（Promulgated on 20 December 1996 and effective as of 1 January 1997.）
颁布日期：19961220 　实施日期：19970101 　颁布单位：上海市人大常委会

PART ONE　GENERAL PROVISIONS

Article 1　These Regulations are formulated in accordance with the relevant State laws and rules， with reference to the current regulations of international free trade zones and integrated with the actual situation in this Municipality， in order to expand the open-door policy， develop international trade and encourage economic prosperity.

Article 2　The Shanghai Waigaoqiao Bonded Zone （hereafter， Bonded Zone， and outside China translated as 'international free trade zone'） has been established following approval of the State Council， and is located in Waigaoqiao， a district which is situated in Shanghai Municipality Pudong New Area， and is established as a separate economic trade zone with a special administration.

Goods may move in and out of the Bonded Zone freely， and shall be exempt from Customs duty and import duty， permit documentation checks， and the usual Customs supervisory procedures， except where goods are prohibited for import and export by the State or are subject to special regulations.

Article 3　The Bonded Zone shall mainly develop import and export trade， transit trade， processing trade， goods storage， goods transport， commodity goods displays， commodity goods trade and business such as finance.

Article 4　The Bonded Zone is under the leadership of the Shanghai Municipal People's Government， （hereafter， municipal people's government）。 Customs supervision shall be implemented by the Customs authorities.

Article 5　The economic activities of enterprises， organizations and individuals in the Bonded Zone shall respect these Regulations.

Article 6　The legal rights and interests of investors in the Bonded Zone shall receive the protection of the law.

PART TWO　ADMINISTRATION AND SERVICE ORGANIZATIONS

Article 7　The Shanghai Municipality Waigaoqiao Bonded Zone management committee （hereafter， management committee） is the agency organization of the Shanghai Municipal people's government. The management committee shall co-ordinate the administration affairs of the Bonded Zone and carry out independent business accounting of the administration of financial revenues and expenditures.

The director of the management committee shall be appointed by the municipal people's government.

Article 8　The management committee shall exercise the following responsibilities：

1. Responsibility for the implementation of laws and rules and the provisions of these Regulations in the Bonded Zone， and the formulation and issuing of specific provisions for the Bonded Zone；

2. Formulating development plans and production policies for the Bonded Zone and， following approval from the municipal people's government， organizing their implementation；

3. Responsibility for the administration work of the Bonded Zone's projects， planning， State assets， investment， foreign economic trade， public finance， local taxes， statistics， industry and commerce administration affairs， public security， labour affairs， external affairs， transport， basic installations， real estate， environmental protection， environmental sanitation， public affairs and other related administration work；

4. Co-ordination of the work of Customs， State taxes， finance， goods inspection and other departments in the Bonded Zones； and

5. Other powers bestowed by the people's government.

Where the administration work in item （3） of the previous paragraph involves ratification and issuing of registration certification and licences， the relevant department in charge in the municipality shall entrust the corresponding administration department of the management committee to handle such procedures.

Article 9　The Bonded Zone Customs authorities shall implement special methods of supervision with regard to the Bonded Zone. A reporting and checking system of all goods entering or leaving the Bonded Zone from and to outside China， as well as merchandise circulated within the Bonded Zone， shall be implemented； and the standard rules shall be implemented in the Bonded Zone for the administration of the supervision of goods， transportation tools and merchandise entering or leaving the Bonded Zone into or from non-Bonded Zones within China （hereafter， non-Bonded Zones）。

Article 10　The Waigaoqiao port area shall implement integrated administration with the Bonded Zone. The port administration organization shall be responsible for port administration.

Article 11　Bonded Zone development companies commissioned by the management committee shall assume responsibility for municipal government construction and administration in the Bonded Zone and provide services for enterprises and organizations therein.

Article 12　The Bonded Zone may， in accordance with the law， establish reporting， inspection， labour affairs， notarization and lawyers organizations， etc.， in order to provide services for enterprises and organizations in the Bonded Zone.

PART THREE　ESTABLISHMENT OF ENTERPRISES

Article 13　Investors may， in accordance with laws， rules and these Regulations， apply to establish enterprises in the Bonded Zone.

