Shandong's incentives for significant foreign investment projects | govt.chinadaily.com.cn

Shandong's incentives for significant foreign investment projects

Updated: Mar 12, 2019 govt.chinadaily.com.cn Print

Shandong provincial government released its incentive policies for significant foreign investment projects to accelerate the province's conversion of old and new growth drivers and to promote the high-quality development of foreign investment in the province's real economy.

The policies, which took effect on Sept 21, 2018, will last until Dec 31, 2022.

Incentive objects
Foreign-invested enterprises that have finished business and tax registration in Shandong province, have independent legal personality, and operate in accordance with the law.

Incentive content
1. For new foreign-invested projects with annual actually utilized foreign capital exceeding $50 million, and foreign capital increase projects with annual actual foreign capital utilization surpassing $30 million, the Shandong Provincial Department of Finance will give a grant of not less than 2 percent of their actual use of foreign investment in the year. The maximum grant is 100 million yuan ($14.49 million).
2. For headquarters or regional headquarters of transnational corporations with annual actual foreign capital utilization reaching more than $10 million, the Shandong Provincial Department of Finance will give a grant of not less than 2 percent of their actual use of foreign capital in the year, with the maximum 100 million yuan.
3. For new projects or capital increase projects of manufacturing industry invested by Fortune Global 500 companies and leading industrial companies with annual actually utilized foreign investment exceeding $100 million, and new projects related to the new generation information technology, intelligent equipment, biological medicine, new energy and new material sectors which can contribute to the province's conversion of old and new growth drivers and with an annual actual foreign capital utilization of more than $30 million, the Shandong Provincial Department of Finance will discuss case by case and provide key support.
4. Projects that match the several aforesaid conditions can select the higher amount grant, but the grant can be received only once a year.

Determination criteria
1. New projects should be those funded by foreign-invested enterprises founded after Sept 21, 2018 with a registered foreign capital of not less than $50 million.
2. Capital increase projects refer to those invested by foreign-invested enterprises which add more registered foreign capital after Sept 21, 2018. The newly added registered foreign capital should be not less than $30 million and the enterprise's total actual foreign capital utilization needs to reach $50 million after the new capital arrives.
3. The annual actually utilized foreign capital means the registered foreign capital of an enterprise that arrives in cash in a fiscal year (from Jan 1 to Dec 31) and has been included in the actual use foreign capital statistics announced by the Ministry of Commerce. Investment by investment companies, shareholder loans, and investment of in-kind, intangible assets, stock equity and land usage right are not included.
4. Headquarters or regional headquarters of transnational corporations should meet the relative requirements of the province's incentive policy for headquarters and be identified by relevant departments.
5. Global 500 companies need to be on the list ranked by Fortune magazine in the past three years, and hold 30 percent or more of the stock rights of enterprises which apply for the grants.
6. Industrial leading companies should be on the Forbes Global 2000 list of the previous year, and hold 30 percent or more of the stock rights of enterprises that apply for the grants.

Application materials
1. Application form for grant for significant foreign investment projects
2. Document of approval, certificate of approval or registration form, and business license of foreign-invested enterprises (copies)
3. Capital verification report or shareholders' investment certificates issued by accounting firms, and bank reconciliation (copies)
4. Other materials needed for applying for the "discussing case by case" grant:
1) Testimonial materials for Global 500 or industrial leading companies' investment
2) Shareholding structure diagram (specify the actual controller of the stock rights) and equity ratio of an enterprise
3) Presentation of conditions, including operational situation, prospects, market share and status, by enterprises in new generation information technology, intelligent equipment, biological medicine, new energy and new material sectors
4) Presentation of conditions, including scientific and technological achievements, invention patents, and contributions to the province's related industries, by enterprises in the hi-tech industry

Procedures
1. General procedures
1) Enterprises that apply for the grants need to hand in their application materials to the district or county-level (investment promotion) bureau of commerce before the end of February.
2) All the application materials will be submitted to the city-level (investment promotion) bureau of commerce before the end of March.
3) The city-level (investment promotion) bureau of commerce, cooperating with the city's department of finance, will check the authenticity of application materials, and then submit the materials to the Shandong Provincial Department of Commerce before the end of April.
4) The Shandong Provincial Department of Commerce and the Shandong Provincial Department of Finance will invite a third party to conduct assessments independently and issue its review opinions.
5) The Shandong Provincial Department of Commerce and the Shandong Provincial Department of Finance will decide the list of rewards, which will be published on the government websites for public review for not less than five working days.
6) If there is no objection, the grant money will be allocated according to relevant regulations.

2. "Discussing case by case" grant
1) Enterprises that apply for the grant hand in their application materials to the local (investment promotion) bureau of commerce.
2) The local (investment promotion) bureau of commerce, within the bureau's purview of authority, will determine whether or not the applicants can receive the grant.
3) If beyond the local (investment promotion) bureau of commerce's purview of authority, the application materials will be submitted to the upper level (investment promotion) bureau of commerce and department of finance.
4) If beyond the provincial department of commerce or finance's purview of authority, the application materials will be handed over to the Joint Office of High-quality Development of the Real Economy.

3. Safeguard mechanism
1) Enterprises need to hand in their application materials according to the set time and requirements.
2) The grant money is cashed once a year.

Supervision and inspection
1. Enterprises that have received the grants should keep the promise that they will not leave Shandong province or reduce their registered capital within five years.
2. Enterprises that cheat to get grants have to return the money if found out. Their dishonest behavior will be added to the enterprise credit information file.

This English version is only for reference. To learn more, please refer to the authoritative Chinese version on Shandong.gov.cn.

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