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Issue 32-August 2019 Veritas Update
Release date:
2019-08-17

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Issue 32-August 2019 Veritas Update

CATALOG


Latest Hot spot

New Era New Chapter: the Release of the General Plan of Shanghai Free Trade Zone Lingang New Area

The Online Lending Industry enters the Stage of Regulation and Rectification Prevent entering the P2P 'Dangerous Zone'


New Law Express

Special Administrative Measures (Negative List) for the Access of Foreign Investment (2019 edition) became effective 

The Release of the Measures for Security Assessment for Cross-border Transfer of Personal Information (Draft for Comment)


Our Firm’s Trend

Celebrating launch of Shanghai Veritas’ upgraded website  


Issue 32-August 2019 Veritas Update

【Latest Hot spot 】

New Era New Chapter: the Release of the General Plan of Shanghai

Free Trade Zone Lingang New Area

 

On July 27, 2019, the State Council issued General Plan of Shanghai Free Trade Zone Lingang New Area (hereinafter referred to as the Plan). The plan is divided into five parts. It puts forward 23 specific policies, plans the time line of opening up of the new port-vicinity areas, and highlights the new planning orientation of China's all-rounded opening up. By 2025, the new area will establish a relatively mature system of investment and trade liberalization and facilitation. A number of functional platforms with higher openness will be created.

 

In the Plan, it is clear that an institutional system with investment and trade liberalization as its core should be established. On the basis of the application of various open and innovative measures in the Free Trade Pilot Area, the new area should be supported to promote the facilitation of investment and trade liberalization by focusing on investment freedom, trade freedom, capital freedom, transportation freedom and employment freedom. At the same time, the tax system and policy with international competitiveness should be implemented. Among them, there are five tax policies:

1. Implementing special tax policies on goods and services transacted between enterprises in physical purse-seine areas and goods entering physical purse-seine areas abroad;

2. Expanding the scope of application of VAT policy for service export in new area, and researching new tax policy for new area adapted to overseas investment and offshore business development;

3. Exploring the tax policy arrangement of free trade account on the premise of not causing tax base erosion and profit transfer;

4. Enterprises in the new area that are qualified to engage in research and development in key areas such as integrated circuits, artificial intelligence, biomedicine, civil aviation and the others shall be levied enterprise income tax at a rate of 15% within five years from the date of establishment;

5. Study implement the subsidy policy of individual income tax on overseas talents.

 

The Plan also proposes the implementation of free and convenient personnel management, including:

· To loose the restrictions on the employment of high-end talents in modern service industries and implement more open and convenient policies and measures in the areas of entry and exit of personnel and permanent residence of foreign talents;

· To establish a work permit system and a talent visa system for foreigners in the new area;

· To allow qualified professionals in finance, construction, planning, design and other fields with overseas professional qualifications to provide services in the new area after filing. Their overseas experience can be regarded as domestic experience;

· Except involving national sovereignty and security, foreigners are allowed to apply for the relevant vocational qualification examinations in the new area;

· To provide convenient visas and residence policies and measures for foreigners engaged in business, exchanges, visits and other economic and trade activities in the new area;

· To formulate and improve policies and management measures for the introduction of overseas talents, and to provide 'green channels' for high-level overseas talents such as research and innovation leaders and teams to handle work permits, permanent or long-term residence procedures;

· To explore and implement the quota management system for foreigners to provide more convenient services for foreign talents needed by registered enterprises in the new area.

 

The Online Lending Industry enters the Stage of Regulation and Rectification Prevent entering the P2P 'Dangerous Zone'

 

The online lending industry is still growing. The industry cannot hide from the policy supervision. It also cannot be separated from the support from policies. With the issuance of national and local regulatory policies, the P2P online lending industry officially entered the regulatory era, and a relatively complete regulatory system was initially formed. According to the “Interim Measures for the Administration of Business Activities of Peer-to-Peer Lending Information Intermediaries” (“the Interim Measures”), the official name of P2P Online Lending Information is 'online lending information intermediary institutions', and the specific definition is “financial information intermediary institutions legally formed to specially conduct online lending information intermediary business activities. Such type of institutions take the Internet as the primary channel, and provide information search, information release, credit rating, information exchange, credit matching and other services for direct lending between borrowers and lenders (i.e. accommodators).” According to the Interim Measures, P2P Banks are not allowed to engage in self-financing, providing guarantee or promising guaranteed principal and interest to lenders, breaking up financing projects, selling financial products such as bank financial management, brokerage management, fund, insurance or trust products, or engage in equity-based or donation-based crowdfunding.

