Regulations of Shanghai Municipality on Encouraging the Establishment and Development of Foreign-funded Research and Development Centers
Article I (Objective and Legal Basis)
For the purpose of further opening up Shanghai, enhancing Shanghai’s function of global resources allocation, strengthening its advantage as a scientific and technological innovation source, and encouraging foreign investors to set up research and development centers (hereinafter referred to as Foreign-funded R&D Centers) in the municipality, as well as in accordance with laws and regulations, including the Foreign Investment Law of the People’s Republic of China, the Regulations for the Implementation of the Foreign Investment Law of the People's Republic of China, the Regulations of Shanghai Municipality on Foreign Investment, the Regulations of Shanghai Municipality on Advancing the Construction of a Science and Technology Innovation Center, etc., the Regulations of Shanghai Municipality on Encouraging the Establishment and Development of Foreign-funded Research and Development Centers (hereinafter referred to as the Regulations) is thereby formulated.
Article II (Definitions)
A Foreign-funded R&D Center is an institution set up by foreign investors to engage in research, development and experimental development (including intermediate experiments serving R&D activities) in natural sciences and related fields of science and technology, of which the content includes basic research, applied research, product development, etc.
A Global R&D Center refers to a global-level R&D center established by foreign investors that possesses exclusively-owned research and development technology platforms, undertakes key steps and the majority of the process of its global-level R&D projects as well as progresses in synch with comparable global activities.
A Foreign-funded Open Innovation Platform is an innovative form of foreign R&D centers. It refers to a research and development center that promotes project-based cooperation with SMEs and innovation teams to realize co-innovation by providing facilities, equipment, research and development sites and professional guidance and by leveraging the platform’s technology, talent, capital, data and other resources.
Article III (Scope of Application)
The Regulations shall apply to the establishment and development of Foreign-funded R&D Centers, Global R&D Centers and Foreign-funded Open Innovation Platforms within the jurisdiction of this municipality.
Article IV (Competent Authorities and Responsibilities)
Shanghai has established a Foreign-funded R&D Center coordination mechanism led by the municipal commerce department, with the participation of the municipal departments of science and technology, development and reform, economy and informatization, education, exit-entry administration of the public security department, finance, human resources and social security, planning and natural resources, ecology and environment, housing and urban-rural development, market supervision, taxation, drug supervision, intellectual property rights, as well as the Customs (Shanghai Branch), the Shanghai Headquarters of the People's Bank of China, the State Administration of Foreign Exchange (Shanghai Branch), and the China Banking and Insurance Regulatory Commission (Shanghai Office).
The municipal commerce department shall be responsible for the accreditation and management of Foreign-funded R&D Centers, while other competent authorities shall exercise relevant administrative powers and provide services for Foreign-funded R&D Centers within their respective functions and responsibilities.
The Pudong New Area People's Government, the China (Shanghai) Pilot Free Trade Zone Lin-gang Special Area Administration, the Administration Committee of the Hongqiao Central Business District, and the Zhangjiang Science City Development and Administration Office are entrusted by the municipal commerce department to carry out the accreditation of Foreign-funded R&D Centers within their respective jurisdiction.
Article V (Conditions for Accreditation)
The following conditions shall be met for the accreditation of a Foreign-funded R&D Center:
(i) The applicant shall be a foreign-invested enterprise set up in the municipality under relevant laws and regulations;
(ii) The applicant shall have explicit orientations, specific projects, fixed premises, necessary instruments and equipment as well as other necessary conditions for scientific research for its research and development;
(iii) The applicant’s accumulative investment in research and development shall be no less than USD 2 million.
Applicants for the accreditation as a Global R&D Center shall meet the following requirements in addition to the above-mentioned ones:
(i) The applicant is an R&D center that is authorized by the parent company as its highest-leveled R&D center globally and that undertakes global research and development projects;
(ii) The applicant’s accumulative research and development investment shall be at least USD 10 million, and its research and development investment shall account for at least 10% of the parent company's global research and development investment the year prior to accreditation.
