Shenzhen Releases Measures on Special Fund Management for Qianhai
The Shenzhen Municipal Government released the “Measures on Special Funds Management for the Pilot Development of the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone which specifies that the Chinese central government and Shenzhen local government will jointly allocate special funds to support the development of four major industries in Qianhai. Detailed information can be found below.
According to the Measures, an entity applying for the special funds shall meet the following conditions:
- It shall have independent legal person qualifications
- It shall have a sound financial management system
- It shall be in a favorable financial condition
- It shall have no record of illegal or irregular operations
Moreover, a project meeting the following requirements may be granted financial support:
- It shall meet Qianhai’s industry entry threshold standards
- It should either be:
1. A project submitted by a modern service enterprise registered in Qianhai and designed to support the development of the service industry in Shenzhen; or
2. A project submitted by a modern service enterprise registered in Shenzhen and designed to support the development of the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone.
The Measures also provide that the special funds shall be utilized to support the development of enterprises in the following industries:
- Modern logistics
- Information services
- Other related industries
The special funds shall be allocated to qualified projects in the form of equity investment, financial subsidies, financial rewards, and subsidized loans. In principle, one project can only receive one form of financial support. Specifically:
- Equity investments shall be primarily granted to projects involved in the production factors trade, manpower services, information resources, and other projects that can promote the development of modern services.
- Financial subsidies shall be primarily granted to projects of a non-profit nature.
- Financial rewards shall be primarily granted to projects that have achieved a prescribed growth target.
- Subsidized loans shall be primarily granted to large-scale projects funded by bank loans.
Furthermore innovative projects and projects based in Qianhai may also be granted financial rewards.
In general, funds granted to a project via equity investment, financial subsidy or financial reward cannot exceed 20 percent of the total investment amount, while funds granted to a non-profit project cannot exceed 30 percent of the total investment amount. More specifically:
- Equity investment granted to a project shall not exceed RMB50 million
- Financial subsidies granted to a project shall not exceed RMB20 million
- Financial rewards granted to a project shall not exceed RMB10 million
The Measures also provide that, with respect to subsidized loans, eligible projects will be granted a lending rate that is 3 percentage points lower than the benchmark rate for up to two years, with total subsidies not exceeding RMB20 million.