Major Cities Faces Challenges in Attracting Foreign Enterprises in Setting Up Headquarters
Faced with various challenges in setting up regional headquarters in Shanghai, Beijing, Guangzhou and Shenzhen during industrial upgrading and an economic transition in hopes to attract foreign-invested enterprises to set up regional headquarters in their jurisdictions.
These first tiered cities of Beijing, Shanghai, Guangzhou and Shenzhen have all announced regional incentives to attract foreign RHQs as they try and create cluster effects and optimize resource distribution. Recognition of RHQs in Beijing and Shanghai, two types of FIEs namely investment holding companies and management companies can now apply for the RHQ status if they meet certain criteria.
The foreign investor shall have its total asset value reach no less than US$400 million during the year previous to the year of application and own an FIE in China with a total paid-in capital exceeding US$10 million or own no less than 10 FIEs in China with a total paid-in capital exceeding US$30 million.
In case of a joint venture, the Chinese investor shall have its total asset value reaching no less than RMB100 million during the year previous to the year of application and shall have a registered capital of the investment holding company shall be no less than US$30 million. Any foreign investment holding company that has already been settled in Beijing or Shanghai upon approval is eligible to apply for the RHQ status.