Shanghai unveils incentive measures to support MNC headquarters
New policy framework sets targets including establishing 400 regional headquarters with three key functions and increasing the number of global business unit headquarters to over 20 within three years.
Shanghai has announced multiple incentive measures to support multinational companies in establishing and expanding their regional headquarters in the city, as well as to encourage their deeper involvement in building it into a globally influential business hub.
The new policy framework, effective till February 28, 2030, sets targets including establishing 400 regional headquarters with three key functions and increasing the number of global business unit headquarters to over 20 within three years.
How will the new policies support multinational companies, in terms of financially, in R&D and innovation, as well as attracting foreign talent to work in Shanghai? Let's take a look.
Enhancing capabilities and additional new functions of the headquarters
1. Companies that upgrade their China headquarters to Asia-Pacific regional headquarters while incorporating at least two functions will receive a one-time award of 3 million yuan (US$411,813). Global business unit headquarters may be eligible for a larger reward of 10 million yuan.
2. Headquarters that establish new R&D or financial management functions can receive an additional 3 million yuan. The policy also supports high-level business activities, such as global executive meetings and international training programs, with categorized financial incentives.
Enhancing the R&D and innovation functions of headquarters
1. Headquarters recognized as high-tech enterprises or advanced technology service enterprises will enjoy a reduced corporate income tax rate of 15 percent. The policy also encourages headquarters to establish venture capital funds and non-profit basic research science funds.
2. The policy provides funding for collaborative innovation projects between headquarters and universities, research institutions, and enterprises. Headquarters can also receive support from municipal key laboratories, technology innovation centers, and technology service platforms.
3. This policy encourages headquarters to develop open innovation platforms. It enhances support for innovative projects hosted within the platform, and facilitates collaborative platforms for startups, industry-leading enterprises, and related entities.
Enhancing the treasury management functions of headquarters
The policy supports the establishment of treasury centers and cash pools as needed. It encourages banks to gradually automate cross-border fund payment processing and optimize free trade account functions. The policy also supports Shanghai-based banks in further improving cross-border payment efficiency at the headquarters.
Supporting headquarters in developing new trade models
1. The policy includes support for headquarters to develop offshore trade business, bonded maintenance, and cross-border remanufacturing pilot programs. Headquarters that meet the criteria can be included in the Customs "Authorized Economic Operator" (AEO) program, simplifying customs procedures.
2. The policy encourages cross-border e-commerce enterprises to apply to become headquarters. For eligible headquarters, a green channel for cross-border data flow will be established to facilitate cross-border data transmission.
Supporting headquarters in expanding investment
1. The policy further implements the deferred tax policy for reinvestment of domestic profits by overseas investors, thereby expanding headquarters investment.
2. Eligible technical renovation projects within the headquarters can receive funding of up to 10 percent of the project's total investment, with a maximum of 100 million yuan.
Facilitating immigration for headquarters staff
1. The policy offers conveniences for APEC Business Travel Card applications and multi-year, multiple-entry visas for overseas personnel.
2. Simplified work and residence permits are provided for foreign talents, with similar benefits extended to spouses and family members of senior management.
3. The policy provides conveniences such as round-trip visas and airport courtesies for multinational corporation executives attending high-profile business events in Shanghai.
Shanghai authorities will also launch a headquarters evaluation system with dynamic assessment procedures, providing customized enhancement plans for headquarters. Dedicated service personnel will be provided to headquarters, offering targeted services and helping to resolve issues related to cross-regional supervision, rights protection, and other matters.
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