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Shanghai Chemical Industry Park
by Annie (Ran) Yan and
Ron (Rongwei) Cai
[February 2002]
Shanghai Municipal Government recently established a Chemical Industry
Park (the "Park"), which is designed to be an industrial
zone devoted to the development of petro-chemical and refined chemicals
production. The Shanghai Municipal Government hopes to build the
Park into one of the largest and most concentrated chemical production
bases in Asia and eventually in the world. So far, several major
multinational corporations, such as BP, BASF, Bayer, have already
decided to make investments within the Park. On February 1, 2002,
the Administrative Measures of Shanghai Chemical Industry Park (the
Administrative Measures) promulgated by the Shanghai Municipal Government
came into effect.
ADMINISTRATION AUTHORITIES
There are three levels of administration authorities for the Park:
Shanghai Chemical Industry Park Leadership Group (the "Leadership
Group"), Shanghai Chemical Industry Park Administration Committee
(the "Administration Committee") and Shanghai Chemical
Industry Park Development Co., Ltd. (the "Development Company")
At the top of the administrative hierarchy is the Leadership Group
which is mainly responsible for establishing general policies and
principles for the Park.
The Administration Committee is an organization set up under the
authority of the Shanghai Municipal Government. Its responsibilities
include: formulating and amending the development projects, plans
and industry policies; approving the investment projects and land
use, supervising the construction projects; coordinating the daily
administration by different governmental authorities, such as customs
office, foreign affairs office and Bank of China Shanghai Branch;
providing the necessary instructions and services for the enterprises
in the park; performing the other duties assigned by Shanghai City
government.
Shanghai Chemical Industry Park Development Co., Ltd assumes the
duty for the development and construction of the Park, investment
and construction of municipal infrastructure facilities and utilities
in the Park.
LEGAL FRAMEWORK FOR ATTRACTING FOREIGN AND DOMESTIC
CAPITAL
- Approval Authorities
With the authorization of the Shanghai Foreign Investment Commission,
the Administration Committee is granted the authority to examine,
approve, verify and confirm certain foreign investment projects
and enterprises in the Park. The Administration Committee has
the authority to approve the establishment of the following
projects:
(a) foreign investment projects in the "Encouraged"
category which are not subject to State overall planning control;
(b) foreign investment projects in the "Permitted"
category whose total investment amount is no more than 30 million
US Dollars; and
(c) foreign investment projects in the first sub-category of
the "Restricted" category and whose total investment
amount is no more than 5 million US Dollars. The Administration
Commission is also authorized to approve the change to the joint
venture contracts and Articles of Association of foreign investment
enterprises. Moreover, with the authorization of Shanghai Municipal
Development Planning Commission, the Administration Commission
is also authorized to examine, approve and administer investment
projects in the "Encouraged" and "Permitted"
categories.
- Formation Procedures
According to the Administrative Measures, the time limit for
the Administration of Industry and Commerce to complete the
registration procedures for setting up an enterprise in the
Park is shortened to three to five working days as long as all
the required documents are submitted.
- Preferential Policies
The Park is considered as a national-level development zone
and according to the official of the Park, with the authorization
of the State Development Planning Commission, the companies
within the Park enjoy the tax preferential policies that are
identical to those in the Pudong New Area.
- Land Use Right
As the developer of the land within the Park, the Development
Company is responsible for land use right transfer. The enterprises
and organizations investing in the Park only need to sign land
use right transfer contracts with the Development Company before
completing the formalities for acquiring land use right with
the Administration Committee.
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