It is prohibited to establish projects which pollute the environment， endanger State security or harm society's interests.

Article 14　Investors establishing foreign investment enterprises in the Bonded Zone shall submit an application to the management committee. The management committee shall， with the relevant departments， decide whether or not to approve the application within 20 days of receiving the complete and legal application documents （hereafter， application documents）。 Where approval is granted， the management committee's department of the administration for industry and commerce shall issue a business licence within three days of the decision.

Investors establishing other enterprises in the Bonded Zone shall submit an application to the management committee's department of the administration for industry and commerce. Such department shall， with the relevant departments， decide whether or not to approve registration within 15 days of receiving the application documents. Where registration is approved， a business licence shall be issued.

Where an application falls outside the jurisdiction of the management committee's department of the administration for industry and commerce to examine and ratify the application， the application shall be reported to the management committee for examination and approval. Where the application for examination and approval falls outside the jurisdiction of the management committee， the latter shall， within 10 days of receiving the application， pass it on to the municipality's department in charge of examination and approval.

An enterprise shall， within 30 days of obtaining a business licence， handle registration procedures - Customs， taxation， foreign exchange controls， merchandise checks， etc. An investor shall pay its capital according to instalment periods and shall comply with capital supervision procedures.

Article 15　Enterprises in the Bonded Zone shall operate on the basis of the approved scope of their business operations and in accordance with the law. Enterprises shall complete statistical， financial and accounts systems and establish special goods accounting books. In accordance with the legally stipulated time limit， the enterprise shall send relevant report statements to the management committee， Customs authorities and other relevant departments.

Construction， production and transportation enterprises shall comply with the rules on environmental protection and in accordance with the law handle the relevant procedures with the management committee.

PART FOUR　BUSINESS OPERATION RULES AND PRINCIPLES

Article 16　Enterprises in the Bonded Zone may freely conduct trade between the Bonded Zone and outside China and are exempt from quotas and permits， except where State rules stipulate otherwise.

Enterprises in the Bonded Zone may freely conduct trade within the Bonded Zone.

Enterprises in the Bonded Zone may， in accordance with the relevant State rules， conduct trade between the Bonded Zone and non-Bonded Zones， and with other bonded zones within China.

Enterprises in the Bonded Zone which are approved by the State department in charge for external trade， may act as agents for import and export trade of enterprises in non-Bonded Zones.

Article 17　Domestic and foreign enterprises in China （including enterprises in the Bonded Zone） may hold international commodity displays in the Bonded Zone.

Enterprises in the Bonded Zone may establish commodity exchange markets and freely take part in import and export commodity sales fairs in the Bonded Zone； engage in commodity displays and wholesale business； and may freely take part in import and export commodity display fairs and exhibitions in non-Bonded Zones.

Following approval， enterprises in the Bonded Zone may hold bonded commodity displays in non-Bonded Zones.

Article 18　To encourage foreign enterprises to store goods in the Bonded Zone， there shall be no restrictions on storage time.

Enterprises may carry out grading， packaging， selection， categorization， labelling and marking and other commercial processing in the Bonded Zone.

Article 19　Products produced in the Bonded Zone area shall be mainly sold outside China.

Except where State production policies prohibit， the Bonded Zone shall have no restrictions on raw materials coming from outside China and the processing of products for sale outside China.

Following approval， enterprises in the Bonded Zone may entrust materials and parts transported in from outside China to non-Bonded Zone enterprises for processing and may also accept commissions from non-Bonded Zone enterprises to develop their processing business.

Article 20　To encourage enterprises in the Bonded Zone to develop business in the international transportation and distribution of goods， enterprises in the Bonded Zone may， following approval， conduct such business as containerized transportation and bonded transportation into and out of the Bonded Zone， as well as act as goods transportation agents and shipping agents.

Article 21　Other international service trade may be developed in the Bonded Zone.

PART FIVE　EXIT AND ENTRANCE ADMINISTRATION

Article 22　Goods and Articles that are directly shipped into the Bonded Zone from outside China， or that are directly shipped from the Bonded Zone to outside China， should be reported to the Bonded Zone Customs authorities. Goods that affect safety， hygiene and environmental protection shall be submitted for statutory inspection.

