(February 1, 2023)

SMDRC D [2023] No. 3

Attention: all District People’s Governments and relevant units:

With a view to accelerating the development of Shanghai’s innovative economy, supporting various high-growth enterprises as well as research and development institutions to upgrade and build innovative corporate headquarters, cultivating and strengthening more high-level innovation entities, and providing support for the construction of a science and technology innovation center with global reach, we hereby issue to you the Procedures of Shanghai Municipality on the Administration of the Identification of and Awards for Innovative Corporate Headquarters and request you to implement them conscientiously.

You are hereby notified.

Procedures of Shanghai Municipality on the Administration of the Identification of and Awards for Innovative Corporate Headquarters

Chapter I General Provisions

Article 1

These Procedures are formulated with a view to accelerating the development of Shanghai’s innovative economy, encouraging various innovative entities including high-tech enterprises, specialized and sophisticated enterprises that produce unique and novel products, and enterprise technology centers to further improve their capabilities and speed up the creation of composite corporate headquarters, and providing support for the construction of a technology innovation center with global reach.

Article 2

The innovative corporate headquarters mentioned in these Procedures refers to the leading enterprises that focus on key segments of strategic emerging industries, take ownership of core intellectual property rights of products or services with domestic and international influence in the local area, possess overall technical capabilities and innovation capabilities that are in the leading position of the industry, gain a competitive edge and have high-growth development capabilities in market competition, make significant contributions to or play a leading role in local economic and social development, and have control or managerial authority over their cross-regional branch offices or businesses.

Article 3

Key support shall be given to industrial or service enterprises registered in Shanghai Municipality that are in the key areas specified in the National Guidance Catalogue for Key Products and Services in Strategic Emerging Industries and the 14

th

Five-Year Plan for the Development of Strategic Emerging Industries and Leading Industries in Shanghai Municipality, and that fall within the scope of core industries of the digital economy provided by the Statistical Classification of the Digital Economy and its Core Industries (2021). The relevant key supported areas may be dynamically adjusted in light of the actual circumstances.

Chapter II Organization and Identification

Article 4

The Office of the Leading Group of Shanghai Municipality for Strategic Emerging Industries (hereinafter referred to as the Office) shall be responsible for the identification and administration of innovative corporate headquarters in this Municipality and for the coordination of relevant units in providing support and safeguards for innovative corporate headquarters.

The administrative departments of development & reform, economy and information technology, science and technology, finance, commerce, education, exit-entry, human resources and social security, housing and urban-rural development, market regulation, intellectual property, and financial regulation shall provide support and safeguards for innovative corporate headquarters within their respective functions and duties.

The people’s governments of all districts shall designate relevant competent departments within their respective districts to lead and do a good job in the preliminary review and report of innovative corporate headquarters, funding supports, and other work.

Article 5

The following conditions shall be met for the application for identification as an innovative corporate headquarter:

1. Industrial or service enterprises registered in this Municipality whose total assets reach 200 million yuan or market value reaches 2 billion yuan, and whose annual sales revenue exceeds 100 million yuan or the average compound growth rate of sales revenue in the latest three years reaches more than 20%; having composite headquarters functions such as research and development, sales, and settlement in Shanghai, and owning two or more branch institutions or enterprises with overseas investment outside this Municipality.

2. The main products or services belong to the National Guidance Catalogue for Key Products and Services in Strategic Emerging Industries or the key areas of relevant planning or fall within the core industry scope of the Statistical Classification of the Digital Economy and its Core Industries

(2021).

3. The proportion of annual research and development expenses to sales revenue shall be more than 5% (service enterprises such as software and information services, integrated circuit design, and outsourced biopharmaceutical research and development shall be more than 10%), or the total amount of annual research and development expenses exceed 50 million yuan, of which the proportion of research and development expenses incurred domestically accounts for no less than 60% of the total research and development expenses; the proportion of annual research and development personnel to the total employees reaches more than 10% (service enterprises such as software and information services, integrated circuit design, and outsourced biopharmaceutical research and development reaches more than 20%), or the annual total number of research and development personnel reaches more than 100.

4. Owning more than 15 core intellectual property rights of the main products or services in Shanghai, including invention patents, exclusive rights to integrated circuit layout design, and software copyrights, or product registration certificates for innovative drugs, improved new drugs with relatively high technology, and Catalogue II or III innovative medical devices.

5. Any entities who have obtained one of the following identifications within the period of validity shall be given precedence in the application: high-tech enterprises, specialized and sophisticated enterprises that produce unique and novel products, national or municipal enterprise technology centers, technology innovation demonstration enterprises, or Shanghai patent work demonstration enterprises.

