On the basis of the Treaty of Nanking, Shanghai was declared open to foreign trade on November 14th, 1843. Link to Flag Seal Description.

The Shanghai International Settlement's Municipal Council was organized in 1863 following agreement between the American and British representatives in Shanghai to combine those two settlements. The council was then composed of elected representatives of the qualified foreign ratepayers. As the city grew and the population became overwhelmingly Chinese, a minority representation from the Chinese community was added in 1921.

Originally almost wholly British in character, the Municipal Council grew to include members from many nations resident in the settlement. The council functioned from 1863 until Japanese occupation of the International Settlement in December, 1941. The separate municipality was legally abolished with the end of British and American extraterritoriality in January 1943. The Japanese had effectively ended its functions in early 1942 when nationals of beligerent countries residing in both the International Settlement and the French Concession had been interned.

The adjoining French Concession was separately governed with the Consul-General of France at the apex of the municipal administration. Both foreign municipalities maintained separate municipal services. The French Concession was considered French soil leased from the Chinese government. The Concession was allowed to function, under strong Japanese influence, throughout World War II although most non-French foreign residents were interned by the Japanese. The French Concession was abolished in 1946 after the French government ended extraterritoriality in China in exchange for the Chinese armies evacuating Tonkin.

One one the ways the two municipalities financed their activities was licensing the legal sale of opium. Although opium was technically illegal in China is was to be found almost anywhere in pre-1911 China. The trade was legal and sometimes a government monopoly in many of the treaty ports including Shanghai.

An adjunct of the Shanghai Municipal Council was the Shanghai Volunteer Corps. The Shanghai Volunteer Corps (SVC) was established in 1854 by agreement among American, British and French trade delegations and consuls residing in that city. The resultant international defense organization acted as municipal militia for the international community in Shanghai, and eventually had representation from at least twenty nationalities, including a paid Russian contingent.

The French officially withdrew from the SVC when the French Concession was organized.

At different times in its history the corps was headed or advised by a British officer detailed to provide professional guidance to the primarily volunteer organization. Britain also provided some equipment and other supplies on an informal basis. The corps mobilized a number of times, usually in response to riots but sometimes to augment the regular foreign garrisons or expeditionary forces, such as during the Tai Ping Rebellion, 1860-1862, the Boxer Rebellion of 1900, and the external threats of 1927, 1932-33, and 1937-38. When activated in the 1920s and 1930s it had a mobilized strength of approximately 1,600 persons. The Japanese controlled Municipal Council disbanded the corps in 1942 during their WWII occupation of the city.