Briefing on the new rules of Regional Headquarters of Multinational Companies

文章摘要 本文系统梳理上海市2019年修订的跨国公司地区总部相关规定,明确地区总部与总部型机构的定义、认定标准、申请材料、审核流程及配套优惠政策。新规自2019年9月1日起施行,同步配套出台促进发展的若干意见,旨在吸引跨国公司集聚、推动总部经济升级。截至2019年7月底,上海已累计吸引跨国公司地区总部696家、外资研发中心450家,位居内地城市首位。文章为计划在沪设立总部或总部型机构的企业提供清晰的实务指引,涵盖资金支持、跨境资金管理、出入境便利及税收服务等关键政策要点,具有较强操作参考价值。

PrefaceAs the pioneer of China’s opening-up to the outside world, Shanghai, in early 2002 introduced interim regulation to encourage multinationals to set up regional headquarter in Shanghai which was then supported by some relevant policies and regulations such as Measures for the Use and Management of Special Funds for Shanghai Municipality Encouraging the Development of Regional Headquarters of Multinational Companies, etc.  In 2011, Provisions of Shanghai Municipality on Encouraging Establishment of Regional Headquarters of Multinational Companies (hereinafter referred to as “Provisions on Regional Headquarters”) was promulgated which systematically combs relevant definitions, identification criteria and procedures, as well as related preferential policies with regard to regional headquarters of multinationals. Such series of encouragement and preferential policies has made the headquarters economy gradually become an important part of Shanghai's economic development.  According to official statistics, as of the end of July 2019, Shanghai has attracted 696 regional headquarters and 450 R&D centers of multinationals, and Shanghai has always been the city with the largest number of regional headquarters and foreign R&D centers in mainland China.

The revised Provisions on Regional Headquarters was implemented on September 1 of 2019, just a few days ago.  Meanwhile, in order to better support such provisions, Shanghai Municipal Government has issued detailed rules, namely, Several Opinions of Shanghai Municipal People's Government on Promoting Development of Regional Headquarters of Multinational Companies in the Municipality(hereinafter referred to as “Several Opinions of Regional Headquarters”) which was taken effectiveness on the same day as Provisions on Regional Headquarters. This article intends to introduce the latest relevant regulations in order to provide some reference for those enterprises that plan to set up regional headquarters/head offices of multinationals in Shanghai.1.Relevant definitionsProvisions on Regional Headquarters define Regional headquarters of multinational companies and Regional head offices of multinational companies as follows:

1.1 Regional headquarters of multinational companies(hereinafter referred to as “Headquarters”) means the only head office which is established in Shanghai by a parent company registered overseas in the form of investment or authorization to perform management and service functions for enterprises within the regions of one or more countries and which shall be independent legal persons.

1.2 Regional head offices of multinational companies(hereinafter referred to as “Head offices”)  means such foreign enterprises or branches thereof which do not attain the standards for regional headquarters of multinational companies, but actually undertakes multiple functions in supporting services such as management decision-making, fund management, procurement, sale, logistics, settlement, research and development, training etc. of its parent company within the regions of one and more countries.2.QualificationsAccording to Provisions on Regional Headquarters, hope to become Headquarters or Head offices, the following conditions must be met:

2.1Hope to become Headquarters, the following conditions must be met:(1)Foreign investment enterprise and independent legal person;(2)With its parent company’s asset no less than US$200 million;(3)Authorized by the parent company to perform headquarters functions within the regions of one and more countries;(4)With registered capital no less than US$2 million.

2.2 Hope to become Head offices, the following conditions must be met: (1)Foreign investment enterprise or the branch thereof and independent legal person;(2)With its parent company’s asset no less than US$100 million;(3)Authorized by the parent company to perform headquarters functions within the regions of one and more countries;(4)With registered capital no less than US$1 million, where the applicant is a branch, the working capital allocated by its parent company shall not be less than US$1 million.

  1. Procedures for identification

According to Provisions on Regional Headquarters, the procedures for identification of Headquarters or Head offices is mainly for materials submission and review.