Applicants for the accreditation as a Foreign-funded Open Innovation Platform shall meet the following requirements:
(i) At least USD 2 million of total investment;
(ii) At least 1,000 square meters of research and development sites;
(iii) At least 10 R&D and innovation projects signed and settled in the platform;
(iv) Necessary facilities and equipment for co-innovation, guidance from international experts, as well as world’s cutting-edge technology, talent and other resources.
Article VI (Application Materials)
To apply for the accreditation as a Foreign-funded R&D Center, the following materials shall be submitted:
(i) A letter of application signed by the legal representative;
(ii) A resolution of the shareholders or the board of directors;
(iii) Materials of special audit on R&D investment.
To apply for the accreditation as a Global R&D Center, the following materials shall be submitted in addition to the above-mentioned ones:
(i) A Global R&D Center authorization document signed by an authorized signatory of the parent company;
(ii) Supporting documents that could vindicate research and development investment and the shareholding relationship, etc.;
To apply for the accreditation as a Foreign-funded Open Innovation Platform, the following documents shall be submitted:
(i) A letter of application signed by the legal representative;
(ii) A resolution of the shareholders or the board of directors;
(iii) Supporting documents to verify the paid-in capital of the platform;
(iv) Supporting documents to verify property ownership or lease of the research and development sites;
(v) Contracts for the admission of the signed and settled projects of the platform.
The above-mentioned applications can be processed through "Government Online-Offline Shanghai", Shanghai's all-in-one online government service platform. The governments or departments responsible for the accreditation shall finish the decision-making process within 5 working days from the date of receipt of the application materials.
Article VII (Customs Clearance Facilitation for Cross-border Research and Development)
Qualified Foreign-funded R&D Centers may finish the filing process for the enterprises and the imported products for R&D use on the "one-stop" service information platform of the Customs and may enjoy customs clearance facilitation for those products.
Second-hand key R&D equipment to be imported for less than 1 year, upon the approval of the Customs, may be granted a reasonable extended period of stay. For vehicles that are imported for experimental testing and are required to be shipped out within 6 months, upon the approval by the Customs, the period of stay can be extended to 2 years at the most.
Relying on the joint oversight mechanism for the security of special items entering the country, which was established on a trial basis by the Customs and the Pudong New Area Government, the municipality shall carry out assessments on the origin, safety and necessity of special import items for research, development and production of Foreign-funded R&D Centers included in the "white list", and optimize the management procedures for the entry of the above-mentioned special items.
Article VIII (Cross-border Financial Services Facilitation)
Banks are supported by the Shanghai Headquarters of the People's Bank of China and the State Administration of Foreign Exchange (Shanghai Branch) to provide Foreign-funded R&D Centers with convertible cross-border financial services including cross-border fundraising, trade in technology, franchising, as well as centralized fund management on the basis of free trade accounts, to provide cross-border financial facilitation to employees of Foreign-funded R&D Centers when taking part in equity incentive schemes in accordance with law, and to provide Foreign-funded R&D Centers with facilitated convertible cross-border financial services based on individual free trade accounts for talent introduced from overseas.
Financial institutions within the municipality’s banking system are encouraged to optimize their procedures for foreign exchange settlement under non-trade accounts, to strengthen counseling and other services concerning taxation for Foreign-funded R&D Centers, and to provide a green access for them when handling the contract filing and tax determination in foreign exchange settlement under non-trade accounts.
