Shanghai Municipality, Implementing Opinions on the «Shanghai Municipality, Provisions on Encouraging the Establishment of Regional Headquarters by Multinational Corporations»

1. Financial Assistance and Incentive Rates

(1) Startup assistance: regional headquarters that are registered in, or relocate to, Shanghai on or after July 7 2008, are established in the form of companies with an investment nature and have a workforce of at least 10 persons shall be granted Rmb5 million in startup assistance, which shall be disbursed in tranches of 40%, 30% and 30% over three years from the year following the year of registration in, or relocation to, Shanghai.

(2) Premises lease assistance: regional headquarters of multinational corporations that were registered in, or relocated to, Shanghai on or after July 7 2008, that have a workforce of at least 10 persons and that lease office space for their own use shall be granted assistance for three years at the rate of 30% of a daily rent not exceeding Rmb8/square metre based on an office area not exceeding 1,000 square metres. If such a regional headquarters constructs office space for its own use, it shall be granted one-time funding assistance equivalent to the total three-year amount for premises lease assistance.

During the term of assistance, the regional headquarters of a multinational corporation may not let out or sublet such office space, or change the purpose thereof. If the foregoing provisions are violated by letting out or subletting the office space or changing its purpose, the assistance given shall be returned.

(3) Incentives for regional headquarters of multinational corporations: companies with an investment nature in Shanghai recognised as state-level regional headquarters of multinational corporations on or after July 7 2008 shall be granted a one-time incentive of Rmb10 million the first time their annual business turnover exceeds Rmb1 billion after the year of recognition, or, in the case of those recognised before July 7 2008, the first time their annual business turnover exceeds Rmb1 billion commencing from 2008.

Management companies in Shanghai recognised as regional headquarters on or after July 7 2008 shall be granted a one-time incentive of Rmb5 million the first time their annual business turnover exceeds Rmb500 million after the year of recognition, or, in the case of those recognised before July 7 2008, the first time their annual business turnover exceeds Rmb500 million commencing from 2008.

Companies with an investment nature in Shanghai recognised as regional headquarters on or after January 1 2012 shall be granted a one-time incentive of Rmb5 million the first time their annual business turnover exceeds Rmb1 billion after the year of recognition, or, in the case of those recognised before January 1 2012, the first time their annual business turnover exceeds Rmb1 billion commencing from 2012.

The incentive shall be disbursed in tranches of 40%, 30% and 30% over three years.

(4) Assistance for regional headquarters in Shanghai of multinational corporations the functional level of which is upgraded: Asia regional, Asia-Pacific regional or larger regional headquarters of multinational corporations newly established in Shanghai, that have a workforce of not less than 50 persons and whose legal representative appointed by the parent and the main senior management personnel responsible for the functions of the headquarters are posted in Shanghai to work shall be eligible for Rmb8 million in startup assistance, disbursed in tranches of 40%, 30% and 30% over three years.

Existing regional headquarters of multinational corporations that are upgraded to Asia regional, Asia-Pacific regional or larger regional headquarters, that have a workforce of not less than 50 persons and whose legal representative appointed by the parent and the main senior management personnel responsible for the functions of the headquarters are posted in Shanghai to work shall be eligible for one-time assistance of Rmb3 million.

(5) Assistance for regional headquarters established in the form of companies with an investment nature that carry out an equity reorganisation: following review by the municipal commerce commission, municipal finance bureau and relevant departments, regional headquarters established in the form of companies with an investment nature, that Shanghai wishes to attract on a priority basis, shall be given appropriate assistance for the costs and expenses incurred in connection with an internal equity reorganisation.

2. Source of funds

The Fund of Shanghai Municipality for Encouraging the Development of Regional Headquarters of Multinational Corporations (the Fund) shall be established, and it shall be borne by the financial authorities at the two levels of municipality and district/county.

The Measures for the Administration of the Fund of Shanghai Municipality for Encouraging the Development of Regional Headquarters of Multinational Corporations shall be formulated separately by the municipal finance bureau and the municipal commerce commission.

II. Management of Funds

Companies with an investment nature are encouraged to establish finance companies in accordance with the Measures for the Administration of the Finance Companies of Enterprise Groups to provide centralised financial management services to their investee enterprises in China.

