free trade zone
The Free Trade Zone (FTZ) allows bonded processing and warehousing of goods to be classified, labeled, repackaged and other value-add processing applied
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Products produced within the FTZ are exempt from Value Added Tax (VAT) and consumption tax when exported. The FTZ facilitates short-term storage of components and finished goods for Global Distribution while providing faster VAT refunds for suppliers. Goods moving between the FTZ and abroad are not restricted by the most common import/export quotas. Enterprises may carry out bonded processing and bonded warehousing businesses in FTZ. Goods in the FTZ may be transferred or assigned between in-zone enterprises. In-zone enterprises may hold exhibitions of foreign commodities or non-FTZ commodities within the FTZ. Tax exemption is granted to types of machinery, equipment, and other capital construction supplies to be used in the FTZ. Products produced or processed by in-zone enterprises are exempt from VAT and consumption tax when sold in FTZ or abroad. A tax rebate is granted to the domestic manufactured portion of materials or components used in export products produced or processed by in-zone enterprises. For the domestic sale of products produced or processed with imported materials or components by in-zone enterprises, access to China is possible via special channels (although some tax may be levied).