Issue 84

Shanghai Weekly Bulletin

No.1, March 2025

Shanghai Weekly Bulletin is an information service presented by the Foreign Affairs Office of Shanghai Municipal People's Government in collaboration with Wolters Kluwer to foreign-funded enterprises, foreign-related institutions as well as people from overseas living in Shanghai. Covering major national and Shanghai foreign-related news, event information, policy Q&A and interpretations in the past week, it keeps you up-to-date with the latest foreign-related policies and developments in Shanghai.

Laws and Regulations

【National】

1. Administrative Measures for Final Settlement of Individual Income Tax on Consolidated Income Released

【Keywords: Individual income tax】

On February 26, the State Administration of Taxation released the Administrative Measures for Final Settlement of Individual Income Tax on Consolidated Income, which mainly includes six chapters: General Provisions, Final Settlement Preparations and Filling of Relevant Matters, Processing of and Services for Final Settlement, Tax Refund (Additional Tax Payment), Administrative Measures and Legal Liabilities, and Supplementary Provisions. The Administrative Measures took effect from the date of release.

Source: State Taxation Administration

2. Three Departments Issue Document to Further Promote Customs Clearance Facilitation at Air Ports

【Keywords: Air ports, Customs clearance】

Recently, the General Administration of Customs, the National Immigration Administration, and the Civil Aviation Administration of China issued the Notice on Several Measures to Further Promote Customs Clearance Facilitation at Air Ports, proposing measures such as optimizing and improving the 7x24 customs clearance guarantee system at qualified major air ports in the Beijing-Tianjin-Hebei Region, the Yangtze River Delta, the Guangdong-Hong Kong-Macao Greater Bay Area, and the Chengdu-Chongqing Region.

Source: Customs Release

3. Two Departments Promote High-Quality Development of Green Finance in the Banking and Insurance Industry

【Keywords: Banking, Insurance, Green finance】

Recently, the General Office of the National Financial Regulatory Administration (NFRA) and the General Office of the People's Bank of China issued the Implementation Plan for High-Quality Development of Green Finance in the Banking and Insurance Industry, proposing that within the next five years, a green finance system with sound institutions, effective supervision, leading standards, complete structure, abundant choices of products, and strict risk control will be established to play an important role in optimizing industrial structure, improving environmental quality, and promoting energy transition.

Source: NFRA

【Shanghai】

1. Shanghai Supports Regional Headquarters of Multinational Corporations to Enhance Capabilities

【Keywords: Multinational corporations】

Recently, the General Office of the Shanghai Municipal People's Government issued the Several Measures of Shanghai Municipality to Support Regional Headquarters of Multinational Corporations to Enhance Capabilities, including measures to increase support for R&D activities, support the development of new types of trade, and facilitate the entry and exit of staff of the headquarters. The Measures took effect on March 1, 2025, and is valid until February 28, 2030.

Source:Shanghai Municipal People's Government

2. Shanghai Releases 21 Measures to Reduce Burden on Enterprises

【Keywords: Enterprises, Reduce burdens】

To effectively respond to enterprise demands, boost business confidence, and promote economic recovery, Shanghai will implement 21 measures in five areas this year, including reducing tax and fees, lowering labor costs, cutting energy expenses, reducing financing costs, and optimizing inclusive and prudent supervision. These measures will remain valid until December 31, 2025.

Source: International Services Shanghai

3. Shanghai Unveils Three-Year Action Plan to Comprehensively Promote High-Quality Development of the Tourism Industry

【Keywords: Tourism industry】

Recently, the General Office of the Shanghai Municipal People's Government issued the Three-Year Action Plan to Comprehensively Promote High-Quality Development of Shanghai's Tourism Industry (2025-2027). The Action Plan outlines 21 measures in six aspects, aiming to establish Shanghai as China's premier entry point for inbound tourism, the preferred destination for urban tourism, and a model for integrating cultural experiences with tourism offerings.

Source: International Services Shanghai

4. Action Plan for Building a M&A Cluster in the Hongqiao International Central Business District Released

【Keywords: Hongqiao International Central Business District】

Recently, the Action Plan for Building a M&A Cluster in the Hongqiao International Central Business District was released, proposing 8 key tasks and planning to cultivate 3-5 listed companies or M&A platform companies with global leading capabilities in M&As by the end of 2027, with a total M&A transaction volume exceeding RMB 50 billion.

