The Shanghai Municipal Commission of Commerce and the Shanghai Municipal Bureau of Finance issued the revised Measures of Shanghai Municipality to Manage the Fund for the Development of Regional Headquarters of Multinational Companies on Aug 27.

The measures are effective from Sept 1, 2025, through Aug 31, 2030. The main contents are as follows:

Article 1 (Purpose and Basis)

To accelerate the growth of the headquarters economy and encourage multinationals to enhance their functions and capabilities by establishing or upgrading high-level projects such as regional headquarters and research and development centers, the Fund of Shanghai Municipality for the Development of Regional Headquarters of Multinational Corporations (hereinafter referred to as the Fund) has been established.

This Fund is set up in line with the Regulations of Shanghai Municipality on Encouraging Multinational Companies to Establish Regional Headquarters, the Regulations of Shanghai Municipality on Encouraging the Establishment and Development of Foreign-funded R&D Centers, and the Several Measures of Shanghai Municipality to Support the Enhancement of Regional Headquarters of Multinational Companies.

The policy aims to regulate the use and management of this fund and ensure its effective guiding role.

Article 2 (Fund Source and Sharing Ratio)

The Fund is financed through the government fiscal budget to support the development of regional headquarters, R&D centers, and other projects multinational companies invest in. It is shared between the municipal and district levels, with 40 percent from the municipal budget and 60 percent from districts' budgets.

Article 3 (Eligible Entities and Application Conditions)

The following projects are eligible for support: recognized regional and business unit headquarters of MNCs, global R&D centers, and open innovation platforms that meet specific conditions.

Applicants must:

(1) Be legally established and operational for more than one year.

(2) Maintain good credit standing and not be listed by relevant authorities as a seriously dishonest entity.

(3) And submit foreign-invested enterprise information reports as required.

Applicants must not obtain duplicate financial support for the same matter and must ensure the authenticity, accuracy, and completeness of application materials.

Article 4 (Support Criteria)

(1) Early support subsidy

MNCs' regional or business unit headquarters with a paid-in registered capital of at least $30 million, no fewer than 10 employees, and parent company authorization to manage at least one domestic or foreign enterprise will receive an early support subsidy of 5 million yuan ($700,130).

Global R&D centers with at least 50 dedicated R&D personnel will receive an early support subsidy of 5 million yuan.

Subsidies will be disbursed over three years in a 40-30-30 ratio.

Applications must be filed within three years after being recognized as an MNC's regional or business unit headquarters, or as a global R&D center.

(2) Capability enhancement reward

MNCs' regional or business unit headquarters for Asia, the Asia-Pacific, or wider regions will receive a one-time high-level capability reward of 3 million yuan when they:

• Are authorized by their parent companies to manage at least three foreign enterprises in different countries or regions.
• Undertake at least two functions: R&D, financial management, investment decision-making, procurement and distribution, supply chain management, or shared services.
• Have paid-in registered capital of at least $2 million and employ no fewer than 50 people.
• And have responsible people and other key headquarters management personnel appointed by their parent companies based in Shanghai.

MNCs' regional or business unit headquarters will receive a one-time capability enhancement reward of 10 million yuan when they:

• Are authorized by their parent companies to be upgraded to global business unit headquarters.
• Generate annual operating receipts of no less than 1 billion yuan, accounting for at least 10 percent of the annual global operating receipts of the business unit.
• Have a paid-in registered capital of at least $30 million and no fewer than 80 employees responsible for global business.
• And have the global head, the finance chief, and other key headquarters management personnel appointed by their parent companies based in Shanghai.

(3) Function reward

MNCs' regional or business unit headquarters adding R&D, financial management, or procurement and distribution functions will receive a reward under the three circumstances:

• With R&D included in their business scope, an average annual R&D investment of at least $4 million over the past two years, at least 40 dedicated R&D personnel, and independent R&D achievements and patents authorized in China, they will receive a one-time R&D innovation reward of 3 million yuan.
• Establishing a cross-border cash pool in Shanghai, engaging in activities such as cross-border fund concentration, allocation, receipt and payment, settlement, investment and financing, risk management, and foreign exchange conversion, having been operational for more than one year, and seeing an annual international balance of payments scale of the cross-border cash pool exceeding 3.5 billion yuan and a net cross-border cash inflow, a one-time treasury management reward of 3 million yuan will be granted.
• Undertaking centralized procurement and sales functions with paid-in registered capital of at least $2 million and annual sales of at least 1 billion yuan, they will qualify for a one-time procurement and distribution reward of 5 million yuan, distributed in a 40-30-30 ratio over three years.

