Shanghai's New Chemical Industry Park

The Administration Committee is an organization set up under the authority of the Shanghai Municipal Government. Its responsibilities include: formulating and amending development projects, plans and industry policies; approving investment projects and land use, and supervising construction projects; coordinating daily administration by different governmental authorities, such as the customs office, foreign affairs office and People's Bank of China Shanghai Branch; providing the necessary instructions and services for enterprises in the Park; and performing the other duties assigned by the Shanghai Municipal Government.

The Development Company 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 Foreign Investment Industrial Guidance Catalogue's (the Catalogue) Encouraged category that are not subject to State overall planning control;

(b) foreign investment projects in the Permitted category of the Catalogue whose total investment amount is no more than US$30 million; and

(c) foreign investment projects in the first sub-category of the Catalogue's Restricted category and whose total investment amount is no more than US$5 million. The Administration Commission is also authorized to approve the amendments 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 assumes the responsibilities 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 officials at the Park, with the authorization of the State Development Planning Commission, the companies within the Park enjoy the preferential tax policies that are identical to those in the Pudong New Area.

Land Use Rights

As the developer of land within the Park, the Development Company is responsible for land use rights transfer. The enterprises and organizations investing in the Park only need to sign land use rights transfer contracts with the Development Company before completing the formalities for acquiring land use rights with the Administration Committee.

By Annie (Ran) Yan and Ron (Rongwei) Cai,

Davis Wright Tremaine LLP^{?/SUP>,
Shanghai}