Source: Shanghai Hongqiao

One Week in Shanghai

【Forum & Exhibition】 

1. Registration Opens for Lingang Special Area's First Chinese Companies High-Level "Going Global" Conference

【Keywords: Chinese Enterprises High-Level "Going Global" Conference】

On March 21, the First Chinese Companies High-Level "Going Global" Conference will be held. With the theme "Special Area Going Global, Shaping A Win-Win World", the Conference is for corporate decision-makers who are planning or expanding overseas business, representatives of institutions that provide cross-border financial, legal, and tax support, industry experts and investors focused on globalization trends, and universities and research institutions committed to international cooperation.

Source:Lingang Special Area Going Global Comprehensive Service Platform

【Competitive Event】 

1. 2025 Shanghai Sailing Open Will Set Sail at Dishui Lake

【Keywords: Sailing Open】

The 2025 Shanghai Sailing Open, with the theme "Shang Fantastic", will take place from March 25 to 30. The competition will kick off at Dishui Lake with an opening ceremony parade along the Hongkou Riverside section of the Huangpu River.

Source: International Services Shanghai

【Culture & Art】

1. 2024 Shanghai Art Museum Directory Released 

【Keywords: Art Museum Directory】

According to the annual update of the art museum directory, as of the end of 2024, the latest version of the Shanghai Art Museum Directory includes 99 art museums. These museums feature distinctive themes and broad cultural vision, continuing to empower Shanghai's urban art ecosystem with fine art.

Source:Shanghai Tourism

【Corporate Activities】

1. Schaeffler Receives Auto Industry Low-Carbon Supplier Evaluation "Five-Star Enterprise" Award

【Keywords: Schaeffler】

Recently, Schaeffler has been awarded the title of "Five-Star Enterprise" in the 2025 Auto Industry Low-Carbon Supplier Evaluation, for its outstanding performance in carbon management and decarbonization actions. This makes Schaeffler the first company in the automotive industry to receive this highest rating.

Source:Shanghai Foreign Investment Association

Q&A

Q1:The head of the Shanghai Intellectual Property Administration answered reporters' questions at a routine press conference held by the China National Intellectual Property Administration in February 2025 — Shanghai is an international metropolis, and foreign-funded enterprises are an important part of Shanghai’s economic development. What progress has been made in protecting the intellectual property rights of foreign-funded enterprises and creating a first-class business environment that is market-oriented, law-based, and internationalized?

A: There are more than 75,000 foreign-funded enterprises in Shanghai, which is a very large number. We always regard strengthening intellectual property protection as an important part of optimizing the business environment, and are always committed to providing equal treatment and equal protection of intellectual property rights of foreign-funded enterprises. We have done the following work.

Firstly, improving the protection system. We have thoroughly implemented local regulations such as the Shanghai Intellectual Property Protection Regulations and the Several Provisions on the Establishment of a High-standard Intellectual Property Protection System in Pudong New Area, Shanghai, and implemented provisions such as greater punitive damages. We have also thoroughly implemented the Outline for Building a Strong Intellectual Property City and the 14th Five-Year Plan, introduced policy measures such as judicial confirmation mechanism for intellectual property mediation agreements, coordination between litigation and mediation of civil disputes, and intellectual property appraisal, and comprehensively strengthened strict and equal protection. Additionally, we have incorporated the exploration of the intellectual property system into the Comprehensive Plan for Aligning with the High-Standard International Trade Rules to Promote High-Level Institutional Opening-up of the China (Shanghai) Pilot Free Trade Zone.

Secondly, strengthening administrative protection. We have continuously increased the protection of intellectual property rights of foreign-funded enterprises. For four consecutive years, we have carried out special campaigns on IP protection of foreign-funded enterprises,  handling 65 administrative adjudication cases of foreign-related patent infringement disputes, and tackling over 1,200 trademark infringement cases involving foreign businesses. We have strengthened cross-regional and full-chain protection and enhanced the intellectual property collaborative protection mechanism in the Yangtze River Delta and 12 provinces and cities. We have further strengthened proactive protection and precise protection, and established and improved the key trademark protection catalogue system. Furthermore, we have built a two-level administrative adjudication system for patent infringement disputes at the municipal and district levels, leveraged the advantages of high efficiency, low cost and strong professionalism of administrative adjudication, and efficiently resolved a number of foreign-related patent infringement disputes. Many foreign-funded enterprises have chosen to resolve disputes through administrative adjudication by our intellectual property bureau.

