Navigating the labyrinth of epidemic assistance
Shanghai has rolled out 28 measures to support businesses during the novel coronavirus outbreak. The Shanghai Commission of Commerce has issued an English version for the measures, which can found on its official website http://sww.sh.gov.cn/swdt/247697.htm. To try to put the policies into clearer focus for foreigners, Shanghai Daily collected business-related questions from a survey compiled by China Business Network and news platform Jiemian.
Answers to the questions are divided into five categories:
Supporting companies to combat the epidemic
Alleviating the burden on companies
Financial support for companies
Improving the business climate
Q: Do I have to file an application to resume business operations?
A: No prior approval is required except in the sectors of construction, lifestyle services, culture and entertainment, where coronavirus safeguards must be assessed.
All other companies can submit an online filing on http://zwdt.sh.gov.cn to make an official declaration of specific quarantine measures. Once the application is submitted, businesses activities can resume.
Inquiry line: 021-38919099.
Q: How do we coordinate inter provincial transportation and must employees returning from out of town be put under isolation?
A: Those who have already completed an isolation period in one city are not required to be quarantined again when they enter a different city.
Shanghai is working with authorities across the Yangtze River Delta on a digital health code that can be used across the region.
Q: What measures have been taken to deal with labor shortages?
A: Labor and personnel authorities in the Yangtze River Delta region are canvassing employers for job openings and will release that information online for those seeking work. The city is also encouraging companies to organize chartered bus services to transport migrant workers to and from work.
Q: Are foreign employees eligible to apply for the health QR code?
A: The city allowed foreign citizens and people from Hong Kong, Macau and Taiwan to apply for the health QR code as of March 1. Those who have already completed identity verification by Alipay can apply directly for a health code after submitting personal health information. Residents from Hong Kong, Macau and Taiwan can also register through Suishenban’s app.
Q: What about businesses whose registration addresses and warehouses are located in different districts within the city?
A: The district government of the business registration address bears responsibility for helping those companies resume business operations.
Q: Is business certification of online sales essential when delivering products or services through digital channels?
A: Companies are encouraged to conduct online sales through their own digital platforms or through third-party websites. Certification requirements for products and services remain unchanged.
Q: What are the requirements of epidemic risk assessment for beauty salons and hairdressers?
A: Some 37 specific requirements for beauty salons and hairdressers have been released by the Shanghai Commerce Commission at http://sww.sh.gov.cn/zxxxgk/247825.htm. District governments will supervise businesses to ascertain compliance.
Q: What categories of companies are eligible for rent waivers?
A: Small and medium-sized companies engaged in production and commercial activities, which lease non-residential properties from Shanghai-based state-owned enterprises that include development zones, industrial parks, startup hubs and high-tech incubators. All will have rent for February and March waived.
Q: If property owners are centrally administered state-owned enterprises, private companies, foreign-invested firms or collectively owned businesses, is rent waived?
A: That matter must be negotiated between tenants and the property owners, who are encouraged to waive or reduce rents.
Q: Can property owners that are not state-owned receive tax incentives if they take the initiative to waive or reduce rents for tenants? How can they apply?
A: Yes, they can apply to waive or reduce property taxes and urban land use taxes. Enterprises can apply through online sites of local tax bureaus.
Q: What are the tax incentives and procedures for companies hard hit by the coronavirus outbreak?
A: Businesses involved in sectors such as hospitality, logistics or transport that are hard hit by the outbreak can apply for an exemption of value-added tax of income obtained from January 1. There are no additional approval procedures, but companies should keep files if they are audited.
Q: My company donated 3 million yuan (US$431,820) to a local charity foundation.
Can this amount be deducted from taxation?
Q: My company purchased a batch of medical supplies valued at 1 million yuan for employees. Can this amount be deducted from taxation?
Q: My company is a travel agency and we have very tight cash flow nowadays. Is there any help for us?
