Attracting Foreign Investment and Talent – 2023 Initiatives of Shanghai Municipal Government (Section 2)
In this article, we will continue to introduce each of these measures to foreign investors or interested readers.
«Shanghai Municipality to increase the attraction and utilization of foreign investment measures»
Authority: Shanghai Municipal People’s Government
Symbol: No. 11 
Issued date: 04-03-2023
Effective date: 04-06-2023
- Promoting High-Level Opening-Up – Focusing on Key Areas and Regions to Enhance the Level of Opening-Up
- Promote the openness of more areas and the landing of projects. Supporting eligible foreign-funded securities, funds, futures, life insurance, pension management, wealth management and finance companies to take the lead in settling in Shanghai and expanding their business scope. Actively strive for the early and pilot implementation of measures to expand liberalization in the fields of telecommunications, Internet, education, culture and healthcare in the city.
- Supporting key regions to take the lead in opening up to the outside world. Benchmarking against high-standard international economic and trade rules, such as the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) and the Digital Economy Partnership Agreement (DEPA), Shanghai will take the lead in promoting systematic opening-up in terms of rules, regulations, management and standards.
- Upgrading the capacity of introducing foreign investment – Improving the quality of utilized foreign investment by supporting and guiding foreign investment in high-end manufacturing, modern services, high-tech, energy-saving and environmental protection industries.
- Optimize the industrial structure of foreign investment. Implementing the «Catalogue of Industries for Encouraging Foreign Investment (2022 Version) », guiding foreign investment to invest more in advanced manufacturing, modern services, high-tech and energy-saving and environmental protection, and enjoying the preferential policy of exempting tariffs on imported equipment for self-use. Encourage foreign capital to give full play to the advantages of capital and technology, and increase investment around the three leading industries of integrated circuits, biomedicine and artificial intelligence and the six key industries of electronic information, life and health, automobiles, high-end equipment, advanced materials and fashionable consumer goods, as well as the new track industries and future industries.
- Supporting foreign-funded headquartered enterprises to improve their quality and capacity. Vigorously attracting foreign capital to set up multinational regional headquarters, business division headquarters, trade headquarters and other types of headquarters-type organizations in Shanghai, and eligible headquarters enterprises can enjoy subsidies and incentives in accordance with laws and regulations.
- Promoting the accelerated development of foreign-invested R&D centers. Foreign-invested enterprises can enjoy pre-tax deduction for qualified R&D expenditures, and enjoy tax exemptions and preferential policies for purchasing equipment in accordance with the regulations.
- Encourage foreign investment to participate in the construction of Shanghai’s international consumption center city.
- Accelerating green and low-carbon upgrading. Implementing preferential policies such as accelerated depreciation of fixed assets, reduction and exemption of corporate income tax for energy-saving and water-saving special products, equipment and projects, and immediate refund of value-added tax on comprehensive utilization of resources products.
- Increase support for foreign investment development factors – Propose support or facilitation initiatives around fiscal and taxation, finance, personnel exchanges, import and export, etc., to promote the landing of foreign investment projects.
- Strengthening the service guarantee for the landing of foreign investment projects. Facilitate the approval and filing of foreign investment projects, environmental assessment, logistics, cross-border funds collection and payment, and entry and exit of personnel, so as to promote the accelerated landing, construction and commissioning of a number of major and key foreign investment projects.
- Increase financial and tax support for the landing of foreign investment projects. Implement the policy of temporary exemption of withholding income tax on direct investment by foreign investors with distributed profits, and provide incentives to foreign-invested enterprises, new foreign-invested projects, and profit reinvestment projects of foreign-invested enterprises that are in line with the city’s industrial development orientation, in accordance with their comprehensive economic and social contribution to the region.
- Strengthening financial support services. Support qualified foreign-invested enterprises to list on the Shanghai, Shenzhen and Beijing stock exchanges.
- Facilitating cross-border investment and financing. In-depth implementation of the Qualified Foreign Limited Partnership (QFLP) pilot, citywide pilot to broaden the foreign investment channels of the QFLP fund, simplify foreign exchange registration, implement balance management, and support the direct domestic-related investment with the foreign RMB collected.
- Facilitating the movement of foreigners. Further expanding the scope of recognition of foreign high-end talents (category A) and foreign professionals (category B), and providing entry and exit and residence facilities for executives of foreign-invested enterprises, foreign technicians and their family members.
- Supporting foreign-invested enterprises to upgrade their trade capacity.
- Optimization of Foreign Investment Services – Focuses on strengthening investment promotion services, protecting legitimate rights and interests, and creating a good investment environment.
- Organize a series of investment promotion activities. Playing the role of investment promotion on important platforms such as Shanghai Fair, China International Industry Fair and World Conference on Artificial Intelligence, we will promote more exhibitors to become investors by gathering business with exhibitions.
- Strengthen the “go out” overseas investment.
- Deepening the communication service mechanism between government and enterprises. With regard to policies of concern to foreign-invested enterprises, the relevant municipal departments and districts should organize and carry out interpretations and explanations, and open up the “last kilometer” of policy propaganda and implementation.
- Improving the construction of foreign-related service platforms. It has enriched the contents of the special window for foreign-related services in the “GOVERNMENT ONLINE-OFFLINE SHANGHAI (“一网通办” in Chinese)”, and realized the function of online processing of high-frequency matters such as entry and exit of foreigners and work permits in both Chinese and English. New information and guidance services in English and Chinese have been added to the “SuiShenBan (“随申办” in Chinese)” section for the opening and operation of foreign-invested enterprises and the compilation of policies, and the content of the e-book “Shanghai’s Foreign-Related Services” has been perfected.
- Protecting the legitimate rights and interests of foreign-invested enterprises. All relevant departments and districts shall not discriminate between products produced and services provided by foreign-invested enterprises in China in government procurement activities, and shall guarantee equal participation by foreign-invested enterprises in government procurement.
- Enhancing the level of intellectual property protection. It has fully implemented a punitive compensation system for intellectual property infringement, continued to carry out special remedial actions against patent infringement, Internet piracy infringement, trademark registration in bad faith and counterfeiting and confusion and other intellectual property infringement violations, and promptly referred those suspected of committing crimes to the public security authorities.
- Supporting participation in standardization work. Promote equal participation of foreign-invested enterprises in the formulation of local standards and group standards in accordance with the law. Publicize information on the formulation of local standards in accordance with the law.
In fact, as early as May 31, 2022, the State Administration of Taxation issued «Tax Policy Guidelines on Stabilizing Foreign Trade and Stabilizing Foreign Investment» including 44 clauses, encompassing the tax policy for exporting goods and labor services / VAT policy for cross-border taxable acts / tax policy for new business forms in foreign trade / tax policy for the facilitation of export tax rebate (exemption) services / tax policy for encouraging foreign investment and tax policy for supporting the opening up of financial markets to the outside world.
The two policies released by the Shanghai Municipal Government Office are based on this, combined with the direction and needs of Shanghai’s development, in order to encourage foreign investors to attract investment in Shanghai.
If you want to invest and set up a company in Shanghai or want to know more information, please feel free to contact us.