The Huangpu district government of Shanghai has introduced a series of policies to encourage multinational corporations to set up regional headquarters in the district. This section outlines the capital increase rewards available under these policies.

1. Who is eligible?

The capital increase reward is available to the following entities, recognized by the Shanghai Municipal Commission of Commerce and established in Huangpu district:

- Regional headquarters of multinational companies

- Business unit headquarters of multinational companies

Applying enterprises must meet the following criteria:

(1) The company must be legally established in the district/city and have been in continuous and normal operation for at least one year.

(2) The company must contribute to certain economic and social benefits. (Municipal requirement)

(3) The company must have good financial and tax credit standing, with a sound financial management system. It must not be blacklisted for dishonest practices by authorities at national, provincial, or municipal levels, and there should be no records of serious credit violations within the past three years on the Shanghai Public Credit Information Service Platform.

(4) Companies penalized for significant production safety incidents within the two years prior to the application are not eligible to apply. (District requirement)

(5) The company must submit the required information reports for foreign-invested enterprises in accordance with regulations.

(6) The same project or matter cannot be used to apply for government financial support multiple times.

(7) The applicant is responsible for the truthfulness, accuracy, and completeness of the application materials.

Note: Unless specified, the requirements apply to both municipal and district-level rewards.

2. What are the requirements?

The capital increase must be directed toward projects that align with the city's industrial development priorities, excluding those in the real estate, finance, and quasi-finance sectors.

Applying enterprises must provide a written commitment not to reduce capital, withdraw capital, or convert to domestic capital within three years.

3. What is the amount of the reward?

For annual additional actual foreign investment of $10 million or more, a one-time reward is provided as specified in the table below:

Notes:

(1) For a specific amount of capital increase, the reward can only be claimed once.

(2) This reward can only be claimed once during the implementation period of these rules.

(3) The capital increase amount is based on actual foreign investment statistics reported to the Ministry of Commerce within one calendar year.

(4) Enterprises must apply for the reward in the year following the capital increase.

(5) Simultaneous applications for both the capital increase reward and the establishment funding are not allowed within the same year.

4. How is the reward disbursed?

The reward is paid out as a single lump sum.

5. How is the cost of funding shared?

The cost of the municipal level reward is shared between municipal and district finances, with 40 percent covered by the municipality and 60 percent by Huangpu district.

The cost of the district-level reward is fully borne by Huangpu district.

Regulatory basis

(1) Measures for Managing the Fund Dedicated to the Development of Regional Headquarters for Multinational Corporations in Shanghai (Effective from Feb 1, 2024 to Jan 31, 2029)

(2) Implementation Rules for the Fund Dedicated to the Development of Regional Headquarters for Multinational Companies in Huangpu District (Effective from May 10, 2024 to May 9, 2029)

Sources: shanghai.gov.cn, shhuangpu.gov.cn

Note: The English version is for reference only; the official Chinese document shall prevail.