Restrictions on Foreign Investors Equity Ownership Threshold in E-Commerce Business Lifted in Shanghai Free Trade Zone

March 6, 2015

By: Greg Pilarowski

On January 13, 2015, the Ministry of Industry and Information Technology (工业和信息化部) (“MIIT”) issued a “Notice on Lifting Shareholding Restrictions on Foreign Investors for Online Data and Trade Processing Businesses (E-Commerce Businesses) in China (Shanghai) Free-Trade Pilot Program (关于在中国(上海)自由贸易试验区放开在线数据处理与交易处理业务(经营类电子商务)外资股权比例限制的通告)”[1], which allows a wholly foreign-owned entity access into the online data and trade processing services (i.e., operating e-commerce businesses) in the Shanghai Free Trade Zone (“FTZ”).  Such services also include operating online platforms to sell third party goods. Previously, the maximum threshold for foreign investment in businesses providing these services from the Shanghai FTZ was 55%.[2]

[1] See MIIT website for reference.