Article IX (Talent Acquisition and Development)
Foreign-funded R&D Centers are included in the Shanghai Science and Technology Innovation Occupation List. Eligible returnees from abroad after finishing overseas study and employed by Foreign-funded R&D Centers will be given priority when applying for 「hukou」 (China's household registration) in Shanghai; outstanding domestic employees who are non-residents of the municipality can apply for a Shanghai residential permit with corresponding points, or apply for conversion into a Shanghai 「hukou」 according to the requirements; eligible high-end, urgently needed employees can directly apply for 「hukou」 in Shanghai; eligible foreign employees who apply for the Overseas Talent Residential Permit are entitled to additional points and related benefits. High-level foreign talent employed by Foreign-funded R&D Centers are entitled to relevant favorable treatment according to the Regulations.
High-level foreign talent employed by Foreign-funded R&D Centers will be given priority when applying for the Confirmation Letter for High-level Foreign Talent; for foreign talent whose employment is deemed necessary, upon the recommendation of the municipal commerce department, restrictions on age, education and work experience can be relaxed to a certain extent; eligible foreign personnel employed can apply for a work permit by means of "Notice + Commitment", Application Acceptance, and etc. In addition, they can enjoy the convenience of contact-free approval processes when applying for work permit notice and extension among other related matters.
Outstanding international students who have obtained a bachelor's degree or above in universities in Shanghai, or a master's degree or above in universities in China, as well as outstanding foreign university graduates with a bachelor's degree or above in a prestigious university outside of China, can be directly employed by Foreign-funded R&D Centers regardless of quota for employment of foreign university graduates.
Eligible high-level overseas returnees recruited by Foreign-funded R&D Centers can, regardless of their years of service in China, participate in the evaluation for senior professional titles, with their overseas professional work experience, academic or professional technical contribution as the basis for evaluation.
Department of science and technology and department of human resources and social security shall provide foreign talent employed by Foreign-funded R&D Centers with convenience for their work and application of relevant documents in the municipality.
Article X (Entry & Exit, Stay and Residence Facilitation)
Eligible Chinese employees of Foreign-funded R&D Centers can apply for APEC Business Travel Cards. The relevant departments shall provide convenience for those who need to travel to Hong Kong, Macau, Taiwan or abroad for business purposes.
Foreign personnel invited by Foreign-funded R&D Centers for multiple temporary visits to China can apply with exit-entry administration of the public security bureau for multiple-entry visa with a validity period of no more than 1 year and each stay lasts no more than 180 days; foreign personnel invited or employed by Foreign-funded R&D Centers who come to China without a visa can apply for a port visa according to the Regulations.
Foreign employees recruited by Foreign-funded R&D Centers can apply for the residential permit for foreigners valid for 3 to 5 years according to the Regulations.
High-level foreign talent introduced by Foreign-funded R&D Centers can be given priority when applying for permanent residence upon recommendation by municipal commerce department.
Shanghai Customs shall provide a green access for legal representatives, senior managers and research personnel of Global R&D Centers to apply for health certificate.
Article XI (Training Subsidies and Housing Security)
Foreign-funded R&D Centers can receive corresponding subsidies for organizing vocational training of employees according to relevant regulations.
Eligible personnel of Foreign-funded R&D Centers can apply for rent-controlled talent apartments from the municipality or enjoy housing subsidies for talent in accordance with relevant regulations.
Reasonable housing needs of eligible senior management personnel and core technical personnel of Global R&D Centers shall be supported.
Article XII (Registration Facilitation)
Qualified R&D venues of Foreign-funded Open Innovation Platforms can be recognized as sites for centralized registration, and the market supervision department shall provide registration service for tenant enterprises which engage in projects that do not disturb the public or affect the surrounding environment and public safety.
Article XIII (Environmental Assessment and Hazardous Waste Management Facilitation)
The ecology and environment department shall implement categorized management of environmental impact assessment on Foreign-funded R&D Centers, simplify the preliminary procedures for the assessment of qualified Foreign-funded R&D Centers, and strengthen concurrent and ex-post regulation.
The municipality supports the participation of Foreign-funded Open Innovation Platforms in centralized hazardous waste management.