A: Yes. Travel agencies that have sound operational track record and creditworthiness are entitled to an 80 percent temporary refund on their deposits through February 5, 2022. They can also apply for targeted loans. The Shanghai Tourism Association has decided to waive its membership fee for the first half of this year.
Q: Is there credit support available for hard hit businesses?
A: Local banks will not cut off loans to companies heavily impacted by the epidemic. That covers tourism, accommodation and catering, wholesale and retail, transportation, logistics and warehousing, culture and entertainment, convention and exhibitions, and other promising sectors with temporary cash-flow pressures.
For companies that have been affected by the epidemic and have loans maturing in the near future, banks must negotiate with customers for revising repayment plans and periods. Banks should extend maturity periods if necessary.
Banking institutions in Shanghai are encouraged to renew loans due before June 30 for up to one year for companies heavily impacted by the epidemic.
Q: What favorable loan policies are available for heavily hit firms?
A: Local banks are required to reduce loan interest rates and handling fees.
Banking institutions in Shanghai are encouraged to reduce or exempt interest for a certain period. Each bank can formulate the detailed rules for specific relief measures.
Q: As a new-energy car company, we are hoping to get a bank loan. It is uncertain whether that will happen. Who can I consult?
A: The list of the key companies related to epidemic prevention and control is being managed by the Shanghai Commission of Economics and Information Technology and the Shanghai Development and Reform Commission.
The list covers seven major categories, including medical production, storage and supply and companies considered the backbone of daily necessities. The list may be adjusted as conditions change.
If companies are on national or Shanghai lists, they may apply for loans from China Development Bank, China Exim Bank, Bank of Shanghai and local branches of top Chinese banks.
Q: What financial policies are in place to support the resumption of work at small and medium-size companies?
A: Banks in Shanghai have been directed to extend credit to them. Corporate financing costs have been further reduced through various means, including special loan refinancing from Bank of Shanghai, Shanghai Rural Commercial Bank, Huarui Bank and local branches of national banks like ICBC and China Post Bank.
Local banks should offer loans with interest rates at least 25 basis points lower than the benchmark rate. The Bank of Shanghai, Shanghai Rural Commercial Bank, Huarui Bank and 14 village banks in Shanghai can provide qualified companies loans with interest rates no higher than 4.55 percent.
Additionally, banks are encouraged to reduce the overall financing costs of small and medium-size companies by 0.5 percentage points.
Q: What funding support is available for asset-light and technology companies?
A: At present, Shanghai has launched several special loans to support innovation and address financing difficulties of high-tech firms without fixed assets. Technology startups, especially those playing important roles in epidemic control, are encouraged to seek a listing on the Shanghai Stock Exchange’s STAR Market.
Q: What about small and medium-sized enterprises that have temporarily lost income sources and are unable to repay bank loans on time?
A: Several methods of assistance are available. The city’s guarantee centers have raised its budget and will guarantee a financing rate for qualified firms. The center, in tandem with partner banks, has established a “white list” database to shorten approval times and streamline the approval process. Emergency applications can be completed within two working days.
Q: What are requirements of the People’s Bank of China’s loan refinancing program?
A: The People’s Bank of China provides low-cost funds to major national banks and some local banks. Companies related to epidemic prevention and control materials, daily necessities and transportation are provided with preferential interest-rate loans.
The central treasury offers 50 percent discount on the interest rate of loans obtained by enterprises.
Q: What’s the refinancing rate?
A: The rate is last month’s loan prime rates minus 250 basis points. The maximum loan interest rate is the one-year prime loan rate minus 100 basis points.
Q: What are the conditions for the use of concessional loans?
A: Loans with preferential rates are offered to the five categories of companies with activities directly related to the prevention and control of the coronavirus. That includes companies actively expanding production capacity of important medical supplies and daily necessities.
Q: Is there any insurance available for companies resuming production?
A: Many insurance companies in Shanghai have launched a series of insurance add-ons to reduce the pressure on companies as they resume operations.
