In a fresh bid to attract more quality overseas enterprises, the municipal government of Shanghai has announced new regulations to encourage more multinationals to set up their regional headquarters in the city.
According to the new rules, once a newly registered company, whether focused on investment or management, identifies Shanghai for its regional headquarters, it will get funding from the local government in the start-up period, as well as a preferential rental policy.
Regional headquarters should have comprehensive functions of operation management, capital management, research and development, sales, logistics and support service. Those contributing to Shanghai's economic development will receive special incentives. In addition, senior management of these companies will be granted "honors" by the local government.
The new regulations have cut the residency red tape for employees of companies headquartered in Shanghai. High-level foreign managers will be recommended to apply for the permanent residency status in Shanghai.
Foreign hires of such companies will get preference while applying for work permits. Domestic employees of regional headquarters and R&D centers will get Shanghai hukou more easily.
Liu Jie, an official with Shanghai Headquarters Economy Promotion Centre, told China Daily that by the end of 2007, more than 300 domestically listed companies and 183 multinationals had established their regional headquarters in Shanghai.
Another 165 overseas-funded investment companies and 244 multinationals' R&D centers are located in Shanghai. So far, 10 more multinationals have reportedly been given the official go-ahead to set up their regional headquarters in Shanghai this year.
According to Liu, Shanghai has trumped other mainland cities in attracting regional headquarters of multinationals. However, in a sharp contrast to Hong Kong and Singapore, which are home to 6,000 and 9,000 headquarters respectively, Shanghai still has miles to go.
Although Hong Kong and Singapore have advantages by way of superb investment environments, favorable government policy, high information transparency and tax breaks, Shanghai has its own aces.
It boasts a mature financial market, the most sophisticated infrastructure and a broad consumer base, and is regarded as the ideal place by many multinationals to expand their presence in China, Liu said.
Shanghai is expected to be home to 3,000 headquarters by 2013. Along with big names such as Unilever, GE and Alcatel, which have already set up their regional headquarters in Shanghai, some multinationals are considering shifting their regional headquarters from Hong Kong or Singapore to Shanghai.