By Wang Yanlin | September 25, 2014, Shanghai Daily

MORE than 10,000 companies registered in Shanghai’s pilot free trade zone have put their annual financial reports online while 1,467 companies have the dubious honor of being on a “blacklist” as the first batch to have irregularities in their operations.

The Shanghai Administration for Industry and Commerce’s website has an option for people to inquire about public information of companies registered in the China (Shanghai) Pilot Free Trade Zone.

Entering the name of a company or its registration code will access its credit rating, financial report and other public information.

By yesterday evening, however, 18 companies had already corrected their irregularities, leaving 1,449 companies on the blacklist, with the majority failing to deliver their annual financial reports.

According to the administration officials, this was the zone’s latest move to boost transparency. The FTZ will also strengthen efforts on information disclosure and supervision to prevent potential risks that may arise from policy innovation.

The administration’s data also showed some 12,000 firms have been established in the FTZ since its launch on September 29 last year, more than the number registered in the past 20 years in a bonded area that now forms part of the FTZ.

The surge in company registrations over the course of a year signals entrepreneurs’ enthusiasm to establish a foothold in the 29-square-kilometer zone in Shanghai, lured by promises of free trade, greater financial opening and fewer government controls in business activities.

According to the administration, registered capital for newly established entities in the FTZ as of mid-September has exceeded 340 billion yuan (US$55 billion). More than 40 percent of these new firms have a registered capital of no less than 10 million yuan.

A total of 192 foreign companies were established in August, seven times as many as in the first month after the launch of the FTZ.

Retail firms account for 54 percent of all new firms while the number of financial institutions has risen to 520, including banks, brokerages and investment service firms. The FTZ also boasts 28 commercial factoring firms — which buy account receivables at a discount from companies seeking to meet immediate cash needs — and 303 financial leasing companies, 133 of which are foreign invested.

The Shanghai FTZ has streamlined procedures for business registration for both domestic and foreign firms.

Officials of the FTZ’s administrative committee have advertised that companies can obtain licenses to operate in the zone as fast as four days after applying, compared with an average of 29 days elsewhere in China. Foreign firms are also entitled to the speedy process as long as their business does not fall in the off-limit areas on the FTZ negative list.