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China Insight - Corporate

Shanghai Free Trade Zone Negative List 2014 Issued


Outside of the FTZ, foreign investments are subject to approval by the competent Authority of Commerce. In contrast, a negative list approach is adopted for foreign investments in the FTZ. The negative list refers to a list specifying industries which are restricted or forbidden for foreign investment. For those industries which do not fall into the scope of the negative list, foreign investors can enjoy the same treatment as domestic investors in terms of market entry in the FTZ, i.e. such foreign investments are no longer subject to prior approval, but the company establishment can be registered directly with the competent Administration for Industry and Commerce.

On 30 September 2013, the Shanghai Government issued the 2013 version of the negative list (“2013 Negative List”). The 2013 Negative List mainly followed the 2011 version of the Foreign Investment Industry Guideline Catalogue and fell considerably short of expectations. Basically, almost all industries were covered by the negative list, i.e. the promised changes were just a kind of window dressing. After nine months of consideration, on 30 June 2014 the Shanghai Government released the 2014 version of the negative list (“2014 Negative List”). The 2014 Negative List took effect on the same day.

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Portrait of Ulrike Glueck
Dr. Ulrike Glueck
Managing Partner