Shanghai encourages regional headquarters
The Shanghai municipal government has recently published a new set of regulations to further encourage the establishment of regional headquarters in the city. Simon Meng, Partner from Herbert Smith and Betty Tam, Consultant from Herbert Smith discuss whether the new regulations will prove more attractive than the previous provisions.
Issue: September 2008
Keywords (click to search):
Shanghai
headquarters
Herbert Smith
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The Shanghai Municipality Provisions on Encouraging the Establishment of Regional Headquarters by Multinational Corporations 《上海市鼓励跨国公司设立地区总部的规定》(the Provisions),1 which became effective on July 7, 2008 and replaced the Shanghai Municipality Tentative Provisions on Encouraging the Establishment of Regional Headquarters by Multinational Corporations (the Tentative Provisions), describes regional headquarters as enterprises established or authorised by multinational corporations incorporated outside China to manage or provide services to enterprises within and outside of China.
A regional headquarters may take one of the following two forms:
• A China holding company – These companies may establish foreign investment enterprises (FIEs) in China and may also provide services to affiliates. The establishment of a China holding company is governed by a separate set of regulations promulgated by Central government authorities,2 with specific requirements on the amount of registered capital, asset value and number of FIEs established. More...
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