 

On May 10, 2019, China's Ministry of Public Security (MPS) held a press conference in Beijing to report on efforts to crack down on and prevent illegal fund-raising and other economic crimes involving the mass. According to the MPS, in recent years, the online lending, financial management and investment, pension services, consumer rebates, virtual currency, financial mutual assistance become the “hardest hit areas” of economic crimes involving the mass. It involves a number of people, a large area and a huge amount of money. It seriously violates the lawful rights and interests of the people, disrupts the order of market economy severely, and brings huge economic and financial risks.

 

On July 1, 2019, Wang Dai Zhi Jia released 'P2P Online Lending Industry Report (June 2019)', which shows that 'in June 2019, the transaction volume of P2P online lending industry was 89.381 billion RMB, which is 3.622 billion RMB less than the previous month. It is a drop of 3.89% compared with the statistics last month and a drop of 50.86% compared with the previous year. The transaction volume continued to decline this month, mainly because some of the head platforms actively reduce the number of bid and reduce the scale of the transactions in order to meet the ‘three downs’ regulatory requirement”. From the perspective of regulatory dynamics, with stricter regulatory policies and active or passive withdrawal of many platforms, the industry clearing is still continuing. It is predicted that, in the future, the withdrawal and transformation of P2P online lending platform will still be the main theme of the industry for a long time.

 

How to choose a compliant P2P platform? It is advised to consider the following aspects: firstly, identify pseudo-P2P. On P2P platforms which disclose real information, detailed information of borrowers and the amount of money borrowed can be seen before each loan is lent. Secondly, pay attention to whether the platform insists on disclosing information and connects to the information disclosure system of the National Internet Finance Association of China. Thirdly, pay attention to whether the platform insists on small amount diversification, including small amount of cash loan, consumer finance, car loans, rural finance, etc. Fourthly, pay attention to the fund strength and risk resistance of the platform.

 

【 New Law Express 】

 

Special Administrative Measures (Negative List) for the Access of Foreign Investment (2019 edition) became effective

 

On June 30, 2019, the National Development and Reform Commission and the Ministry of Commerce jointly issued the “Special Administrative Measures (Negative List) for the Access of Foreign Investment (2019 edition)” and the “Special Management Measures (Negative List) for the Access of Foreign Investment in the Pilot Free Trade Zones (2019 edition)”, which took effect on July 30, 2019.

 

After the revision, the number of items on the negative list for foreign investment in China has been reduced from 48 to 40, and the number of items on the negative list for foreign investment in pilot free trade zones has been reduced from 45 to 37. The revision mainly focuses on three aspects: first, the service sector will be further opened to the outside world; Second, the market of access for agriculture, mining and manufacturing is relaxed. Third, the opening of pilot free trade zones is improved and expanded. The new measures to open the service sector to the outside world mainly include: in the field of transportation, the restriction that domestic shipping agents must be controlled by the Chinese side is lifted; In the field of infrastructure, the restrictions that gas and heat networks in cities with a population of 500,000 or more must be controlled by the Chinese party are lifted; In the cultural sector, the restrictions on foreign investment in the three domestic businesses, namely domestic multi-party communications, store-and-forward, and call centre services are lifted.

 

The Release of the Measures for Security Assessment for Cross-border Transfer of Personal Information (Draft for Comment)

 

On June 13, 2019, the Cyberspace Administration of China (“CAC”) issued a notice on the 'Measures for Security Assessment for Cross-border Transfer of Personal Information (Draft for Comment)” (“the Measures”) to solicit public opinions on “The Measures”. The full text of the draft contains 22 articles, which specify the requirements for assessment of personal information of cross-border declaration, declaration materials, key assessment contents, personal information of border-crossing records, the contents of border-crossing contract and the rights and obligations requirements, the contents and requirements of the analysis report of security risks and security safeguarding measures and other requirements. In terms of content, there are mainly the following highlights:

· Separate personal information from important data;

· Network operators and recipients of overseas personal information need to sign data contracts and report to the network information department;

· A data contract shall specify a clear scenario (purpose, type, and retention period) for data crossing the border;

· The responsibilities and obligations of network operators and data recipients should be clearly stated in the data contract;

· The subject of personal information should be set in the data contract as the beneficiary of the rights and interests clause of the subject of personal information and have the right to claim for compensation.

 

【Our Firm's Trend】

Celebrating launch of Shanghai Veritas’ upgraded website

In order to continuously provide efficient, professional and high-quality legal services to both domestic and foreign clients, the official website of Shanghai Veritas Law Corporation has recently completed the upgrade and revision work and was launched this month. The upgrade aims at improving the image of the website and providing high-quality services for domestic and foreign clients, enhancing the influence of the Corporation. The column setting, function design, service content and the form of expression of the website have been greatly adjusted, and the column section has been reorganized according to the functional zoning. Further integration of information resources is made to provide clients with more comprehensive, efficient and convenient services.

 



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