Lin-gang Special Area in Shanghai has unveiled a new policy to support the development of an equity investment cluster. The policy aims to fully leverage equity investment in serving the real economy and promoting technological innovation, accelerate the establishment of a comprehensive financial service system for sci-tech enterprises throughout their lifecycle, and drive the integrated development of innovation, industry, capital, and talent chains in the area.

The new policy applies to equity investment institutions that align with the special economic functions and development direction of the Lin-gang Special Area, serve the construction of equity investment cluster and have completed registration with the Asset Management Association of China, and have sound financial management systems and standardized operations.

The new policy is designed to support efforts in the following areas:

1. Building a high-quality equity investment cluster

- To attract more equity investment institutions, a reward of up to 30 million yuan ($4.2 million) will be offered to those who meet the conditions and complete registration based on their actual fundraising scale.

- For eligible equity investment institutions, a reward of 2 million yuan will be granted to the managing company for every 200 million yuan (or equivalent in foreign currency) invested in non-listed enterprises within 3 years from its establishment date, with a maximum reward of 20 million yuan.

- Equity investment institutions are encouraged to increase investments in seed- and early-stage sci-tech innovation enterprises. Recognized institutions investing in seed- and early-stage sci-tech enterprises for over a year receive up to 10 percent of the actual investment amount as a reward, with a maximum reward of 1 million yuan for a single investment project and up to 10 million yuan annually per management institution.

The seed- and early-stage sci-tech enterprises are identified as those whose duration does not exceed 5 years at the time of investment, whose employees do not exceed 300, and whose total assets or annual sales revenue do not exceed 50 million yuan. In addition, they should align with the strategic emerging and key industries supported and encouraged by the Lin-gang New Area.

- Incentives will be provided to qualified talents in the equity investment field.

- Equity investment institutions are encouraged to participate in the construction of the equity investment cluster in the Lin-gang Special Area to serve the real economy and contribute to sci-tech innovation. For this purpose, a comprehensive reward will be granted to institutions based on factors such as management scale, operating income (including investment returns), job creation, the fostering of a sci-tech financial ecosystem, industry influence, etc.

- The policy provides support for deepening the pilot program for Qualified Foreign Limited Partners (QFLP) and Qualified Domestic Limited Partners (QDLP), encouraging QFLP pilot enterprises to invest in leading and key industries. Successful pilot institutions will get a reward of up to 40 million yuan based on their approved quotas.

2. Building a high-standard investment ecosystem

- The policy emphasizes fully leveraging the sci-tech innovation fund of the Lin-gang Special Area, valuing 20 billion yuan, to guide the development of the high-tech sector.

- It supports the cultivation of various market entities such as angel investment funds, angel investors, and angel+incubation models, encourages angel investment funds to invest in seed- and early-stage enterprises, and supports the development of angel investment associations and provides support for major events and research topics.

- The policy supports primary enterprises in the industrial chain in conducting corporate venture capital (CVC) activities.

- It also supports universities, research institutions, equity investment institutions, and industry associations in hosting specialized and branded conferences, roadshows, and events in the Lin-gang Special Area by providing subsidies for activities based on assessment.

3. Building a high-quality supporting environment

- Facilitating the access of equity investment institutions by streamlining the services for the establishment of such institutions. The handling process will be completed within 7 working days from the date that applicants submit all the application materials needed.

- Setting up a fast-track mechanism for the establishment of an equity investment fund. Qualified fund management companies who apply to establish new equity investment funds will get an approval letter within 5 working days after they provide all the required application materials.

- Supporting the establishment of various S funds and streamlining the procedures for new (relocated) S funds. Provide professional services for fund unit transfers (S units) and subsidize up to 30 percent of the costs incurred during the transfer process.

- Creating a comprehensive service platform for equity investment and encouraging investment institutions and enterprises to use the platform to realize financing matchmaking.

- Enhancing cooperation with internationally renowned venture capital firms to attract high-end talents. Qualified equity investment institutions may enjoy talent-related preferential policies in the Lin-gang Special Area, including services for household registration, housing, resenting, healthcare, children's education, etc.

4. Other matters

Entities and individuals benefiting from the new policy who fail to fulfill obligations or engage in fraudulent activities to obtain benefits will be required to return rewards or subsidies.

All incentive policies require comprehensive review before approval, and the same enterprise shall be given preferential treatment without duplication when enjoying similar support policies.

*The new policy comes into effect upon issuance and is valid until Dec 31, 2026.