It shall be made convenient for the regional headquarters of multinational corporations to establish unified domestic fund management systems to carry out centralised management of their own funds. Commercial banks are encouraged to provide actively, in accordance with regulatory requirements, the fund settlement agency services required by the regional headquarters of multinational corporations. The regional headquarters of a multinational corporation, the enterprises under its control (or under its management) and a commercial bank may execute a tripartite agreement for the unified management of their internal funds through the bank settlement accounts opened with the bank and its (sub-)branches. Commercial banks shall actively explore intermediary services that satisfy the fund management requirements of regional headquarters of multinational corporations, strengthen the management and control of such business and establish information systems for monitoring and reporting that are suited to such intermediary services, and that accurately and comprehensively reflect the carrying on and the risk position of such business in a timely manner.

The foreign exchange fund operation of the regional headquarters of multinational corporations shall be handled in accordance with relevant foreign exchange control provisions. Qualified regional headquarters of multinational corporations may participate in pilot projects for the centralised management of foreign exchange funds of multinational corporations, overseas disbursement of funds, etc. in accordance with provisions. Relevant departments shall actively explore new measures to further facilitate the fund operations of the regional headquarters of multinational corporations.

Efforts shall be made to leverage fully the advantages of the renminbi by facilitating cross-border use of renminbi by regional headquarters of multinational corporations. A pilot project will be launched to simplify the process for the use by the regional headquarters of multinational corporations of renminbi on the current account. Regional headquarters of multinational corporations are encouraged to carry out the centralised receipt and payment of renminbi on the current account. Support will be given for multinational corporations to establish their renminbi offshore fund settlement centres in Shanghai. The realisation by the regional headquarters of multinational corporations of the centralised management of cross-border renminbi funds will be explored.

III. Personnel Movements

1. Simplified Entry-exit Procedures

(1) Temporary entry

Expatriate personnel of the regional headquarters established in Shanghai by a multinational corporation who are frequently required to enter China for temporary stays may apply for one-year multiple-entry visitor visas. Expatriate senior management personnel and senior technical personnel who are frequently required to enter China for temporary stays may apply for two- to five-year multiple-entry visitor visas under which any stay may not exceed one year.

(2) Long-term residence

(i) The legal representative, general manager, deputy general managers and chief financial officer of the regional headquarters of a multinational corporation may apply for a five-year foreign residence permit; department managers may apply for a four-year foreign residence permit; and general expatriate personnel may apply for a three-year foreign residence permit.

The legal representative, general manager, deputy general managers and chief financial officer of an enterprise with registered capital of at least US$3 million that is subordinate to the regional headquarters of a multinational corporation may apply for a five-year foreign residence permit; department managers may apply for a three-year foreign residence permit.

(ii) The expatriate spouses, parents and children under 18 years of age of the aforementioned expatriate personnel may apply for foreign resident permits of the same length as those of the aforementioned persons.

(3) Permanent residence

The legal representative and other such senior management personnel of the regional headquarters established in Shanghai by a multinational corporation may, in accordance with the Measures for the Administration of the Examination and Approval of the Permanent Residence in China of Foreign Nationals, apply for Alien Permanent Residence Permits on a priority basis.

(4) B-type residence permit

Persons who have studied abroad and become naturalised and who have at least an undergraduate degree or special skills, persons who have studied abroad and other skilled personnel who hold a PRC passport but do not have PRC permanent residence and skilled personnel from the Hong Kong and Macao Special Administrative Regions, from Taiwan and from foreign countries who have been engaged by the regional headquarters of multinational corporations, and accompanying persons, such as their spouses, children under the age of 18 and those currently attending senior high school may apply for a Shanghai Residence Permit (B-type) on a priority basis.

(5) Coming to Shanghai on an urgent basis

A regional headquarters of a multinational corporation in Shanghai may be granted the status of an entity that has completed commercial record filing for visas issued at the port of entry. Foreign nationals that it invites to Shanghai on a temporary basis who, due to urgent circumstances, are unable to apply for a visa at a PRC embassy or consulate in a timely manner, may, in accordance with provisions, apply to the port visa department of the entry-exit control section of the municipal public security bureau for a visa issued at the port of entry.

