Tax Preferences for Incorporation of a Foreign-funded Company

I. Foreign-funded enterprises
Income tax rate of 33% if incorporated in Puxi and of 15% if incorporated in Pudong;
Business tax rate of 3% or 5% for ordinary industries and of 10% or 15% for the entertainment industry;
VAT rate of 17% for ordinary goods and of 13% for a few categories of goods such as food, water, feeds, fertilizers, pesticides and farm machinery, etc.

Preferential Tax Policies for Foreign-funded Airfreight Forwarding Enterprises Incorporated in Shanghai

1. Foreign-funded airfreight forwarding enterprises incorporated in urban areas of Shanghai
As from 2009, the neighborhood offices of urban areas of Shanghai successively cancelled the preferential tax policy – tax refund. Therefore, foreign-funded companies incorporated in urban areas of Shanghai may not enjoy the preferential tax policy as before. Only large-sized foreign-funded companies or big-taxpayer foreign-funded companies may apply to the government for tax preference. To incorporate a foreign-funded airfreight forwarding enterprise in an urban area of Shanghai, the foreign investor shall lease a formal office as the registered address of the company.