Goods and Articles that are transported from the Bonded Zone to non-Bonded Zones shall be considered as imports， and those transported from non-Bonded Zones to the Bonded Zone shall be considered as exports， and shall go through import and export procedures.

Items such as machinery， equipment， spare parts， raw materials， transportation tools， construction materials and office equipment， etc.， that are transported from non-Bonded Zones into， and are provided for use in， the Bonded Zone shall be registered and cleared by the Bonded Zone Customs authority.

Article 23　Motor-driven vehicles entering and leaving the Bonded Zone shall enter and leave at designated check points， on the strength of passage documents issued by the management committee's department of public security， and submit to inspection by the check point inspection station. Goods vehicles responsible for transporting bonded goods shall comply with the conditions for supervision as stipulated by the Customs authorities.

Article 24　International carriers stopping in or passing through Waigaoqiao port harbour shall submit a prior application to the port administration authorities， and undergo shore inspection.

Article 25　Persons leaving and entering the Bonded Zone shall leave and enter at designated check points， on the strength of valid documentation permitted by the management committee's department of public security.

Article 26　Persons who are not authorized by the management committee may not reside in the Bonded Zone.

PART SIX　FINANCIAL ADMINISTRATION

Article 27　Following approval by the responsible State financial department in charge， the use of designated foreign currencies is permitted in the Bonded Zone.

Article 28　Enterprises in the Bonded Zone may， in accordance with regulations， open a foreign currency current account. Goods brought into or out of the Bonded Zone for trade shall be calculated and paid for in foreign currency. All fees stipulated by the administration body within the zone shall be calculated and paid in Renminbi. Other expenses may be calculated and paid either in foreign currency or in Renminbi.

Article 29　Where goods are transported between and into and out of the Bonded Zone and non-Bonded Zones， collection of export revenue and import payments and cancellation after verification shall be handled by the enterprise in the non-Bonded Zone. Where goods are transported between and into and out of the Bonded Zone and outside China， the Bonded Zone enterprise shall not handle foreign exchange cancellation after verification procedures， but must handle the international revenue and expenditure statistical examination report.

Article 30　Following approval by the State financial department in charge or organization authorized by it， domestic and foreign financial institutions may set up operations branch offices in the Bonded Zone， to engage in relevant financial business.

Article 31　Following approval by the State financial department in charge or organization authorized by it， foreign investment banks in the Bonded Zone may engage in Renminbi business； Sino-foreign investment financial institutions in the Bonded Zone may engage in offshore finance， overseas investment， external guarantees and other duties for which they have received special permission.

PART SEVEN　CONSTRUCTION AND REAL ESTATE ADMINISTRATION

Article 32　Where enterprises and organizations in the Bonded Zone require land for use， such enterprises and organizations shall sign a land use transfer contract with a Bonded Zone development company， and shall handle land use procedures with the management committee.

Article 33　Where enterprises and organizations in the Bonded Zone require construction projects they shall， in accordance with the provisions of laws and rules， apply for a construction projects planning permit from the management committee's department of planning administration. The management committee's department of planning administration shall， within 25 days of receipt of the application documents， issue its decision on approval or non-approval. Following compliance with examination and ratification， a construction project planning permit shall be issued.

Construction project administration within the Bonded Zone shall be handled in accordance with the relevant laws and rules.

Article 34　Enterprises and organizations in the Bonded Zone shall apply for registration with the management committee's department of real estate administration， in accordance with the law， within 30 days after the construction project works are finished and have undergone standard checks. The management committee's department of real estate administration shall， within 10 days of receiving the application documents， issue a real estate authorization certificate.

Article 35　Enterprises and organizations in the Bonded Zone may transfer， rent and mortgage lawfully obtained real estate， but shall handle registration procedures with the management committee's department of real estate administration， and pay tax according to the law.

Article 36　The proprietor of architectural structures within the Bonded Zone shall， within 30 days from the date of the structures being paid for and handed over for use， establish an estate administration organization， and following reporting to and gaining approval from the management committee's department of real estate administration， carry out property administration in accordance with the law， or entrust another property administration company holding certain qualifications to carry out such administration.

