Public Document of Shanghai Municipal Commission of Commerce and Shanghai Municipal Finance Bureau H.S.W.Z. [2018] No. 190

Notice of Shanghai Municipal Commission of Commerce and Shanghai Municipal Finance Bureau on Publishing the Amended Administrative Measures on the Special Fund of Shanghai Municipality for Encouraging the Development of Multinational Corporation Regional Headquarters

To all business management departments and finance bureau in each district,

The amended Administrative Measures on the Special Fund of Shanghai Municipality for Encouraging the Development of Multinational Corporation Regional Headquarters are hereby published and distributed. Please read it carefully and implement these provisions as required.

Shanghai Municipal Commission of Commerce (Sealed)

Shanghai Municipal Finance Bureau (Sealed)

June 27, 2018

Administrative Measures on the Special Fund of Shanghai Municipality for Encouraging the Development of Multinational Corporation Regional Headquarters

Article 1 (Purpose and Basis)

The Special Fund of Shanghai Municipality for Encouraging the Development of Multinational Corporation Regional Headquarters is established in accordance with the Provisions of Shanghai Municipality on Encouraging the Multinational Corporations to Establish Regional Headquarters (H.F.F.[2017] No.9) and Several Opinions on Further Supporting the Foreign-funded Research and Development Center to Participate in the Construction of Technological Innovation Center with Global Influence (H.F.F. [2017] No.79) so as to open further to the outside world, encourage the multinational corporations to establish the regional headquarter and foreign-funded research and development center in Shanghai, encourage the multinational corporation regional headquarters in Shanghai further develop the core business and functions, improve the business capacity, encourage to upgrade the foreign-funded research and development centers to global research and development center and promote the development of economic transition. The Measures are made to regulate the use and management of the special fund and improve the efficiency in the use of the financial fund and provide guidance with the financial fund.

Article 2 (Source of Fund)

The Special Fund of Shanghai Municipality for Encouraging the Development of Multinational Corporation Regional Headquarters (hereinafter called “Special Fund for the Development of Regional Headquarters”) shall mean the subsidy fund allocated by the municipal fiscal budget specifically for encouraging the development of the local multinational corporation regional headquarters and foreign-funded research and development centers. The Special Fund for the Development of Regional Headquarters is financed by both municipal and district finance bureau.

Article 3 (Support Object)

Multinational corporation regional headquarters refer to the sole main office established in Shanghai by the parent company which is incorporated in a foreign country in the form of investment or authorization for the purpose of managing and serving the business entities in more than one country. Multinational corporation shall establish the regional headquarter in Shanghai as a wholly foreign owned investment company or management company with independent legal person qualification.

Foreign-funded research and development center refers to the organization established by foreign investors for the research and development of natural science, research and development in related technological fields and experimental development (including the pilot experiment for research and development activities). The scope of research and development includes fundamental research, application research and product development etc.

Special Fund for the Development of Regional Headquarters provides free financial aid to the multinational corporation regional headquarters and foreign-funded research and development centers satisfying the requirements specified in Article 4.

Article 4 (Standard of the Financial Support)

Financial support to the newly established regional headquarters

Regional headquarters registered and moved to Shanghai in the form of investment company after July 7, 2008 with the paid-up capital of more than 30 million US Dollars and more than ten employees are entitled to the financial support of RMB 5 million Yuan. 40%, 30% and 30% of the subsidy fund will be granted in the first, second and third year. Foreign-funded global research and development centers recognized after October 10, 2017 with more than 100 research and development staff and the independent legal person qualification are entitled to the same subsidy fund.

Rental subsidy

Multinational corporation regional headquarters registered and moved to Shanghai after July 7, 2008 with more than ten employees and paid-up registered capital of more than 2 million US Dollars are entitled to the rental subsidy for three years, if they rent offices for business purpose and the total area of the offices is no more than 1000 square meters. The rental subsidy shall be thirty percent of the rental expenses and the rental subsidy for one square meter shall not exceed RMB8 per day. In case the regional headquarter builds the offices for business purpose, the same rental subsidy applies and the amount of the financial support equals the total amount of the three years’ rental subsidy. Foreign-funded global research and development centers recognized after October 10, 2017 with more than 100 research and development staff and the independent legal person qualification are entitled to the same subsidy fund.

Multinational corporation regional headquarters and foreign-funded research and development centers shall not rent out or sublease the offices or change the purpose of the offices during the term that the rental subsidy is granted; otherwise, the granted rental subsidy shall be returned.

