Policies & Measures to Support the Healthy Development of Individual Entrepreneurs in Shanghai
On 26 July, the Shanghai Municipal Office of the Joint Conference on Supporting the Development of Individual Entrepreneurs officially released the “Shanghai Municipal Policies and Measures for Supporting the Healthy Development of Individual Entrepreneurs” (hereinafter referred to as the “Policies & Measures”), which introduced 34 support measures that will benefit more than 500,000 individual entrepreneurs in Shanghai. It will help Shanghai’s self-employed to cope with the impact of the epidemic, resume production and operation in an orderly manner as soon as possible, stabilize and expand employment and accelerate economic recovery and revitalization.
The Policies & Measures include 4 specific measures:
- to reduce the cost of production and operation for individual entrepreneurs
- to strengthen the service guarantee for individual entrepreneurs
- to increase the financial support for individual entrepreneurs
- the fourth is to optimize the business environment for individual entrepreneurs.
In terms of reducing the production and operation costs of individual entrepreneurs, the «Policies & Measures» introduced 16 measures to reduce taxes and fees. Among them, it is proposed that small-scale taxpayers who engage in taxable sales of VAT and whose combined monthly sales do not exceed 150,000 yuan are exempt from VAT. At the same time, the policy of halving the individual income tax of individual is implemented, and the individual income tax is reduced by half on top of the existing preferential policies for the portion of the annual taxable income of individual that does not exceed RMB 1 million.
In terms of strengthening the services and protection for individual entrepreneurs, the Policies & Measures propose to provide special subsidies for individual entrepreneurs to absorb employment, enhance the capacity of public employment services, and optimize the regular service and protection mechanism for individual entrepreneurs. Among them, it is proposed that a one-off employment absorption subsidy of RMB 2,000 per person will be given to self-employed entrepreneurs who, as employers, absorb people who have been registered as unemployed in Shanghai for three months or more or graduates of the 2022 class of colleges and universities in the city, sign an employment contract for more than one year and pay social insurance premiums as required.
In terms of increasing financial support for individual entrepreneurs, the Policies & Measures propose to give full play to the role of monetary policy tools to support and drive the payment of handling fees. It also optimizes credit products and services and strengthens the protection of credit rights and interests. These include guiding commercial banks to make good use of the funds released from the reduction of the deposit reserve ratio to increase credit support for self-employed entrepreneurs. The policy tools, such as refinancing loans to support farmers and small businesses, and loan support tools for small and medium-sized loans for the public, will be fully utilized to guide eligible local corporate banks to continuously increase their credit allocation to individual entrepreneurs.
In terms of optimizing the business environment for individual entrepreneurs, the Policies & Measures propose to enhance the level of convenience in the registration of individual entrepreneurs, further relax the restrictions on the registration of the residence of individual entrepreneurs and explore the implementation of a centralized registration model for individual entrepreneurs with community services. At the same time, it will support the change of operators of individual businesses, support individual businesses to temporarily close their businesses on their own, and fully implement the non-administrative punishment for minor violations in accordance with the law.
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