(4) Innovation platform reward

Open innovation platforms will receive a one-time innovation platform reward of 3 million yuan when they:

• Employ no fewer than five dedicated personnel responsible for technology, operations, and management.
• And have at least five signed R&D innovation projects that have received angel investment or venture capital, and launched innovative products or reached licensing transfer agreements.

(5) Capital increase reward

MNCs' regional or business unit headquarters investing in projects aligned with the city's industrial development direction through capital increases, with an annual paid-in foreign capital increase of at least $30 million, will receive a one-time capital increase reward of 2 million yuan.

The same project cannot apply for both the capital increase reward and the early support subsidy in the same year.

Article 5 (Management Responsibilities)

The municipal and district commerce and finance departments jointly manage the Fund according to their respective functions.

(1) The Shanghai Municipal Commission of Commerce determines eligible projects and support criteria, organizes applications and evaluations, and conducts performance management and supervision.

(2) The Shanghai Municipal Bureau of Finance assists in fund allocation, performance management, and supervision.

(3) District commerce and finance departments organize applications, conduct preliminary reviews, allocate funds, and conduct supervision and performance evaluation within their districts.

Article 6 (Application and Review Process)

(1) The Shanghai Municipal Commission of Commerce issues an annual notice for applications, specifying requirements.

(2) Eligible entities apply through their district commerce departments with the required materials.

(3) District commerce and finance departments conduct preliminary reviews and forward approved applications to the Shanghai Municipal Commission of Commerce.

(4) The Shanghai Municipal Commission of Commerce evaluates applications, possibly with third-party reviews and on-site verification. It reviews results with the Shanghai Municipal Bureau of Finance, and consults other departments when necessary before confirming the final evaluation.

(5) The Shanghai Municipal Commission of Commerce and the Shanghai Municipal Bureau of Finance notify district commerce and finance departments of the review results.

Article 7 (Budget Compilation Management)

The Shanghai Municipal Commission of Commerce shall, based on budget preparation and the financial settlement management requirements between the municipality and districts, report the preliminary allocation plan for the settlement funds between the municipality and districts for the next fiscal year to the Shanghai Municipal Bureau of Finance during annual budget preparation.

This shall be done according to the final review opinions, in conjunction with the fund management measures and the cost-sharing ratio between the municipality and districts.

After review by the Shanghai Municipal Bureau of Finance, the municipal-level funds will be incorporated into the next year's municipal annual budget following the prescribed procedures.

District finance departments shall, based on the final review opinions, include the municipal and district-level subsidy funds for projects within their jurisdiction in the district-level annual budget.

Article 8 (Budget Execution)

The Shanghai Municipal Bureau of Finance shall notify district finance departments in advance each year of the estimated financial settlement figures between the municipality and districts for the next fiscal year.

District finance departments shall incorporate these figures into their annual budgets as required and accurately record them under the relevant revenue and expenditure categories.

The budget for the relevant funds will be formally issued according to regulations after approval by the Shanghai Municipal People's Congress.

Article 9 (Supervision and Inspection)

The Shanghai Municipal Commission of Commerce and the Shanghai Municipal Bureau of Finance, according to their respective responsibilities, shall oversee the operation of headquarters projects and the use of funds, ensuring that districts use the funds in compliance with regulations.

Article 10 (Performance Management)

The Shanghai Municipal Commission of Commerce, in accordance with the relevant requirements of budget performance management, shall conduct performance evaluations, strengthen the application of performance management results, and promote the improvement of fund allocation efficiency and effectiveness.

Article 11 (Supplementary Provisions)

(1) The Shanghai Municipal Commission of Commerce and the Shanghai Municipal Bureau of Finance are responsible for interpreting this policy.

(2) This policy is effective from Sept 1, 2025 to Aug 31, 2030. The previous policy, Shanghai Commerce Regulation [2024] No 2, is repealed simultaneously.

 

Source: Shanghai Municipal Commission of Commerce

Note: The above content is for reference only. In case of any discrepancies, the Chinese version shall prevail.