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10Policie Help Foreign Companies
As 2017 draws to a close, Guangdong provincial government bought us a great news! Guangdong province, China`s manufacturing heartland, has announced new measures to attract foreign investment.
On December 1, 2017, the Guangdong provincial government issued a report delineating 10 policies to expand the province`s openness to foreign investors and foreign capital. The measures include policies to improve Guangdong`s business environment, promote fair competition between foreign and domestic companies, expand market access, and offer investment incentives.
Image: Invest GD
Government's papers are not easy to get the points, here we give interpretations for these 10 policies, go check can you benefit from it!
1. Further expand market access, including relaxing ownership limits and/or operation scope in the following industries:
Special vehicle manufacturing;
New energy vehicle manufacturing;
Ship design;
Regional aircraft and general aircraft maintenance;
Human resources service agencies;
International maritime transport companies;
Railway passenger transport companies;
Construction and operation of gas stations;
Internet service and call centers;
Performance brokerages;
Brokerage, banking, securities, futures, and life insurance companies;
Law firms jointly owned by Hong Kong/Macau investors and domestic investors; and Hong Kong/Macau airlines will be treated as special domestic airlines.
New energy vehicle will be the next important project for the manufacturing industry in Guangdong, and the government is giving more opportunies to foreign companies to take part in some long~term stated monopolized industries, like the finance and banking, China is pressing foreign payment card companies to form local joint ventures for onshore operations. Let's hope it will bring more conveniences to international transactions and foreign currency exchange.
2. Increase the use of financial incentives for foreign investment for the 2017-2022 period, including:
For new projects worth more than US$50 million, replenishment projects worth more than US$30 million, and for multinational or regional headquarters worth at least US$10 million, the provincial government will give financial bonuses worth no less than two percent of the year`s actual investment amount, capped at RMB 100 million (US$15.1 million).
For Fortune 500 companies and leading global companies with actual investments (new projects or replenishment projects) in manufacturing worth over US$100 million in one year, and newly established IAB (new generation of information, automatic equipment, and bio~pharmaceuticals) and NEM (new energy, new material) projects with actual investments of no less than US$30 million in one year, the provincial government will provide financial support on a case-by-case basis.
For multinational or regional headquarters that contribute over RMB 10 million (US$1.5 million) to provincial revenue, 30 percent of the contributions will be awarded to the company in a lump sum payment, capped at RMB 10 million (US$1.5 million).
Local governments can provide other financial incentives based on provincial incentive standards
Guangdong provincial government is encouraging and supporting the development of new industries. Financial incentives are planed to given to industries like new energy, new material, blockchain.
3. Strengthen the use of land security, including land~use incentives for Fortune 500 companies, regional headquarters, and advanced factories.
Foreign companies will have the right to use the state~owned lands. The government can buy the shares and join the operation by offering capital support~their lands! In the long term, government profits may connect to the foreign companies profits.
4. Support innovation and research & development (R&D), including financial support for foreign R&D institutions and encourage participation in the development of public service platforms.
Guangdong provincial government is opening green channels for the medical industry, new medicines which are manufactured in Guangdong and meet China's catalogs on its need will have a chance to be added into the country's social insurance system. For companies in the medical industry, this policy is a key to expand the market and medical graduates are expected to have more jobs in China.
5. Increase financial support, particularly for Fortune 500 companies, global industry leaders, and cross~border mergers and acquisitions.
Multinational corporations are able to setup Non~Resident Account in Guangdong's Free Trade Zone. The capital flows between China and overseas will be more smooth in the transfer.
6. Strengthen personnel support, including incentives and visa conveniences for high-level foreign talent.
High~level foreign talent, are eligible the same rights on education, medical care, housing subsidy and pension as the Chinese citizens. We had an article on the definition of high-level foreign talent and how to be high-level foreign. How to Get High Scores for Work Permit under The New System? Also, you can check the scores here English Version of Chinese Work Permit Scores Calculator Comes! to see whether you meet the "high-level" standard or not.
7. Strengthen the protection of intellectual property rights, including by accelerating the construction of the China (Guangdong) Intellectual Property Protection Center.
It's more than a national policy to provide a safe business environment. In September, China launched its campaign to protect foreign companies, the same month, China Customs started a three~month "Long Teng" action to fight against export copies nationwide. China Customs New Action to Ban Exporting Copies. Since then, we almost hear about China Customs caught export involving in infringement everyday. According to the Chinese work permit system, owing IPRs helps the applicant to get the work permit, they can get 5 extra scores!
8. Enhance the level of investment and trade facilitation, imporve the China Customs working efficiency.
To facilitate cargoes go through China Custom more quickly, China Customs in Shenzhen started to use a machine - FS6000 X-ray scanners to check containers from August. The checking procedure will be applied to more cities and it shows a great improvement in the working efficiency. Also, China Customs' E-port channel encourages companies to finish customs declaration online, to achieve working without paper materials.
9. Optimize the environment for attracting foreign investment in key parks, including implementation of administrative streamlining in eligible development zones and other supportive policies.
Supportive policies like financial incentives to foreign companies five years after they put into manufacture.
10. Improve the use of foreign investment guarantee mechanisms, including setting up a coordinated mechanism to coordinate and solve the key problems that prevent investment in Guangdong.
So far, there are still many constraints for the foreign business to develop in Guangdong due to foreign companies have a lag of receiving effective information from the government. Solving this problem will be an important step for the government to build a better mechanism.
HiTouch Consulting, established in 2009, is dedicated to providing professional business and legal solutions to international and domestic companies.Open Hong Kong Bank Account in GuangZhou,HiTouch can serve you.