Article XIV (Facilitation on Land Use for R&D Purposes)
The planning and natural resources department and district-level governments shall guarantee the reasonable demand for land use by Foreign-funded R&D Centers in accordance with the law, set reasonable control indicators such as the plot ratio and building height on the land for research and development purposes, optimize the spatial layout for scientific research and innovation, and promote integrated development of scientific research and innovation functions as well as urban functions.
Article XV (Industry-University-Research Cooperation)
Foreign-funded R&D Centers can participate in the development of various science and technology innovation bases and platforms in the city, such as the municipal manufacturing innovation center, and share large equipment and related R&D experiment services on public R&D service platforms via "Science and Technology Innovation Coupon."
Foreign-funded R&D Centers can cooperate with local universities, research institutes and enterprises to carry out research on key technologies, to train postgraduates, and to jointly build collaborative platforms such as practice bases, industrial-oriented collages, industry-university-research laboratories and data sharing platforms. Foreign-funded R&D Centers with strong R&D capabilities and effective industry-university-research integration can set up work stations for postdoctoral studies, and qualified postdoctoral work stations can independently recruit postdoctoral researchers upon approval.
Article XVI (Participation in Government Projects)
Foreign-funded R&D Centers can participate in government projects. Foreign-funded R&D Centers undertaking government projects in key areas such as integrated circuit, biomedicine, and artificial intelligence will be supported by district-level governments, key functional areas and development zones in accordance with relevant regulations.
Article XVII (Commercialization of Scientific and Technological Findings)
Public financial support will be available for projects of local commercialization of scientific and technological findings undertaken by Foreign-funded R&D Centers in the city in accordance with the Regulations of Shanghai Municipality on Promoting the Commercialization of Scientific and Technological Findings and other relevant regulations. Innovative achievements of industrialization by Foreign-funded R&D Centers can be declared in the Shanghai Recommendation Catalog for Innovative Products, in which products that are marketed for the first time (including the first set of equipment, the first batch of new materials, and the first version of software) can be procured by the government in accordance with relevant regulations.
Article XVIII (Protection of Intellectual Property Rights)
The municipality shall protect the intellectual property rights of Foreign-funded R&D Centers in accordance with the law, accelerate the development of the China (Shanghai) Intellectual Property Protection Center and provide a one-stop comprehensive service that integrates rapid patent examination, rights confirmation and protection.
Foreign-funded R&D Centers that obtain domestic and foreign invention patents will receive financial support in accordance with relevant provisions of the municipality. Qualified Foreign-funded R&D Centers can apply for pilot patent work demonstration units and enjoy relevant policies.
Article XIX (Funding Support)
Qualified Global R&D Centers are entitled to funding support for the establishment and rental under the provisions of the ear-marked funds for the development of regional headquarters.
Article XX (Tax Support)
In accordance with relevant national regulations, qualified Foreign-funded R&D Centers importing supplies for scientific research as well as scientific and technological development are exempted from import tariff, value-added tax (VAT) at the import stage and consumption tax; and the VAT incurred with the purchasing of domestically-manufactured equipment will be fully refunded.
Article XXI (Government Support)
In line with the actual situation of the respective districts, district-level governments, key functional areas and development zones can formulate policies and measures to support the development of Foreign-funded R&D Centers and create a business environment that is conducive to the development of Foreign-funded R&D Centers.
Article XXII (Implementation by Reference)
Foreign-funded R&D Center established by investors from Hong Kong, Macao and Taiwan can use the Regulation as reference for relevant support.
Article XXIII (Effective Date and Validity Period)
The Regulation shall come into effect on December 1, 2020 and shall be valid until November 30, 2025.
Disclaimer:
The power of interpreting any provision in this text is entirely vested in the competent departments of Shanghai Municipal People’s Government.
Should there be any discrepancy of meaning between the Original Chinese Text and the English Text, the Chinese version shall prevail.
來源：外商投資促進處、外事處
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原標題：《聚焦 | 英文版來了！上海市鼓勵設立和發展外資研發中心的規定》
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