6. Where enterprises that have made outstanding contributions to economic and social development or have outstanding industry influence and driving effect do not meet some indicators but meet the above basic requirements in general, such enterprises may, likewise, upon the approval of the Municipal People’s Government, be studied and included as special cases of the application.

Article 6

The following materials shall be submitted in application for identification as an innovative corporate headquarter:

1. The application form signed by the legal representative of the enterprise (the original stamped with the official seal). The application form shall include basic information about the enterprise, including information about the enterprise and its invested enterprises, assets, revenue, tax payment, and number of employees;

2. The audit report and tax payment certificate of the enterprise for the previous year (photocopies stamped with the official seal);

3. Relevant materials such as business licenses of the enterprise and its invested enterprises (photocopies stamped with the official seal);

4. Documents on intellectual property rights including invention patents, exclusive rights to integrated circuit layout designs, and software copyrights, as well as innovative achievement documents including product registration certificates for drugs and medical devices (photocopies stamped with the official seal); and

5. Other materials required for explanation or proving.

Article 7

The identification of innovative corporate headquarters shall follow the following procedures:

1. The enterprise shall submit an application to the competent department in its registered district and submit relevant materials as required;

2. The competent department of the district shall conduct a preliminary examination within 10 working days after receiving the complete application materials, and put forward its preliminary examination opinions, and the district people’s government shall submit these opinions to the Office;

3. The Municipal Development & Reform Commission shall, in accordance with the identification criteria, regularly organize a comprehensive evaluation of the relevant applications, and shall, jointly with the Municipal Economy and Information Technology Commission, the Municipal Science and Technology Commission, and the Municipal Finance Bureau, put forward identification recommendations for the preferred enterprises that meet the criteria, and report to the Municipal People’s Government for examination and approval after submitting them to the meeting of the Office for deliberation; and

4. The enterprises that have obtained identification shall be given approval and replies by the Office, and be uniformly named Shanghai Innovative Corporate Headquarters.

Chapter III  Support and Awards

Article 8

Innovative corporate headquarters meeting the following relevant conditions may apply for funding and awards in accordance with the provisions:

1. Where innovative corporate headquarters with a paid-in registered capital of more than 100 million yuan for newly established legal entities have registered in or relocated to this Municipality after January 1, 2022, they may be given priority to receive up to 5 million yuan as start-up subsidy;

2. Where innovative corporate headquarters meet the conditions of Item 1 of this Article, they shall be subsidized by the relevant district for three years with 30% of the rent at the standard of no more than 1,000 square meters of the office area and no more than 8 yuan per square per day; for self-built office buildings, subsidies shall be provided on an annual basis according to the above standards;

3. For innovative corporate headquarters whose annual sales revenue has reached 500 million yuan, 1 billion yuan, or 1.5 billion yuan for the first time since January 1, 2022, and whose new comprehensive contributions to the region where they are located are no less than 10 million yuan, an award of 5 million yuan, 3 million yuan, and 2 million yuan shall be given to them respectively;

The municipal and district finance departments shall respectively bear 40% and 60% of the subsidy and awards mentioned in Item 1 and Item 3 of Paragraph 1 of this Article. The relevant finance departments shall bear the full cost of the subsidies mentioned in Item 2 of Paragraph 1 of this Article, and the municipal-level subsidy shall be arranged in the special fund for the development of strategic emerging industries in this Municipality. Those who have already enjoyed benefits from other relevant municipal policies for headquarters shall not receive repeated awards.

The eligible innovative corporate headquarters may submit applications for the municipal part of the above-mentioned awards to the district where they are registered. Such applications shall be submitted by the district people’s governments to the Office after being reviewed by the competent departments of the district. The Municipal Development & Reform Commission shall, together with the Municipal Finance Bureau and relevant units, organize evaluations and put forward proposals for funding, and submit the evaluations and proposals to the Municipal People’s Government for approval after being deliberated by a meeting of the Office.

Article 9

For major projects where innovative corporate headquarters have made major breakthroughs in independent research and development of innovative product components and parts, raw materials, and basic software, and have realized actual output, if such projects meet the subsidy conditions of the special fund for strategic emerging industries, a subsidy of 30% of the total project cost will be awarded in accordance with relevant provisions, with a maximum support amount of 100 million yuan in principle.

Article 10

Innovative corporate headquarters shall be supported to apply for special interest rate discounts on medium- and long-term credit for relevant industries. The eligible innovative corporate headquarters shall be encouraged to establish relevant funds and apply for funding from the municipal entrepreneurship investment guidance fund and the municipal angel investment guidance fund. Financial institutions shall be encouraged to develop specialized financial products and services for innovative corporate headquarters.