Standard of rewards

Multinational corporation regional headquarters recognized after July 7, 2008 with the paid-up registered capital of more than two million US Dollars and annual turnover of more than RMB500 million Yuan will receive a reward. Regional headquarters with the annual turnover of more than RMB500 million Yuan but less than RMB1 billion Yuan will receive a lump-sum reward of RMB5 million Yuan; regional headquarters with the annual turnover of more than RMB 1 billion Yuan but less than RMB1.5 billion Yuan will receive a lump-sum reward of RMB3 million Yuan; regional headquarters with the annual turnover of more than RMB1.5 billion Yuan will receive a lump-sum reward of RMB2 million Yuan.

The reward will be given in three years according to the proportion of 40%, 30% and 30%.

High level financial support to multinational corporation regional headquarters in Shanghai

Multinational corporation headquarters for Asian market, Asia Pacific Region or bigger region established in Shanghai after January 1, 2012 or the existing multinational corporation regional headquarters upgraded to the headquarters for Asian market, Asia Pacific Region or bigger region after January 1, 2012 with the paid-up registered capital of more than two million US Dollars and no less than 50 employees are entitled to the lump-sum high level financial support of RMB 3 million Yuan, provided that the principal appointed by the parent company and executives performing the functions of headquarters reside in Shanghai for work.

Article 5 (Contribution to the Special Fund)

Startup financial aids, rewards, high level subsidy funds to the multinational corporation regional headquarters and foreign-funded research and development centers are financed by the municipal and district finance bureau. To be exact, forty percent is financed by the Municipal Finance Bureau while sixty percent is financed by the District Finance Bureau. The rental subsidy is fully financed by the District Finance Bureau.

Article 6 (Application documents to be submitted)

Documents to be submitted by the multinational corporation regional headquarters to apply for the startup financial support
Application form for the Special Fund of Shanghai Municipal for Encouraging the Development of Multinational Corporation Regional Headquarters (original)
Approval Certificate of the Company (or the filing receipt), business license (photocopy);
Name list of the official employees who pay the social insurance and employment contract template;
Letter of appointment of the principal of the regional headquarter issued by the parent company;
Approval of the Municipal Commission of Commerce regarding the recognition of the regional headquarters (photocopy)

Documents to be submitted by the foreign-funded research and development centers to apply for the startup financial support
Application form for the Special Fund of Shanghai Municipal for Encouraging the Development of Multinational Corporation Regional Headquarters; (original)
Approval Certificate of the Company (or the filing receipt), business license (photocopy);
Name list of the official employees who pay the social insurance and employment contract template;
Approval of the Municipal Commission of Commerce regarding the recognition of the regional headquarters (photocopy)

Documents to be submitted by the multinational corporation regional headquarters to apply for the rental subsidy
Application form for the Special Fund of Shanghai Municipal for Encouraging the Development of Multinational Corporation Regional Headquarters (original)
Approval Certificate of the Company (or the filing receipt), business license (photocopy);
Name list of the official employees who pay the social insurance and employment contract template;
Letter of appointment of the principal of the regional headquarter issued by the parent company;
Approval of the Municipal Commission of Commerce regarding the recognition of the regional headquarters (photocopy)
Rental agreement or purchase contract of the offices, or the real estate ownership certificate of the self-built offices (photocopy)

Documents to be submitted by the foreign-funded research and development centers to apply for the rental subsidy
Application form for the Special Fund of Shanghai Municipal for Encouraging the Development of Multinational Corporation Regional Headquarters (original)
Approval Certificate of the Company (or the filing receipt), business license (photocopy);
Name list of the official employees who pay the social insurance and employment contract template;
Approval of the Municipal Commission of Commerce regarding the recognition of the foreign-funded research and development centers (photocopy)
Rental agreement or purchase contract of the offices, or the real estate ownership certificate of the self-built offices (photocopy)

Documents to be submitted by the multinational corporation regional headquarters to apply for rewards
Application form for the Special Fund of Shanghai Municipal for Encouraging the Development of Multinational Corporation Regional Headquarters (original)
Approval Certificate of the Company (or the filing receipt), business license (photocopy);
Approval of the Municipal Commission of Commerce regarding the recognition of the regional headquarters (photocopy)
Annual auditor’s report to prove that the annual turnover of the company satisfies the requirement in the reward policy (photocopy)

Documents to be submitted by the multinational corporation regional headquarters to apply for high level financial support (newly established or upgraded regional headquarters)
Application form for the Special Fund of Shanghai Municipal for Encouraging the Development of Multinational Corporation Regional Headquarters (original)
Approval Certificate of the Company (or the filing receipt), business license (photocopy);
Approval of the Municipal Commission of Commerce regarding the recognition of the regional headquarters (photocopy);
Supporting documents of the establishment of the regional headquarters published at the official website of the parent company or the Company;
Name list of the official employees who pay the social insurance and employment contract template;
Letter of appointment of the principal of the regional headquarter issued by the parent company;
Employment certificate of the regional headquarter principal and executives performing the duties related to the functions of headquarters (photocopy). The regional headquarter shall issue the written document to specify the length of service of the principal and executives resident in Shanghai and warrant that the tax is paid during the term of employment;
Rental agreement or purchase contract of the offices, or the real estate ownership certificate of the self-built offices (photocopy);

Application form for the Special Fund of Shanghai Municipal for Encouraging the Development of Multinational Corporation Regional Headquarters is made into five copies while the other documents are made into two copies. All the photocopies shall contain the official stamp of the Company.