Insurance products that focus on production safety liability insurance, employer liability insurance, business interruption insurance and other risks related to the production safety of companies will be extended to contain the losses caused by the epidemic, with no additional charges.
Q: According to national policy, Shanghai’s small and medium-sized enterprises will be exempt from social insurance from February to June and provident fund contributions can be postponed. However, there is no mention of a social insurance exemption policy in Shanghai’s 28 measures. What’s happening?
A: On February 7, the Shanghai government released its 28 measures. On February 20, the Ministry of Human Resources and Social Security, the Ministry of Finance and the State Taxation Administration jointly issued a notice of phased reduction and exemption of social insurance premiums.
From February 2020, in provinces other than Hubei, small and medium-sized enterprises can be exempted from payment of pension, unemployment and work injury insurance for a period not to exceed five months.
Payment of pension, unemployment and work injury insurance for large enterprises — except for government departments and institutions — can be reduced by half for a period of not more than three months.
At present, Shanghai’s policies on social insurance reduction and exemption are in the process of being formulated and will be released soon.
Q: How will the medical insurance rate of Shanghai employees be adjusted?
A: From February to December 2020, the proportion of employees’ medical insurance, including maternity insurance, paid by companies in Shanghai is lowered by 0.5 percentage points to 10 percent. The proportion of payment for flexible employment medical insurance is reduced from 11.5 percent to 11 percent.
Medical insurance and social security departments are stepping up implementation so that companies can benefit from this policy when they pay social insurance for February.
Q: How can companies affected by the virus apply for online training subsidies?
A: All districts in Shanghai will implement online training subsidies for companies affected by the epidemic.
Companies need to contact human resources and social security departments in their districts to submit applications and sign forms for employees to receive subsidies for participating in the training. Once a course is completed, the company must submit the student list, teaching record certification and bank account information. The subsidies will be allocated within three months.
Q: Is there a special department to provide consulting services for smaller businesses?
A: Such businesses can seek advice from the small enterprise promotion office of Shanghai or the Shanghai Enterprise Service Cloud (http://www.ssme.sh.gov.cn/).
Q: What channels are available for companies to get more information on the 28 measures?
A: Information is available on the official websites of the Shanghai government, the one-stop platform of government services, the Shanghai Development and Reform Commission and the Shanghai Enterprise Service Cloud.
In addition, major media organizations have collated information and are providing details of the policies.
Q: Are applications required to benefit from the government’s 28 measures?
A: Most of the policies do not require applications.
Q: If during the epidemic, a company can’t carry out the terms of its labor contracts or finds itself in a labor dispute resulting from production and operational difficulties, are there legal channels that can help?
A: The Shanghai Bureau of Justice has set up three “green channels” to provide free legal services 24 hours a day, seven days a week. One is a special No. 9 line apart from the usual No. 1 line of the 12348 hotline. The second is the online consultancy column on the bureau’s official website: https://sh.12348.gov.cn/. And the third can be found on the bureau’s WeChat public account.
Q: Are there any free legal services provided for smaller companies heavily impacted by the epidemic?
A: Shanghai Bureau of Justice and the Shanghai Federation of Industry and Commerce will provide free legal services for certain qualified businesses.
In addition, the Shanghai Commission of Commerce provides professional legal information on its official website and WeChat account, drawing on the advice of well-known legal service teams at home and abroad.
Q: What about the costs of notary services?
A: Shanghai’s various notary agencies have pledged to halve notary fees for some services to companies actively involved in epidemic prevention and control.
Q: During the epidemic, can parties file arbitration cases?
A: Arbitration institutions in Shanghai have suspended on-site filing in general but continue to accept online and postal filings.
Q: For cases already filed, will court sessions continue?
A: If an arbitration case has been scheduled for a hearing or court before the outbreak, the secretary handling the specific case will inform parties or agents of the case status. If necessary, disputes may be adjudicated online.