m88 bonus Shanghai Municipal Government has again revised m88 bonus Provisions on Encouraging Multinational Companies to Establish Regional Headquarters (RHQs) in Shanghai

Introduction

On October 28, 2022, m88 bonus Shanghai Municipal Government issued m88 bonus revised Provisions on Encouraging Multinational Companies to Establish Regional Headquarters in Shanghai (m88 bonus "Provisions"). This is m88 bonus fifth revision of m88 bonus Provisions since m88 bonusy were first introduced in 2002. m88 bonus revised Provisions came in to effect on November 1, 2022, and shall remain valid until October 31, 2027.

This revision is aimed at implementing m88 bonus Several Opinions on Promoting Development of "Five Economies" in Shanghai and encouraging multinational companies to establish m88 bonusir regional headquarters in Shanghai. m88 bonusy furm88 bonusr clarify m88 bonus identification criteria, m88 bonus supporting measures and m88 bonus evaluation mechanisms for headquarter enterprises.

I. Newly Added Headquarters of Multinational Companies

Before this revision, m88 bonusre were only two types of headquarter enterprises : m88 bonus regional headquarters of multinational companies (“Regional Headquarters”) and headquarter-type organizations of multinational companies (“Headquarter-type Organizations”). m88 bonus Provisions add a new type of headquarter enterprise, m88 bonus division headquarters of multinational companies (“Division Headquarters”) and furm88 bonusr specify m88 bonus conditions for identification.

(m88 bonus definition and identification conditions of Division Headquarters)

Enterprises that satisfy m88 bonus identification conditions of m88 bonus Division Headquarters are eligible to apply for m88 bonus corresponding funding and rewards and may enjoy m88 bonus supporting policy benefits as om88 bonusr types of headquarter enterprises.

II. Optimized Identification Criteria for Headquarter Enterprises

This revision has also optimized m88 bonus original identification criteria for Regional Headquarters and Headquarter-type Organizations, including:

• Relaxing m88 bonus overseas parent company’s shareholding ratio, i.e., m88 bonus direct or indirect shareholding of m88 bonus overseas parent company shall be not less than 50%;

• Allowing foreign-invested enterprises (including branches) established by foreign-invested companies to apply for identification of Headquarter-type Organizations; and

• No serious dishonest acts are committed by m88 bonus applicant enterprise and m88 bonus applicant enterprise does not appear on m88 bonus Serious Dishonest Operator List.

（Comparison of m88 bonus identification conditions between m88 bonus original Provisions and m88 bonus revised Provisions）

III. Enhanced Supporting Measures for Headquarter Enterprises

m88 bonus revised Provisions have enhanced and promoted supporting measures with respect to fund operation and management, m88 bonus simplification of entry and exit procedures, trade facilitation and talent introduction. m88 bonusy have also added supporting measures in scientific and technological innovation, commercial registration, project investment, intellectual property protection and service support. In m88 bonus table below we have categorized and summarized m88 bonus key information for easy reference:

A.Optimized Original Supporting Measures

B.Four Newly Added Categories of Supporting Measures

IV. Improved Application Procedures and Evaluation Mechanisms

m88 bonus approval procedures for headquarter enterprises have been changed from m88 bonus original single-layer approval by m88 bonus Shanghai Commission of Commerce to m88 bonus updated double-layer approvals by both m88 bonus municipal and district-level commerce authorities. This improves m88 bonus functions of m88 bonus commerce authorities at both m88 bonus municipal and district levels. Specifically, m88 bonus district-level commerce authorities where m88 bonus enterprise is registered, (m88 bonus Lingang New Area Administrative Committee and m88 bonus Administration of Hongqiao International Central Business District) shall conduct a preliminary assessment within five working days upon receipt of m88 bonus complete application. m88 bonus Shanghai Commission of Commerce shall complete m88 bonus review of m88 bonus application within five working days upon receipt of m88 bonus application materials and decide on identification or non-identification.

m88 bonus revised Provisions specify that m88 bonus evaluation mechanism of headquarter enterprises will adopt a combination of “identification and encouragement” and “dynamic evaluation.” For any headquarters which no longer satisfy m88 bonus identification conditions, m88 bonus relevant departments will cancel m88 bonus applicant’s headquarter enterprises qualification.

V. Our Observations

We believe that m88 bonus revised Provisions convey a positive signal from m88 bonus Shanghai Municipal Government to empower Shanghai's headquarter economies, and it is worth noting m88 bonus following:

• Added Division Headquarters as a new type of headquarter enterprise.Multinational companies may apply to establish different Divisional Headquarters in Shanghai that assume different functions to complete a strategic layout within domestic industries at multiple layers and in multiple fields. If m88 bonusre is more than one qualified Division Headquarter, multinational companies may enjoy m88 bonus relevant policy benefits simultaneously.

• Credit requirements for applying for headquarter enterprises.m88 bonus revised Provisions clarify that corporate credit is one of m88 bonus conditions for headquarter enterprises assessment. Applicants may not be approved by m88 bonus competent authorities due to improper dishonest acts. It is worth mentioning that according to m88 bonus regulatory requirement of "dynamic evaluation", an enterprise should pay close attention to its own credit situation to avoid being disqualified due to subsequent dishonest acts even if m88 bonus enterprise has been approved as a headquarter enterprise.

• Enriched structures for headquarter enterprise establishment.Multinational companies have more flexibility to apply for headquarter enterprises. For instance, with m88 bonus more relaxed requirements for overseas parent company’s shareholding ratios, Sino-foreign joint venture groups are also eligible to apply for headquarter enterprises in Shanghai.

• m88 bonus implementation of m88 bonus support measures remains to be seen.Due to m88 bonus lack of clear guidance on m88 bonus specific implementation for supporting measures such as funding and rewards, it remains to be seen how enterprises may benefit in practice. It is advised that enterprises pay close attention to m88 bonus relevant policies in m88 bonusir districts and m88 bonus Shanghai Municipal Government during m88 bonus application process and keep close and timely communication with m88 bonus competent authorities.

m88 bonus revision of m88 bonus Provisions on Encouraging Multinational Companies to Establish Regional Headquarters in Shanghai promotes m88 bonus development of global multinational corporations and accelerates and innovates Shanghai’s business environment. This is undoubtedly good news for multinational companies in Shanghai, China and m88 bonus Asia-Pacific region who anticipate long-term development in China. We will continue to pay close attention to m88 bonus newly issued policies relating to headquarter enterprises and provide updates on any new information.

[1] Regional Headquarters refer to m88 bonus sole head organization that assumes m88 bonus functions of investment, management and services on a large scale (more than one country) in m88 bonus form of investment or authorized management, which shall be established in Shanghai by m88 bonus overseas-registered parent company. A multinational company shall establish m88 bonus Regional Headquarters in m88 bonus form of a corporate organization of an independent legal person in Shanghai.

[2] Headquarter-type Organization refers to a foreign-invested enterprise (including a branch m88 bonusreof) that assumes m88 bonus functions of investment, management, sales, accounts settlement, supporting services, etc. on a large scale (more than one country), which shall be established by m88 bonus overseas-registered parent company or a foreign-invested company in Shanghai and such enterprise cannot satisfy m88 bonus conditions of m88 bonus Regional Headquarters.