The pronouncement comes as China moves to entrench its presence in the vital waterway, such as reclaiming islands in archipelagoes also claimed by other governments and running holiday cruises to these island chains.
Feng Wenhai, deputy mayor of Sansha city, said the 16 firms have registered themselves in the city amid its drive to position itself as an offshore registration jurisdiction, reported China News Service and Xinhua news agency. The reports did not name the companies.
A total of 157 firms with a combined capital of over 3 billion yuan (US$435 million) have registered on Sansha and paid over 1.53 billion yuan in taxes, Feng was quoted as saying at a meeting of the local people’s congress on Tuesday.
The companies operate in a range of sectors, including agriculture, tourism, aviation, transport and culture, the reports said.
Major Chinese banks, such as the Industrial and Commercial Bank of China and the Bank of China, have also opened branches on the island, the reports said.
Sansha city was established in 2012 on the 2.1 square kilometer Woody Island in the Paracels. Through Sansha, China administers the Xisha (Paracels), Zhongsha (Macclesfield Bank and Scarborough Shoal) and Nansha (Spratly) island chains, parts of which are occupied or claimed by Vietnam, the Philippines, Taiwan, Malaysia and Brunei.
China lays claim to almost all of the South China Sea and rejects the findings of an international tribunal in July that invalidated those claims. Since 2012, China has built roads, a hospital, a school, water treatment plants and other facilities on the islands.