Factors that may influence your choice of location include local infrastructure, land prices and availability, human resources, local government policies and attitudes, location of your joint venture partner (if any), proximity to suppliers, and proximity to your target market (if you plan to sell your products domestically).
Perhaps even more importantly, however, it is crucial that you locate your company within a designated special investment zone in order to take advantage of significant preferential tax rates, benefits and policies available to foreign investors located in these areas (although these are being phased out over the next few years in line with Chinas WTO commitments, it remains unclear whether China will raise FIE tax rates, lower general tax rates, or simply use nationality-neutral standards that will nevertheless disproportionately benefit FIEs). There are several types of special economic areas:
Special Economic Zones: Shenzhen, Zhuhai, Xiamen, Hainan and Shantou were designated as Special Economic Zones in the 1980s in order to give local authorities the ability to offer policy and tax incentives to foreign investors. With the rapid progress...
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