Shanghai has updated its guidelines for the use and management of service sector development funds to support investment and foster innovation in the service industry.

A significant change involves lowering the threshold for key projects. Previously, projects required a minimum total investment of 10 million yuan ($1.4 million) to qualify.

This has now been reduced to 5 million yuan, broadening access for human resources, legal, accounting, and other asset-light professional service sectors.

The threshold for the major demonstration projects, which support large-scale initiatives with advanced technology or innovative models, remains at 30 million yuan.

The municipal-level fund provides up to 6 million yuan for a major demonstration project and covers a maximum of 20 percent of the costs for key projects, capped at 3 million yuan.

District-level governments are required to provide matching funds, generally at a 1-to-1 ratio, though Jinshan, Fengxian, and Chongming districts may offer a 1-to-0.5 match.

The fund prioritizes digital transformation and emerging sectors, targeting critical areas such as digital platform development, AI technology upgrades, and data analytics.

Support covers equipment procurement, software development, technical training, research and development testing, and system integration.

The guidelines also encourage clustering by supporting service industry parks to enhance resource sharing and collaborative development.

The application process remains structured, with districts responsible for initial acceptance and screening. Shortlisted projects are submitted to the municipal review panel by March 31 and Aug 31 annually.

Funding is disbursed in phases, with up to 40 percent provided upon approval and the remainder paid after project completion and acceptance.

Post-funding supervision requires quarterly progress reports from recipients and mandatory project completion acceptance within one year after construction ends.

Strict measures address violations, including repayment of funds and a three-year ban on fraudulent applications.

The measures take effect from Nov 1, 2025, and will remain in force until Oct 31, 2030.

Source: Shanghai Municipal People's Government