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FTZs Extend Foreign Equity Cap to 51% for International Shipping Agencies

The Ministry of Transport issued on 1 June 2015 the Announcement on the Trial Implementation of Several Shipping Policies in National Pilot Free Trade Zones (see full text in Chinese).

According to this Announcement, Sino-foreign equity joint venture and cooperative joint venture companies established in the pilot free trade zones with the approval of the competent department of transport under the State Council may engage in public international shipping agency business and the foreign equity cap of these companies will be extended to 51%.

With the approval of the competent department of transport under the State Council, foreign companies may establish Sino-foreign equity joint ventures and contractual joint ventures with no equity ratio limits in the free trade zones to engage in international shipping services at Chinese ports. In this connection, wholly foreign-owned companies may be established in the Shanghai Free Trade Zone and wholly Hong Kong- and Macau-owned companies may be established in the Guangdong Free Trade Zone. Wholly foreign-owned enterprises established in the free trade zones may engage in loading and unloading of international shipments and international maritime container freight station and container yard services.

With the approval of the competent department of transport at the provincial level, wholly foreign-owned companies established in the free trade zones may engage in international shipping management business. The chairman of the board of directors and general manager of equity joint venture or cooperative joint venture international shipping companies in the free trade zones shall be decided by both sides after consultation.

The Announcement forbids mainland-funded shipping companies from sub-chartering vessels that have filed their pilot business for the record. With the exception of ships already filed for the record in accordance with this Announcement, ships not flying the five-starred red flag may not accept consignments for transport of foreign trade container goods between Chinese ports, including goods loaded in one Chinese port for export via another Chinese port, or goods entering the country via one Chinese port but discharged at another Chinese port.

Content provided by Picture: HKTDC Research
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