Expansion of expats' individual income tax policy suggested
Shanghai's attractiveness for foreign businesses and its ability to retain top overseas talent turn out to be among the key topics during the ongoing plenary session of the 16th Shanghai People's Congress.
Local lawmakers proposed the expansion of preferential individual income tax benefits for foreigners to areas outside the free trade zone to further enhance the charm of Shanghai's business environment.
The latest study released by the Foreign Talent Research Center of the Ministry of Science and Technology in November last year saw Shanghai rank in the second place behind Beijing in terms of attractiveness for foreign talent, while Guangzhou settled at third place.
The Guangdong-Hong Kong-Macao Greater Bay Area has spared no efforts to attract overseas talent with a series of incentives to enhance overall science and innovation capabilities.
Xu Wei, a SPC deputy of Fengxian District, said that limiting the preferential policy for only those in the FTZ does little to bring in and retain top talent and invite more foreign investment to the city.
Shanghai currently has around 59,000 active work permits for foreign talent and around 17,000 of them are designated for high-end talent.
Shanghai was already home to 956 regional headquarters of multinational corporations and 561 foreign-invested research and development centers by the end of 2023.
As part of Shanghai's task to foster science and technology innovation, it would step up efforts to cluster strategic science and technology professionals and high-caliber talent from overseas and top-tier teams, according to the latest government work report.
Currently only foreign talent in a selected number of pioneering industries in the Lingang Special Area of the China (Shanghai) Free Trade Zone are eligible for the preferential benefit.
Xu said that foreign talent in more areas were supposed to be eligible for the preferential benefit such as those working at major municipal industrial parks, and the Lujiazui Finance and Trade Zone.
The scope could also be expanded to not only foreign nationals but also those who qualified for Hong Kong's top talent scheme, as well as permanent residents of Hong Kong and overseas countries.
The implementation for preferential tax policies all across Shanghai would increase the city's attractiveness to foreign investment and allow multinational enterprises in the city to achieve further development, and eventually promote Shanghai's economic development, Xu added.
