Interpretation of Revised Edition of Policies and Measures of Guangdong Province on Further Expanding Opening-up and Actively Attracting Foreign Direct Investment

A map of Guangdong province and the major cities. [Photo/igd.gdcom.gov.cn]

I. Further expand areas of foreign investment market access

1.Allow the establishment of wholly foreign-owned enterprises in nine major fields, including: special vehicle manufacturing; new energy vehicle manufacturing; design, manufacture and repair of ships; design, manufacturing and maintenance of trunk, branch and general aircraft; helicopter design and manufacturing of 3 tons and above; design and manufacture of drones and aerostats; gas station construction and operation; international maritime transportation; and railway passenger transportation.

2.Cancel the restrictions on the foreign shareholding ratio of Chinese banks and financial asset management companies established in Guangdong province, and support foreign banks to set up branches and sub-branches at the same time.

3.Support foreign investment in Guangdong province to establish joint venture securities companies, securities investment fund management companies, futures companies, and life insurance companies, with foreign shares no more than 51 percent.

4.Promote the expansion of the scope of legal affairs accepted and contracted by Hong Kong and Macao and Mainland partnership law firms, and pilot the Hong Kong engineering construction management model in the field of engineering construction.

II. Increase financial incentives for foreign investment

1.From 2017 to 2022, new projects (excluding real estate and finance industry) with a total annual foreign investment amount (excluding loans) of more than $50 million established in Guangdong province, capital increased projects of more than $30 million, and headquarters or regional headquarters of foreign multinational corporations with more than $10 million, will be rewarded by the provincial financial department according to the proportion of the annual actual foreign investment of not less than 2 percent, with a maximum of 100 million yuan.

2.New or additional manufacturing projects with annual actual foreign investment exceeding $100 million established in Guangdong province by the world's top 500 enterprises (based on Fortune 500) and global industry leading enterprises; as well as new IAB (information technology, artificial intelligence, biopharmaceutical) and NEM (new energy, new materials) manufacturing projects with an actual annual foreign investment of not less than $30 million, can be rewarded according to real terms.

3.The headquarters or regional headquarters of a foreign-funded multinational company that contributes more than 100 million yuan to the provincial finance for the first time will get a one-time award of 30 percent of their contribution, with a maximum of 100 million yuan.

4.From 2018-2022, the provincial and municipal re-investment projects for the profits of overseas investors in Guangdong province from Chinese domestic enterprises will be rewarded by the provinces and municipalities. The provincial financial department will reward the local government according to the contribution to the provincial finance in the project investment, which will be used to support the foreign investors to expand their production and operation and invest in new projects.

III. Strengthen safeguard of land use of foreign projects

1.Manufacturing enterprises with foreign investment will enjoy the relevant preferential policies in accordance with Policies and Measures on Lowering the Cost of Manufacturing Enterprises to Support the Real Economy in Guangdong Province.

- Allow manufacturing enterprises with foreign investment to divide its industrial property rights by taking one building or one story as a basic unit, and industrial projects for introducing relevant industrial chain partners.

- For preferential-developed industrial projects with foreign investment and intensive land use, the land transfer floor price can be determined by 70 percent of the lowest price standard of industrial land.

- Undertake flexible year leasing for industrial land, the term correction coefficient can be determined in accordance with the specific value between lease term and available maximum term, and thus confirm determine the floor lease price.

- Under the premise of being in accordance with the planning and sticking to the purpose, to rebuild, expand and use underground space of the industrial land and warehouse land, enlarge the plot ratio and building density, will not be collected in the land price difference any longer.

2.Guarantee the land for key foreign investment projects. The manufacturing projects with an actual foreign investment of more than 1 billion yuan and the headquarters or regional headquarters of world top 500 enterprises and global industry leading enterprises whose self-built land for office property will be jointly arranged by the provincial and municipal governments.

3.Land use indicators for major foreign projects will be coordinated by Guangdong Provincial Government. For major foreign-funded projects that meet the conditions of Incentive Measures for Major Industrial Project Plan Indicators in Guangdong Province, the province will reward the land use indicators according to the corresponding standards, among which qualified major foreign-funded projects with an investment more than two billion yuan being rewarded full land use indicators.

4.Foreign-invested enterprises in the manufacturing industry that use industrial real estate to develop productive service industries and creative space, can use the land by original use and land rights type, and the relevant provisions will be followed after the expiration of five years.

IV. Support the R&D innovation of foreign investment

1.Grant financial assistance to foreign-funded R&D institutions who meet the requirements from 2017 to 2022.

- For foreign-invested R&D institutions identified as provincial-level new R&D institutions, the provincial government will provide a maximum funding of 10 million yuan.

- For foreign-invested R&D institutions identified as postdoctoral workstations and academicians workstations of the Chinese Academy of Sciences and the Chinese Academy of Engineering, the provincial government will provide a maximum funding of 1 million yuan.

- Provincial-level innovation projects of foreign-invested R&D institutions enjoy a maximum funding of the provincial financial of 2 million yuan.

2.Implement preferential taxation policies for foreign-invested R&D institutions.

- Recognized foreign research and development centers that import technology development supplies will be exempted from tax or enjoy tax refund.

- Conduct tax exemption for foreign invested enterprises that provide technical services.

- Give preferential income tax to technology advanced service enterprises. Technology advanced service enterprises that have been recognized by the provincial departments of science and technology, commerce, finance, taxation, development and reform shall be levied at the rate of 15 percent for enterprise income tax.

3.Other support such as encouraging foreign drug companies to enter Guangdong market and simplifying the clearance procedures for research and development materials will also be carried out.

V. Intensify financial support to foreign investment development

1.Increase support for industrial funds.