PART EIGHT　TAX COLLECTION PROVISIONS

Article 37　The following goods and Articles， when brought into the Bonded Zone from outside China， shall be exempt from Customs duties and import tax， except where State provisions stipulate otherwise：

1. imported goods；

2. transit goods；

3. goods stored in the Bonded Zone；

4. all materials， spare parts and packaging required for production by enterprises in the Bonded Zone；

5. all machinery， equipment and basic construction goods and materials required for construction projects within the Bonded Zone， and

6. all machinery， equipment and reasonable amounts of office supplies， fuel and maintenance spare parts for use by the enterprises and organizations themselves in the Bonded Zone.

Article 38　Goods transported from the Bonded Zone to outside China shall be exempt from Customs duty， except where State regulations stipulate otherwise.

Goods for export through the Bonded Zone shall be granted tax rebates in accordance with relevant State provisions on export tax rebates.

Article 39　Goods transported from the Bonded Zone to non-Bonded Zones shall， except where State regulations stipulate otherwise， in accordance with State provisions on the import of goods， be subject to Customs duty and import tax.

Article 40　Products produced by Bonded Zone enterprises for retail within the zone or for transportation outside China shall be exempt from production tax. Products for retail to non-Bonded Zones shall be subject to production tax. Customs duty and import tax shall be imposed in accordance with the ratios for products that include materials and parts from outside China.

Article 41　Production enterprises in the Bonded Zone shall be levied enterprise income tax at a rate of 15%. Where the period of operation is more than 10 years， starting from the end of the first year of profit， the first and second years shall be exempt from enterprise income tax； the third to fifth years enterprise income tax shall be levied at half rate.

Article 42　Non-production enterprises in the Bonded Zone carrying out activities such as trade and storage shall be levied enterprise income tax at a rate of 15%. Where the period of operation is more than 10 years， the first year shall be exempt from enterprise income tax； the second and third years enterprise income tax shall be levied at half rate.

Article 43　Except where specified in Articles 37 to 42 of these Regulations， taxation of other operations activities shall be implemented in accordance with State and municipal tax provisions for the Pudong New Area.

PART NINE　LABOUR ADMINISTRATION

Article 44　Enterprises in the Bonded Zone may， according to production operations requirements， determine their own organizational set up and staffing structure， and in accordance with the law determine staff recruitment conditions， wage standards and forms of staff allocation.

Enterprises shall implement a labour contract system.

Article 45　Enterprises in the Bonded Zone shall， in accordance with relevant State and municipal provisions， carry out labour safety and hygiene work， implement a social insurance for staff and accord staff and workers their lawful rights and interests.

PART TEN　LEGAL LIABILITY

Article 46　Enterprises， organizations and individuals in the Bonded Zone that violate the provisions of these Regulations shall be subject to administrative penalties， which shall be imposed by the relevant administration department or departments such as the Customs departments， and shall be penalized each according to his or her professional responsibilities in accordance with the law.

Article 47　Personnel of the management committee and other authorities who neglect their duties， abuse their authority， practice favouritism and engage in fraudulent activities， shall be imposed an administrative penalty by their own work unit or next higher authority. Where such an act constitutes a crime， criminal liability shall be pursued in accordance with the law.

Article 48　Parties who are dissatisfied with the actual administration actions of the relevant administration department of the management committee or departments such as Customs may， in accordance with the provisions of the Administrative Review Regulations or the PRC， Administrative Procedure Law， apply for administration review or file administration litigation.

PART ELEVEN　SUPPLEMENTARY PROVISIONS

Article 49　Investors from the areas of Hongkong， Macao and Taiwan and Chinese citizens resident overseas who set up enterprises in the Bonded Zone， and economic trade activities in the Bonded Zone with Hongkong， Macao and Taiwan， may implement such activities with reference to these Regulations.

Article 50　Interpretation of specific questions regarding the application of these Regulations shall be the responsibility of the municipal people's government.

Article 51　These Regulations shall be effective as of 1 January 1997.