Shanghai Free Trade Zone to establish wholly foreign-owned travel agencies
China (Shanghai) Pilot Free Trade Zone was officially approved to let foreign-owned travel agencies carry out pilot outbound travel business.
It was reported on September 18 that China (Shanghai) Pilot Free Trade Zone was officially approved to let foreign-owned travel agencies carry out outbound travel business in a pilot scheme.
Wholly foreign-owned travel agencies intending to offer outbound tourism business in the zone have to meet the following criteria: they must be registered in the China (Shanghai) Pilot Free Trade Zone; the capital of the companies must be from Hong Kong and Macao and they must have obtained travel agency operating licenses for at least two years; they have no records of infringing the legitimate rights and interests of tourists and have operated domestic and inbound tourism business to a certain scale.
In implementation, the Shanghai Municipal Tourism Administration (SMTA) will examine and verify the foreign-owned travel agencies applying for the pilot outbound tourism business and then submit the qualified ones to the China Nation Tourism Administration (CNTA) for approval. Beijing Business Today reported that no more than three travel agencies will be approved for the pilot run and the deadline for submitting applications to SMTA is December 31, 2019. The candidates approved by CNTA will receive official licenses to run pilot outbound travel business for three years.
This pilot project is a further relaxation of travel agency operation under the China (Shanghai) Pilot Free Trade Zone Overall Plan, which already allows qualified Sino-oreign joint venture travel agencies to run outbound travel business (excluding Taiwan tour) since 2013.
As foreign-owned travel agencies have an edge in travel resources overseas, allowing them to offer outbound travel, which offers greater profitability, will leave a certain impact on domestic enterprises. A person in charge of the Supervision & Administration Department of CNTA said that the pilot scheme would demonstrate the advantages of the FTZ pilot system, and produce viable and replicable experiences on how foreign-owned travel agencies operate outbound tourism, so as to further reform and open up the tourism sector.