Notice of the Shanghai Municipal Commission of Commerce and the Shanghai Municipal Office of the State Administration of Taxation on Matters concerning Engaging in Financial Leasing Business by Chinese-Funded Leasing Enterprises in China (Shanghai) Pilot Free Trade Zone

· Area of Law： Foreign Economy and Trade China (Shanghai) Pilot Free Trade Zone

· Level of Authority： Local Regulatory Documents

· Date issued：06-01-2016

· Effective Date：06-01-2016

· Status： Effective

· Issuing Authority： Shanghai Municipal Committee of Commerce Shanghai Municipal Office, State Administration of Taxation

Notice of the Shanghai Municipal Commission of Commerce and the Shanghai Municipal Office of the State Administration of Taxation on Matters concerning Engaging in Financial Leasing Business by Chinese-Funded Leasing Enterprises in China (Shanghai) Pilot Free Trade Zone
The competent commerce departments and taxation bureaus of all districts and counties:
In order to implement the Notice of the Ministry of Commerce and the State Administration of Taxation on Issues concerning Engaging in Financial Leasing Business by Chinese-Funded Enterprises in China (Tianjin) Pilot Free Trade Zone and Other Three Pilot Free Trade Zones (Letter No. 90 [2016], SAT), from April 1, 2016, authorized by the Ministry of Commerce (“MOC”) and the State Administration of Taxation (“SAT”), the Shanghai Municipal Commission of Commerce and the Shanghai Municipal Office of the SAT shall be responsible for confirming the pilot program of engaging in financial leasing business by Chinese-funded enterprises in China (Shanghai) Pilot Free Trade Zone (hereinafter referred to as “SHFTZ”). You are hereby notified of the relevant matters as follows:
I. Application Requirements for Enterprises
To engage in financial leasing business, a Chinese-funded leasing enterprise that has been registered in SHFTZ shall meet the basic requirements as prescribed in Article 4 of the Notice of the Ministry of Commerce and the State Administration of Taxation on Issues concerning Engaging in Financial Leasing Business (No. 560 [2004], MOC) and with prominent core business, stable capital source, simple and transparent equity relationship, sound corporate governance structure, clear development strategies and profit patterns, and good integrity and tax payment records, have paid-in capital of 170 million yuan. Priority support shall be given to enterprises the range of whose services comply with the industrial orientations or policies of the state and the relevant departments and whose shareholders have the relevant industrial background and can offer strong support to enterprises engaging in the pilot program in terms of capital and business development.
To engage in financial leasing business, a Chinese-funded leasing enterprise that has been registered outside SHFTZ shall handle the formalities still in accordance with the existing provisions and procedures.
II=. Material Requirements
1. A written application for engaging in the pilot program, which mainly includes name and place of registration of the enterprise, paid-in capital, equity structure, information on shareholders, business scope, brief operation situation of the previous year (including tax payment), major ideas on financial leasing business to be launched (major business field, business pattern, and capital source), and overall business development planning in the next three years. Information on shareholders shall include names, legal representatives, and places of registration of all shareholders, photocopy of the business license, major business scope, and brief information on the business income, profit, total net assets, and liability ratio of the previous year. Individual shareholders shall provide brief information on other major enterprises under their actual control.
2. A duplicate (photocopy) of the business license.
3. A capital verification report (in case of capital verifications more than once, such report shall be provided each time).
4. An explanation on the source of registered capital.
5. Such documents as articles of association, internal management systems, and risk control systems.
6. List of such senior executives as general manager to be appointed (or holding office at present), financial manager, and person in charge of risk control, experience records, qualification certificates, and evidentiary materials on working experience of the relevant industries for more than three years.
7. Complete financial accounting reports of the last three years and the latest financial statement (including notes, the aforesaid materials of all corporate shareholders shall be provided if it is a newly-established enterprise) of the recommended enterprise that have been audited.
8. Financial accounting reports (including notes) of major shareholders in the last two years that have been audited.
9. A certificate on legal tax payment of the recommended enterprise (the corporate shareholder if it is a newly-established enterprise) as issued by the competent taxation department.
10. Brief information on the enterprise's operation situations of the relevant businesses, mainly including business income, profit, total net assets, and liability ratio, if any of its affiliated enterprises engages in such businesses as pawn, small loans, trust, financing guarantee, and financial leasing.
11. Detailed operation situations of financial leasing business of the shareholder (parent company) of the previous year if it is an enterprise established or to be established by a financial leasing company with practicing qualification, namely, content contained in the annual operation form in the national financial leasing enterprise management information system and the detailed analysis description on the relevant data.
12. A letter of commitment on the authenticity and validity of application materials of an enterprise that applies for engaging in the pilot program of domestic financial leasing.
The aforesaid materials (including photocopies) shall all be affixed with corporate seals in duplicate and be bound in volumes.
III. Working Procedures
1. Where a Chinese-funded financial leasing enterprise that is registered in SHFTZ applies for engaging in financial leasing business, it shall submit application materials (in duplicate) to the Office for Service Industry Development of the Shanghai Municipal Commission of Commerce.
2. The Shanghai Municipal Commission of Commerce shall, jointly with the Shanghai Municipal Office of the SAT, examine enterprises according to application materials they provide. The Shanghai Municipal Commission of Commerce and the Shanghai Municipal Office of the SAT shall jointly release an announcement on qualified enterprises and specify the list of enterprises included in the pilot program of domestic financial leasing. Such qualified enterprises shall enjoy equal benefits with those in the list of enterprises included in the pilot program of domestic financial leasing as issued by the MOC and the SAT. An enterprise may handle added business at the local market regulatory department upon strength of the announcement.
IV==. Relevant Requirements
1. Enterprises included in the pilot program shall observe the relevant provisions of laws, regulations, rules, and the Measures for the Supervision and Administration of Financial Leasing Enterprises, voluntarily regulate their business operations, and prevent business risks.
2. Enterprises included in the pilot program shall, in a timely manner, log onto the national financial leasing enterprise management information system (http://leasing.mofcom.gov.cn), fill out the relevant information, complete the work of quarterly and yearly reports on schedule, and pay various taxes on schedule.
3. If an enterprise that is included in the pilot program according to the requirements of this Notice is relocated outside SHFTZ, such enterprise shall be disqualified for the pilot program and it shall re-apply for the qualification for engaging in the pilot program in accordance with the existing provisions on applications of enterprises outside SHFTZ for engaging in the pilot program.
4. Any enterprise engaging in the pilot program that does not substantively conduct the financial leasing business for more than one year or commits violation of laws and regulations shall be disqualified for the pilot program by the Shanghai Municipal Commission of Commerce jointly with the Shanghai Municipal Office of the SAT.
Contact Persons:
Shanghai Municipal Commission of Commerce: Guo Yinglian, 021-23110650
Shanghai Municipal Office of the State Administration of Taxation: Xiong Zhenyu, 021-54679568-66043
Shanghai Municipal Commission of Commerce
Shanghai Municipal Office of the State Administration of Taxation
June 1, 2016