Article 11

Innovative corporate headquarters shall be encouraged to establish various types of innovation consortiums with colleges and universities, and a policy of tax reduction on basic research expenses for eligible enterprises shall be implemented in accordance with relevant provisions. Innovative corporate headquarters shall be supported to set up municipal engineering research centers, which shall be favorably supported to open for business according to relevant provisions. The centers shall be included in the daily management of the district where they are located, yet shall not take up the district’s annual quota for application.

Article 12

Innovative corporate headquarters shall be supported to establish high-value patent cultivation centers, and a subsidy of no more than 800,000 yuan may be given to those eligible for the intellectual property special fund. The innovative corporate headquarters that develop patent navigation shall be supported and subsidized with 50% of the total cost according to relevant provisions, with each support amount not exceeding 300,000 yuan.

Chapter IV  Services and Convenience

Article 13

Identified innovative corporate headquarters may be recommended to be included in the list of key supported employers for non-local graduates of colleges and universities seeking employment in Shanghai and the list of key institutions for talent introduction. The core backbone and young talents of the enterprise shall be included in the key protection scope of talent apartments at municipal and district levels. Differentiated housing purchase policies shall be implemented for key high-level talents of the enterprise who comply with the requirements.

Article 14

Identified innovative corporate headquarters shall be included in the municipal science and technology innovation occupation list. Foreign senior professionals employed and guaranteed by the enterprise shall be issued with long-term work residence permits and may apply for permanent residence in China after working for three years and being recommended by the enterprise. Eligible innovative corporate headquarters and their imported goods for research and development shall be included in the “white list” of biopharmaceutical enterprises (research institutions) and of imported goods for research and development in this Municipality, as well as the “white list” of the pilot units of inbound special goods under Zhangjiang Science City’s program, and shall enjoy relevant facilitation support.

Article 15

Industrialization projects of innovative corporate headquarters that comply with the municipal standards for major engineering projects shall be given precedence to be included in the list of municipal major engineering projects and be promoted.

Article 16

Eligible relevant products of innovative corporate headquarters shall be given precedence to be listed in the recommended catalogue of innovative products in this Municipality and be entitled to policies such as initial purchases by the government. State-owned enterprises and public institutions shall be encouraged to use relevant innovative products listed in the key catalogues of the State and this Municipality produced by innovative corporate headquarters.

Article 17

Eligible innovative corporate headquarters in the biopharmaceutical industry shall be encouraged to apply for innovation for their relevant products. For products included in the innovation channel, relevant departments shall, in accordance with their respective duties, intensify service guidance by adhering to the principle of “early intervention, designated person in charge, research-review collaboration, and full-process guidance”.

Article 18

This Municipality shall encourage the inclusion of innovative corporate headquarters in the scope of implementation of the municipal system of approval upon notification and commitment for technology contracts identification and registration, so as to achieve rapid confirmation and registration of technology contracts. The Shanghai Technology Exchange, the National Eastern Tech Transfer Center, and other regional exchanges and transfer centers, shall be encouraged to provide science and technology services including collaborative innovation resources, demand docking, and technology transactions for innovative corporate headquarters in this Municipality and the Yangtze River Delta Region.

Article 19

Improvement of services for enterprises in the name registration and handling process shall be supported, and the “whole-process online registration” shall be carried out for market registration to facilitate the application and use of electronic business licenses and electronic seals.

Chapter V  Supervision and Administration

Article 20

The Municipal Development & Reform Commission shall, together with relevant departments, establish a mechanism for irregular inspections, conduct dynamic evaluations of the identified innovative corporate headquarters, propose rectification opinions for enterprises with problems, and order them to make corrections within a prescribed time limit. Where enterprises no longer meet the identification criteria, their relevant qualifications shall be promptly canceled upon the approval by a meeting of the Office.

Article 21

Identified innovative corporate headquarters shall report their operating conditions to the Municipal Development & Reform Commission and the district competent departments by the end of December each year. Where an enterprise undergoes renaming, division, merger, restructuring, or other major changes related to identification criteria, it shall, within two months, report to the district competent department, which shall then report to the Municipal Development & Reform Commission.

Article 22

Where an identified innovative corporate headquarter commits any of the following acts, its qualification and relevant funding shall be revoked:

1. serious fraud during the application for identification or application for related funding and awards;

2. major safety or quality accidents or serious dishonest behaviors; or

3. failure to report major changes on time, or not submitting enterprise operating conditions for two consecutive years.

These Procedures shall be effective as of March 1, 2023, and remain in effect till February 29, 2028. All districts and relevant departments may issue supporting policies or implementation rules based on these Procedures. The application for the identification of innovative corporate headquarters in the Lin-gang Special Area shall be initially reviewed by the Lin-gang Special Area Administration and then be forwarded, and the funding channels for subsidies and awards shall be arranged with reference to the funding channels for subsidies and awards for regional headquarters of multinational companies in Lin-gang Special Area.