Shenzhen Introduces Favorable Policies to Promote E-commerce Development

October 28, 2011 Posted by China Briefing Reading Time: 3 minutes

Oct. 28 – Shenzhen was approved by China’s National Development and Reform Commission and the Ministry of Commerce to be the first e-commerce model city in September 2009, following the State Council’s issuance of “Certain Opinions on Accelerating the Development of E-commerce (Guobanfa [2005] No. 2)” in 2005, which provided general guidance for the development of e-commerce in China.

To further the development of the e-commerce industry, the Market Supervision Administration (MSA) of Shenzhen Municipality spearheaded the reform in the registration of companies in the e-commerce sector. These changes are codified in “Several Measures on Servicing the Healthy and Rapid Development of the E-commerce Market” (Shenzhen Municipality Jianzhuzi [2010] No. 16, “Measures”), issued by the MSA on June 7, 2010. The Measures permit e-commerce companies to register without establishing an address and meeting capital requirements.

With regard to the loosening of the address requirement for e-commerce enterprises, the Measures permit e-commerce operators with actual offices to register multiple enterprises using a single address in a concentrated office area that meets the relevant requirements. For e-commerce operators without actual offices, Shenzhen is implementing a corporate secretarial system in pilot locations, where operators can use the address of the corporate secretarial enterprise it delegates as the business address of the enterprise. These corporate secretarial enterprises provide corporate secretarial services including address hosting, mail pick up, annual inspection with the Administration of Industry and Commerce, and accounting and tax declaration. They also provide legal consulting and value-added services such as online sales courses. This allows entrepreneurs to save tremendous start-up costs by doing away with the need and expense of renting an office.

In the past year since the implementation of the Measures, 21 e-commerce secretarial companies have been established and, as a result, Shenzhen has witnessed an increase of more than 2,000 e-commerce companies during that time. The Measures have also attracted the registration of e-commerce enterprises by entrepreneurs from outside of Shenzhen.

In addition to changes in the registration of e-commerce companies, Shenzhen has also made other efforts to promote its e-commerce development. One example is the building of e-commerce industrial parks. The Futian International E-commerce Industrial Park was opened in 2009 and currently has more than 150 internet and e-commerce companies. Aside from amenities such as fiber-optical communication networks, high-end restaurants, as well as proximity to various means of transportation stations, the industrial park also established internet training centers and various corporate secretarial enterprises to provide AIC registration and other services to enterprises.

On March 7, 2011, the State Administration of Taxation, State Administration for Industry and Commerce, Ministry of Commerce, National Development and Reform Committee, and the People’s Bank of China jointly issued the “Guiding Opinion on Commencing the Creation of E-Commerce Model Cities in China (Fagaigaoji [2011] No. 463),” followed by the promulgation of the “Circular on Relevant Matters in Organizing the Commencement of the Creation of E-commerce Model Cities in China (Fagaibangaoji [2011] No. 1915)” on August 9, 2011, which provided for the compilation of plans for creating the e-commerce model cities, and determining the list of such cities. We therefore expect the establishment of more e-commerce model cities throughout China in the near future.

Dezan Shira & Associates is a boutique professional services firm providing foreign direct investment business advisory, tax, accounting, payroll and due diligence services for multinational clients in China. The firm specializes in assisting foreign enterprises establish operations and take advantage of incentives in the country. For advice, please email info@dezshira.com, visit www.dezshira.com, or download the firm’s brochure here.

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