(6) Application for health certificates

Entry-exit inspection and quarantine departments will provide a green channel¹ for health certificate applications of legal representatives of the regional headquarters of multinational corporations and senior management personnel responsible for headquarters' functions.

(7) Travel to Hong Kong or Macao

Chinese employees of the regional headquarters of a multinational corporation who need to travel to Hong Kong or Macao on business may apply for a multiple exit-entry Hong Kong and Macao Travel Permit.

(8) Travel to Taiwan

Employees with Chinese nationality of the regional headquarters of a multinational corporation who need to travel to Taiwan on business may apply on a preferential basis for a Taiwan Travel Permit for Mainland Residents if they provide a Taiwan entry travel document and an approval document from the Taiwan Affairs Office of the State Council.

(9) Foreign Travel

Employees of the regional headquarters of a multinational corporation who have Shanghai permanent residence and who need to go abroad on business may apply for a passport on the strength of their Shanghai permanent residence document and ID card. Employees of the regional headquarters of a multinational corporation who are from other parts of China and who need to go abroad on business may apply for a passport to the entry-exit control section of the municipal public security bureau in accordance with provisions on the strength of their Shanghai Municipal Residence Permit (skilled personnel attraction type).

2. Simplified employment permit procedures for expatriate personnel

For an expatriate employee of the regional headquarters established in Shanghai by a multinational corporation who enters China on an L, F or X visa and takes up employment in Shanghai, the regional headquarters of the multinational corporation may apply to the municipal human resources and social security bureau simultaneously for a foreigner employment permit and Foreigner Employment Certificate. Foreign senior management personnel and senior technical personnel may apply to the municipal human resources and social security bureau (municipal foreign experts bureau) for a Foreign Experts Certificate.

3. Facilitating attraction of outstanding skilled personnel in China

The competent human resources department and public security department shall facilitate the procedures for a Shanghai Residence Permit for personnel from other parts of China engaged by the regional headquarters established in Shanghai by multinational corporations.

Qualified outstanding skilled personnel from other parts of China who are engaged by regional headquarters established in Shanghai by multinational corporations or by research and development centres with independent legal personality invested in and established by regional headquarters may apply for permanent residence in Shanghai in accordance with the Trial Measures of Shanghai Municipality for the Application for Permanent Residency in Shanghai by Skilled Personnel from Elsewhere.

IV. Facilitation of Customs Clearance Procedures

Customs and the entry-exit inspection and quarantine department shall facilitate the customs clearance procedures for the imports and exports of qualified regional headquarters established in Shanghai by multinational corporations and research and development centres with independent legal personality invested in and established by regional headquarters. The extent of the pilot project for the reform of the inspection and quarantine of biological materials imported by enterprises for their own research and development will be also progressively expanded.

Multinational corporations are encouraged to establish logistics and distribution centres to promote the integration of the logistics of the enterprises forming part of the multinational corporation's group. Qualified regional headquarters of multinational corporations may carry out pre-classification and advance determination of dutiable value procedures for customs clearance purposes. The regional headquarters of a multinational corporation with a reliability rating of A or above may centrally carry out customs procedures with the competent customs of the place where the headquarters is located for the imports of its subsidiaries in Shanghai (with the exception of those goods entering and leaving special supervision zones), and centrally apply to the entry-exit inspection and quarantine department for inspection pursuant to an application. The entry-exit inspection and quarantine department shall carry out examination and approval of the inspection application qualifications of the regional headquarters of a multinational corporation on a priority basis on the strength of its application and consider on a priority basis the raising of its creditworthiness and classification grade. Customs, foreign exchange control, entry-exit inspection and quarantine and other such departments shall continuously provide innovation in regulatory models and explore convenient measures in line with the newest developments in, and requirements of, the logistics operation models of regional headquarters of multinational corporations so as to adjust to the business development of regional headquarters of multinational corporations.

The Implementing Opinions shall be effective as of the date of issuance until June 30 2017.

The Several Implementing Opinions on the «Shanghai Municipality, Provisions on Encouraging the Establishment of Regional Headquarters by Multinational Corporations» (Hu Fu Ban Fa [2008] No.28) issued on November 15 2008 shall be repealed simultaneously

Translator's note

1. A fast-track channel is called a “green channel” in China.