Qianhai District in Shenzhen City is set to increase the incentives for foreign enterprises. On March 19th, according to the new rules for rewarding foreign-funded enterprises by the Authority of Qianhai Shenzhen-Hongkong Modern Service Industry Cooperation Zone of Shenzhen, Qianhai plans to reward non-financial foreign-funded enterprises that have newly utilized actual foreign investment of no less than 30 million US dollars in the previous year, with a reward equivalent to 1.5% of the actual foreign investment amount for the year. This represents an increase of 0.5 percentage points compared to the previous ratio. However, the real estate industry is not included in the scope of the incentive policy.
The newly introduced incentive measures cover the entire expanded Qianhai Cooperation Zone and are exclusively applicable to foreign-invested enterprises operating within the cooperation zone. Qualified enterprises are required not to be involved in the real estate sector nor to be identified as serious credit defaulters.
Compared to the previous policy, the new one boasts two key highlights. Firstly, it increases the level of rewards and subsidies. The minimum standard for foreign-funded enterprises to enjoy Qianhai foreign investment incentives remains the utilization of actual foreign investment of no less than 5 million US dollars in the Qianhai Cooperation Zone in the previous year. Specifically, if the new investment from financial companies is no less than 5 million US dollars, a reward equivalent to 1% of the actual foreign investment amount for the year will be given. For non-financial enterprises, if the new investment is no less than 5 million US dollars, a reward equivalent to 1% of the actual foreign investment amount for the year will be given; if the new investment is no less than 30 million US dollars, a reward equivalent to 1.5% of the actual foreign investment amount for the year will be given.
Eligible foreign-funded companies are rewarded with a maximum annual amount of 30 million yuan per enterprise. It is important to note that the rewards should not overlap with those of similar policies in Nanshan District and Bao'an District. However, for foreign-funded companies that are key targets for the Qianhai Authority and play a pivotal role in promoting foreign investment utilization in the zone, support can be provided through individual negotiations.
Secondly, the policy services in Shenzhen have been optimized. The city has implemented multiple incentive policies that are automatically available to businesses without the need for application. The Qianhai rewards, which are specifically designed for foreign-funded enterprises, have also been optimized to follow this model. Specifically, the Qianhai Authority will calculate the amount of rewards and subsidies based on the actual foreign investment data of the Qianhai Cooperation Zone exported from the business system of the Ministry of Commerce of the PRC. After confirming the accuracy, the Qianhai Authority will notify the enterprises through the Qianhai policy and reward application platform and distribute the rewards according to the established procedures. This will reduce the burden on enterprises in terms of material submission and minimize the risk of underreporting by enterprises.
The policies will apply to enterprises from Hong Kong, Macao, and Taiwan. The Qianhai Authority stated that the new rules for rewarding foreign-funded enterprises will be implemented from March 25th, 2024, with a validity period of three years. As an important measure to implement the Plan for Comprehensive Deepening Reform & Opening Up of the Qianhai Shenzhen-Hong Kong Modern Service Industry Co-operation Zone, this move will further promote the stability, expansion, and improvement of foreign investment, and support the development of foreign-invested enterprises in Qianhai.
Editor: Teresa Chen
