avenues for dispute resolution.
This municipality encourages and supports legally established arbitration institutions to explore institutional innovations, drawing on legal and regulatory frameworks as well as international commercial arbitration practices, refining arbitration rules suitable for foreign investment, elevating the internationalization of commercial dispute arbitration, respecting parties’ autonomy of will, allowing parties to choose applicable arbitration procedures and legal rules, and providing independent, impartial, professional, and efficient arbitration services.
Major, complex, and difficult administrative reconsideration cases involving foreign investment shall be deliberated by administrative reconsideration committees, with non-permanent members or experts familiar with international trade and investment rules invited to participate.
In accordance with the national unified deployment, efforts shall be intensified to establish international commercial trial organizations, innovate international commercial trial operating mechanisms, and accelerate the formation of trial systems adapted to meet Shanghai’s needs for resolving international commercial disputes.
Article 39Foreign-invested enterprises may, in accordance with the law, establish chambers of commerce or associations, and decide independently whether to join or withdraw, except where laws or regulations stipulate otherwise.
This municipality supports chambers of commerce and associations in promptly reflecting members’ demands, providing information consulting, training, market expansion, trade and economic exchanges, rights protection, and dispute resolution services, in accordance with laws, regulations, rules, and charters.
Article 40When foreign investors invest in sectors restricted by special management measures (negative list) for foreign investment access, they shall comply with requirements for shareholding, senior management, and other special controls, and shall not invest in prohibited areas. Outside the scope of the negative list, management shall be implemented consistently for both domestic and foreign investors.
During procedures such as enterprise registration, project approval or filing, and industry licensing, the municipal market regulation, development and reform, and other industry supervisory authorities shall fulfill their negative-list review responsibilities, provide relevant consultations to foreign investors and foreign-invested enterprises, and strengthen cross-departmental information sharing. For cases approved by other departments, relevant departments shall simplify the negative-list review process.
Article 41When applying for establishment or change of registration of a foreign-invested enterprise, applicants shall commit to complying with negative-list requirements and attest that submitted articles of association, agreements, resolutions, and proof of qualifications are genuine, legal, and valid. Market regulation departments may conduct formal reviews of submitted materials; if the documentation is complete, conforms to statutory formats, and allows for immediate decision-making, a written decision may be rendered on-site, except where laws or regulations stipulate otherwise.
Article 42When foreign investors or foreign-invested enterprises initiate new projects or acquisitions involving fixed asset investment in this municipality, they shall, in accordance with national and municipal regulations, submit project information online through the investment project approval and supervision platform to the development and reform departments for approval or filing of foreign investment projects.
Except for projects within the negative list that are not prohibited from investment, and for projects nationally and municipally mandated for approval regardless of domestic or foreign origin, the development and reform departments shall adopt a uniform filing system for foreign investment projects after receiving all project information submitted online by foreign investors and foreign-invested enterprises.
The municipality’s management measures for approving and filing foreign investment projects shall be formulated and promulgated by the municipal people’s government.
Article 43Foreign investors and foreign-invested enterprises shall report their investment information to the commerce department through the enterprise registration system and the enterprise credit information disclosure system. The municipal commerce department shall provide guidance on reporting investment information.
The content and scope of foreign investment information reporting shall be determined based on necessity; information already shared among departments shall not be required again. The municipal commerce and market regulation departments shall ensure seamless integration and coordination of relevant business systems.
Article 44Relevant municipal departments shall cooperate with the state in implementing the foreign investment security review system and fulfilling related tasks.
Article 45The municipal departments of development and reform, commerce, and economic informatization, together with relevant departments and district people’s governments, shall establish a service system for major foreign investment projects. For projects listed on the major foreign investment project roster, dedicated “green channels” and “one-stop” services shall be provided to coordinate and advance matters related to access, planning, land use, environmental protection, energy consumption, construction, and foreign exchange, supporting successful project implementation. Projects meeting the criteria for major municipal engineering works shall be incorporated into the municipal major engineering coordination mechanism for accelerated advancement.
Article 46This municipality establishes and improves mechanisms for government-enterprise communication with foreign-invested enterprises.
The municipal and district people’s governments and relevant departments shall regularly hold “roundtable meetings,” conduct on-site visits, distribute questionnaires, solicit opinions online, and employ various other methods to listen to the views and suggestions of foreign-invested enterprises, promptly understand and help resolve operational challenges they encounter, and refine relevant policies and measures.
Foreign investors and foreign-invested enterprises may express their concerns and suggestions through hotlines such as “12345,” enterprise service clouds, foreign investment promotion service platforms, chambers of commerce, and associations, and relevant departments shall promptly study and address these inputs.
Article 47The municipal departments of science and technology and immigration control provide work permits and facilitation for the stay and residence of foreign employees of foreign-invested enterprises. Applications processed through the “single window” for foreign worker permits and residence permits shall be completed within seven working days.
For highly skilled foreign talents, technical professionals, and other urgently needed personnel introduced by foreign-invested enterprises, the municipal science and technology department may appropriately relax age, educational background, and work experience requirements when processing their work permits.
For foreign nationals invited by foreign-invested enterprises to engage in business and trade, immigration control and border inspection departments shall, in accordance with regulations, grant port visas and transit visa exemptions.
Article 48The municipal commerce department, in collaboration with relevant departments, opens specialized foreign-related service counters under the “One-Stop Service” initiative, providing lists of services, guidance manuals, and English-language instructions for foreign nationals and foreign-invested enterprises.
Article 49The standing committees of the municipal and district people’s congresses strengthen oversight of foreign investment work within their administrative jurisdictions through special work report hearings and enforcement inspections.
The standing committees of the municipal and district people’s congresses fully leverage the roles of deputies, organizing deputies to conduct focused investigations and on-site inspections around foreign investment, collecting and reflecting the opinions and suggestions of foreign investors and foreign-invested enterprises, and urging relevant parties to implement foreign investment-related tasks.
Article 50Investors from the Hong Kong Special Administrative Region, the Macao Special Administrative Region, and Taiwan, as well as Chinese citizens residing abroad who invest in this municipality, shall abide by these Regulations; except where laws, administrative regulations, or State Council decisions provide otherwise.
Article 51These Regulations shall come into effect as of November 1, 2020.