Thirdly, optimizing protection measures in key areas. In response to foreign-funded enterprises' concerns about the infringement on e-commerce platforms, multiple departments have jointly issued the Opinions on the Work of Intellectual Property Protection in E-commerce in Shanghai, guiding and supporting e-commerce platforms to strengthen industry self-regulation and improve the working mechanism for identifying intellectual property infringements. We have also continuously carried out online monitoring of intellectual property violations. Regarding the issue of intellectual property protection in pharmaceutical procurement, which foreign-funded enterprises are very concerned about, our bureau and the Municipal Medical Insurance Bureau have jointly issued the Implementation Opinions on Strengthening the Protection of Intellectual Property Rights in Pharmaceutical Procurement, introducing an early resolution mechanism for pharmaceutical patent disputes and a corporate self-commitment system to ensure that infringing products are promptly removed from the medical insurance platform. Moreover, we have supported regional headquarters of multinational companies to improve their capabilities, and expedited pre-examination and priority reviews for patents filed by foreign-funded enterprises that meet the requirements.

Fourthly, smoothing communication mechanism. We have timely responded to the concerns of foreign investors and foreign-funded enterprises, strengthened exchanges with foreign intellectual property institutions in Shanghai, held the Shanghai International Intellectual Property Forum every year, timely introduced the latest progress of Shanghai's intellectual property protection work through consulate briefings on Shanghai intellectual property protection and roundtable meetings on intellectual property protection for foreign-funded enterprises, and listened to and coordinated solutions of intellectual property issues encountered by foreign-funded enterprises.

Source:China National Intellectual Property Administration

Expert Perspective

Regulation of Self-dealing by Directors, Supervisors and Senior Managers Under the New Company Law

By Fu Changyu, Jiang Xuan (Zhong Lun Law Firm)

Foreign investment is one of the important forces driving the prosperity and development of China's economy. The five-year transition period for adjustment of corporate governance of foreign-funded enterprises in the Foreign Investment Law of the People's Republic of China has expired in 2025, and foreign-funded companies are now uniformly protected by the new Company Law of the People's Republic of China (hereinafter referred to as the "new Company Law"). In recent years, the fair and efficient resolution of disputes involving foreign-funded enterprises and the stabilization of foreign investment market expectations have become an important call from foreign-funded enterprises and public opinion, and an important direction for judicial policy.

When foreign investors invest in China, they often rely on corporate executives to manage the enterprises they invest in and establish. The provisions of the Company Law on the diligent and fiduciary duties of executives to the company are important legal bases for protecting the rights and interests of foreign investors. The Company Law revised in 2005 and 2018 both stipulated that the directors, supervisors, and senior managers of a company owe fiduciary and diligent duties to the company. Directors, supervisors, and senior managers shall not enter into contracts or engage in transactions with the company in violation of the company's articles of association or without the consent of the shareholders' (general) meeting, and any income obtained by directors, supervisors, and senior managers in violation of this provision shall belong to the company. The restrictive provisions on self-dealing have been fully developed in judicial practice in recent years and have been adopted in the revision of the new Company Law, becoming one of the highlights of the new Company Law.

I. The Fiduciary Duty of Directors, Supervisors, and Senior Managers and the Restriction of Self-Dealing

China's Company Law first clarified the fiduciary and diligence duties of directors, supervisors and senior managers when it was revised in 2005. Article 148, paragraph 1, of the Company Law revised in 2005 stipulates: "Directors, supervisors and senior managers shall abide by laws, administrative regulations and the company's articles of association, and owe fiduciary and diligence duties to the company." Since the previous Company Law did not provide a clear definition of fiduciary duty, judicial practice began to explore continuously, forming a relatively unified understanding, that is, the fiduciary duty of directors, supervisors and senior managers is reflected in self-dealing, competition with the company, company opportunities, management remuneration, etc. Directors, supervisors and senior managers should take measures to avoid conflicts of interest between themselves and the company, and shall not use their powers to seek improper benefits.

Avoiding self-dealing that harms company interests is one of the core requirements of fiduciary duty. Article 61, paragraph 2, of the 1993 Company Law stipulated: "Directors and managers shall not enter into contracts or engage in transactions with the company except as stipulated in the company's articles of association or with the consent of the shareholders' meeting." Article 149 of the Company Law revised in 2005 stipulated: "Directors and senior managers shall not have the following acts: ... (4) entering into contracts or engaging in transactions with the company in violation of the company's articles of association or without the consent of the shareholders' meeting or shareholders' general meeting; ... any income obtained by directors and senior managers in violation of the preceding paragraph shall belong to the company." When the Company Law was revised in 2013 and 2018, the article number was adjusted to Article 148. Article 182 of the new Company Law stipulates that "Directors, supervisors and senior managers who directly or indirectly enter into contracts or conduct transactions with the company shall report to the board of directors or shareholders' meeting on matters related to the conclusion of contracts or transactions, and shall be approved by the board of directors or shareholders' meeting in accordance with the provisions of the company's articles of association."

[To be Continued]