Article 7 (Declaration and Approval)

Multinational corporation regional headquarters and foreign-funded research and development centers that apply for the Special Fund shall complete the Application form for the Special Fund of Shanghai Municipal for Encouraging the Development of Multinational Corporation Regional Headquarters (five copies) and submit the supporting documents according to these Administrative Measures. Such application shall be submitted to the district industry and commerce administration authority. The district industry and commerce administration authority, together with the district finance bureau, make the preliminary review on the declaration documents and submit the approved application documents to the Municipal Commission of Commerce. The Municipal Commission of Commerce, Municipal Finance Bureau and the third party for the assessment shall re-examine the documents (or consult the other relevant authority if necessary) to give the final evaluation opinions. If such application is approved, the district finance bureau will appropriate the fund according to the regulations on the centralized treasury payment system. If such application is rejected, the Municipal Commission of Commerce will give a reason.

Article 8 (Appropriation of Fund)

The district finance bureau shall appropriate the fund for the startup financial support, rental subsidy, rewards and high level financial support according to the final opinion of the district finance bureau and the regulations on the centralized treasury payment system. Among which, forty percent of the fund for start-up financial support, reward and high level financial support shall be borne by the municipal treasury and returned to the district treasury at the end of year after the financial settlement between the municipal and district treasury.

Article 9 (Supervision on the Use of Fund)

All the business entities that make the declaration shall be responsible for the accuracy and legitimacy of the declaration documents. The business entities entitled to the special fund shall observe the relevant laws and financial rules. The Special Fund shall be used for specific purpose. It is prohibited to defraud the government of the special fund, retain or embezzle the fund.

The Municipal Commission of Commerce, together with the Municipal Finance Bureau, shall supervise and examine the utilization of the special fund for the development of regional headquarters according to the relevant rules. In case the regional headquarters and foreign-funded research and development centers no longer satisfy the requirements, they will not be entitled to any financial support or preferential policies.

Business entities violating these Administrative Measures shall return the special fund in full and be punished according to the Regulation on the Punishments and Disciplinary Actions for Fiscal Violations (State Council Decree No.427). In case of any serious circumstance or violation against the laws, the concerned personnel or business entities shall be hold responsible.

Article 10 (Supplementary Provisions)

The Municipal Commission of Commerce and the Municipal Finance Bureau reserve the right to interpret these Administrative Measures.
These Administrative Measures take effect since August 1, 2018 and remain effective for five years.

Application form for the Special Fund of Shanghai Municipal for Encouraging the Development of Multinational Corporation Regional Headquarters

To be completed by the Company
Name of the company submitting the application:			Type of Business: □regional headquarter □foreign-funded research and development center
Business address:			Registration date:
Issuing bank:			Bank account:
Legal representative:			Contact person:
Contact telephone:			Fax:
*Startup financial support		Amount of the financial support (RMB10,000):
*Rental subsidy	Leased office area (square meter)				Amount of subsidy (RMB10,000)
	Built office area (square meter)				Amount of subsidy (RMB10,000)
*Reward		Annual turnover (RMB10,000)				Amount of reward (RMB10,000)
*High level financial support		Amount of financial support (RMB10,000)
1. I hereby agree to be responsible for the accuracy and legitimacy of all the submitted documents. 2. I hereby warrant that all the photocopies and duplicates to be submitted are same as the originals. 3. We agree and accept the supervision and inspection of the Municipal Commission of Commerce and Finance Bureau on the use of the fund the implementation of the project. Signature of the legal representative: Company seal: Declaration date:
Comments of the Regulatory Authority
Comments of the District Commission of Commerce				Comments of the District Finance Bureau

Notes: This form is made into five copies. The Municipal Commission of Commerce, District Commission of Commerce, Municipal Finance Bureau and District Finance Bureau and Regional Headquarter shall keep one copy respectively.

Attributes of Information Release:

General Office of Shanghai Municipal Commission of Commerce

Published on June 27, 2018

(Qty.: 50)