City releases supportive measures for regional headquarters of MNCs
Shanghai is to adjust the standards for defining the regional headquarters of multinational corporations to encourage their development and aggregation.
At a press conference on Tuesday, the city government said it was introducing a new series of 30 supportive measures to go into effect on September 1.
The aim is to further expand opening up, improve the quality and level of the utilization of foreign investment, and accelerate the cluster development of functional organizations.
For instance, the city will ease standards for defining regional headquarters of multinationals in three aspects: lowering the requirement for total assets of the parent company to US$200 million (for organizations acting as headquarters, the requirement was reduced to US$100 million); removing the restrictions on actual registered capital and the number of authorized management organizations of regional headquarters; and canceling the current restriction that regional headquarters and organizations acting as headquarters of multinationals must be wholly foreign-owned enterprises.
Meanwhile, Shanghai will improve investment convenience for multinational corporations, relaxing the conditions for foreign investors in establishing investment companies. The threshold of the total assets for foreign investors in the year before the incorporation application will be lowered to US$200 million, while restrictions on the actual registered capital and number of invested companies will be removed.
The city will also give more freedom and convenience to multinationals in the use of funds with 13 new supportive measures.
Regional headquarters and organizations acting as regional headquarters may conduct the centralized operation of cross-border funds through the primary multi-currency (including yuan) account of domestic funds, and cross-border transactions are encouraged to be settled in yuan.
There will be no restrictions on the number of cooperative banks for cross-border capital pool business and the number of the primary domestic capital accounts.
The city will also support qualified regional headquarters and organizations acting as regional headquarters to finance by issuing bonds and stocks, or to enter Shanghai's gold market and conduct gold business.
There are also measures on improving convenience for regional headquarters of multinational corporations in trade and logistics. For instance, the chain enterprises affiliated to regional headquarters (or organizations acting as regional headquarters) in some pilot areas may share the same business license with multiple business addresses.
As for research and development, the city will strengthen the administrative protection of intellectual property and optimize the service system.
Support facilities for regional headquarters will also be further improved.
From January to July this year, Shanghai has seen the establishment of 26 new regional headquarters and nine new research and development centers of multinational enterprises, data from the city’s commerce commission showed.
The commercial services sector has posted actual foreign investment reaching US$3.325 billion with regional headquarters as the main source, accounting for nearly one third of the total, making it the city's largest area for utilizing foreign investment in the first seven months.
By the end of July, Shanghai had attracted 696 regional headquarters and 450 research and development centers of multinational companies. To date, there are more than 700 regional headquarters of multinational companies in the city, according to Yang Chao, deputy director of the commerce commission.