Give key support to world top 500 enterprises, global industrial leading enterprises and major multinational M&A project to carry out round-trip investments through the Guangdong Industrial Investment Fund.

2.Pilot IP (intellectual property) pledge financing.

3.Encourage local governments to promote the patent pledge financing model of loaning with guarantee insurance and financial risk compensation.

4.Foreign-invested enterprises enjoy the same preferential policies for the listing of private enterprises in China, the listing of “new third board” and the regional equity market financing.

5.Implement supporting policies in Guangdong Pilot Free Trade Zone.

Guangdong Pilot Free Trade Zone will explore the financial management and service innovation, as well as support enterprises with foreign investment to conduct fully cross-border financing for domestic and foreign currency and to issue bonds within the FTZ and overseas, allow companies to reuse the repatriated funds raised abroad, and support the foreign capital to conduct qualified overseas LP business and qualified overseas limited partner business.

VI. Enhance talent support to foreign investment enterprise

1.Implement Guangdong Superior Talent Card. Guangdong Provincial Government will include the senior management personnel in foreign-invested enterprises and other seven categories of talents into the service objects of the card, and gradually expand the area in which the card can be used as an identity card in Guangdong Province.

- The high-level talents identified by personnel departments can enjoy the same treatment as local residents and preferential facilitation services in entry and exit, children schooling, social insurance, healthcare, finance, house purchasing, tax, etc.

- Foreigners holding Guangdong superior talent card may apply for a work permit for five years and a residence permit valid for five years. In addition, cardholders have eligible priority for applying for a permanent residence ID.

2.Give title identification of returned innovation talents. The high-level overseas returned talents who have come back to work in foreign R&D institutions can be directly identified senior titles.

3.Further simplify the entry and exit procedures for talents. Guangdong will gradually promote six exit and entry policies and measures for talents in support of the construction of the Guangdong Pilot Free Trade Zone.

VII. Reinforce intellectual property protection of foreign projects

1.Speed up the construction of China (Guangdong) Intellectual Property Protection Center.

It is built to establish and improve the mechanism of rapid patent review, confirmation and rights protection. It will build an intellectual property rights protection network covering key industries in the entire province, so as to set up an intellectual property service innovation chain from research, development and application to protection. The center will also build cooperation mechanism for intellectual property rights protection and form a collaborative system for the protection of intellectual property that is connected by examination and approval, rights protection aids, conciliation and arbitration, administrative law enforcement and judicial aid.

2.Implement the special system of intellectual property protection for foreign-invested enterprises.

High-tech enterprises and foreign invested enterprise whose patent application or holding quantity is more than 30 can be considered as municipal key enterprises of intellectual property rights protection. Those with more than 100 can apply to be provincial key enterprises of intellectual property rights protection.

3.Encourage foreign enterprises to apply for and implement patents in China.

Eligible foreign-invested enterprises are welcome to participate in the evaluations of patent awards in line with regulations in Guangdong Province. The programs applied for provincial science and technology awards must conduct research and development, application and promotion within the jurisdiction area of Guangdong Province or belong to the achievements that were first completed in Guangdong or researched and developed through domestic and foreign cooperation.

VIII. Enhance investment and trade facilitation

1.The establishment and change filing of foreign-invested enterprises will be further decentralized to the county (city, district) commercial department for implementation.

2.Integrate taxation convenience measures.

Allow head offices and branches of foreign-invested enterprises that carry out trans-regional operation within Guangdong Province and have independent legal person qualification to pay VAT on a consolidated basis and their branch offices can pay it in the local places.

The eligible foreign investors directly invest encouraging investment projects by using the profit distributed from the domestic enterprises will conduct deferred tax policy and are not required withholding tax.

3.Reduce the time limit of corporate business transaction. Reduce the time for setting up a foreign-invested company to within five working days. The business registration service will be expanded to countries and regions along the Belt and Road to promote the local registration of foreign investors and remote processing. Simplify the materials that Hong Kong and Macao investors should submit in Guangdong, and carry out a pilot version of the simplified version of the commercial registration notary.

4.Optimize the approval process of the flexible working hour system and comprehensive calculation working hour system, and reduce the time limit of business transaction by a third of the legal time limit. To promote special service window of international trade in all the ports of Guangdong Province, reducing the time of goods clearance by a third.

IX. Optimize foreign investment environment in key industry parks

1.Optimize the administrative approval mode for national development zones.

2.Support provincial-level development zones of east, west, and north Guangdong province to be managed by the provincial industrial transfer park, and enjoy the related support policies as required.

Newly established foreign investment projects in the national development zones will be rewarded according to a certain proportion of the direct economic contribution. The newly established foreign investment projects in the provincial industrial transfer parks can enjoy the provincial industrial co-construction financial support policies.

3.Delegate the approval authority of the expansion and location adjustment of provincial-level development zones to the lower levels. The approval authority of the expansion and location adjustment of provincial-level development zones will be delegated to cities at prefecture level and the examination and approval results shall be submitted to the provincial government.

X. Improve the mechanism for foreign direct investment

1.Establish special coordination mechanism. To establish foreign investment attraction work coordination mechanism led by the main leadership of provincial and municipal governments, in which the provincial governor could contact the multinational company directly, coordinate and solve the key issues that restrict foreign investment attraction at regular intervals, especially the Fortune Global 500 companies in Guangdong.

2.Establish a provincial joint conference mechanism on utilization of foreign investment and discuss key projects one by one.

3.Integrate and optimize the provincial foreign economic and trade offices to speed up the construction of the international investment of Guangdong province.

4.Improve the complaint mechanism of foreign-invested enterprises.

[This English version is only for reference. To learn more, please refer to the authoritative Chinese version.]

Source: www.gd.gov.cn