Investment Incentives

Shanghai Investment Promotion Authorities and Incentives

Every region in China, including Shanghai, has government run investment promotion authorities that promote trade and foreign investment in the Shanghai region.  While the Ministry of Commerce of the People’s Republic of China (also known as MOFCOM) has authority for investment in greater China, it can be very helpful to reach out to similar agencies at the local and provincial levels as these organizations possess intimate local market knowledge.  Many regional authorities will also offer additional incentives to foreign companies looking to invest in specific industries.

Shanghai is basically equal to a province, possessing its own “provincial government.”  Shanghai has 18 county-level divisions, including Pudong New Area which Understand China covers in a separate section.

Type Agency Name & Link
National Ministry of Commerce of the People’s Republic of China (MOFCOM)
Municipal Shanghai Foreign Economics and Trade Commission
Shanghai Investment Incentives
Incentive Type Description
Investing in the Waigaoqiao Free Trade Zone National All imports and exports from the WFTZ are exempt from customs duty and value-added tax.
Computer Technology Enterprise City Extensive incentives are available for companies investing in R&D, or in the Software Development, Integrated Circuit Chip Manufacturing and  Information Security Industries
New and Advanced Technology Enterprise City Shanghai Government offers tax subsidies and monetary awards/funding for: investment by private equity groups with over 70 percent of total capital in Shanghai advanced technology industry
Establishing Headquarters or Regional Headquarters City As an incentive to relocate a company’s headquarters to Shanghai or establish a regional headquarters, the municipal government offers significant subsidies provided the regional headquarters meets the following criteria: total net assets of the parent company greater than USD 400 million, an investment in China greater than USD 30 million, and an already established multi-national network.
Priority Industries City Significant subsidies and investment incentives for  “priority industries”: information and consultation services, real estate development, design, and construction, distribution, foreign trade, logistics and transportation, iron and steel manufacturing, automobile, shipbuilding and equipment manufacturing, and chemical/petrochemical industries.

Important Note: Many incentives must be repaid at the provincial and/or city level in the event that the company leaves the region. National incentives are not typically subject to these restrictions.

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