3.1The following materials are required to submit an application:(1)The application; (2)The power of attorney issued by the parent company;(3)Photocopy of the business license, where the regional head office is a branch, the photocopy of business license of the Shanghai branch and proof document for allocation of working capital by the parent company shall also be provided;(4) The parent company's audit report in the recent one year;(5)The photocopy of business license and registration certification of both domestic and overseas enterprises to be authorized to be managed(6)Any other materials as requested by laws, regulations and rules

3.2Review: According to Provisions on Regional Headquarters, The Municipal Commerce Commission shall complete review within 8 working days from the date of receipt of application materials and make its decision (either to approve or reject).

  1. Preferential policies

According to Provisions on Regional Headquarters, Headquarters or Head offices will enjoy the following preferential policies. (The content below shall be applied to both headquarters and head offices if there is no special note)

4.1 Funding and Rewards: (1)Regional headquarters can be entitled to funding for starting up and property lease;(2)Those regional headquarters with comprehensive trading functions and significant contributions to economic development as well as good benefits can be entitled to rewards;(3)Those Asia, Asia Pacific or larger regional headquarters matching relevant criteria can be entitled to funding including starting-up funding within the first 3 years, 30% office rental funding within the first 3 years, one-off cash reward when the annual revenue reaches certain amount.

For more details, please refer to Measures for Shanghai Municipality on Encouraging Establishment of Regional Headquarters of Multinational Companies Development of Special Funds for Use and Management.

4.2 Fund Operation and Management: (1)May establishing a unified fund management system,  and foreign exchange operations shall comply with relevant foreign exchange controlregulations;(2)Those eligible regional headquarters and regional head offices may conduct  centralized management business of cross-border capital;(3)Investment companies may establish finance companies to provide centralized finance management services for its domesticinvested enterprises;(4)Tax counseling and services will be strengthened and green channel for processing of filing of non-trade foreign currency payment contracts and tax assessment will be provided;(5)May pen a free trade account and may process cross-border Renminbi-foreign currency payments and domestic Renminbi payments based on the convertibility principle.

4.3 Simplified Exit and Entry Formalities:(1)Eligible Chinese staff may apply for APEC business travel card, and enjoy  exit convenience for their overseas business travel;(2)Expatriates who need to have multiple temporary entries may apply for multiple entry visa valid for up to one year with each stay not exceeding 180 days; expatriates who need to have temporary entry shall apply for an entry visa from the China Embassy in their countries; for urgent case, an expatriate may apply to entry-exit  for a port visa;(3)Expatriates who need to stay in Shanghai for long time may apply for a Foreigner Residence Permit with a validity period of three to five years;(4)Senior executives such as legal representatives may be given priority in applying for a "Foreigner Permanent Residence Permit";(5)Shanghai Customs will provide green channel to go through health certificate for legal representatives and those senior executives with relation to headquarters’ functions.

4.4 Introduction of Talents: (1)The human resources and social security authorities and technology administration shall facilitate introduction of talents by regional headquarters and regional head offices to work in Shanghai and to apply for the relevant permits and certificates;(2)Those eligible domestic talents brought in may apply for Shanghai Hukou;(3)Overseas-educated persons with foreign nationality holding a university degree and above or equipped with special skills, overseas-educated persons and other professionals with foreign permanent residence who hold Chinese passports but have no Chinese Hukou, as well as professional from Hong Kong , Macau and Taiwan,  may apply for "Shanghai Residence Permit" (B Pass) . The aforesaid persons' spouse and children below 18 years or attending high school may apply for dependent pass;(4)The district where talents are located will provide convenience for the introduced talents in all respects such as school enrolment of children, medical insurance, application for talents' apartment etc.

4.5 Trade Facilitation: (1)For eligible regional headquarters and regional head offices, the Customs shall innovate regulatory system and model to enhance Customs clearance efficiency for their imports and exports;(2)Authorities such as Customs and foreign exchange  shall adopt regulatory measures to facilitate logistics consolidation by distribution centers established by regional headquarters and regional head offices.5.Supporting RulesSeveral Opinions of Regional Headquarters have refined and supplemented Provisions of Regional Headquarters as follows:

5.1 Intensifying encouragement of cluster effect of regional headquarters of multinational companies.

5.2Improving investment convenience for multinational companies.

5.3Improving fund use liberty and convenience of multinational companies. (Concretize Fund Operation and Management policy in Provisions of Regional Headquarters,for example ,allow them to centrally operate domestic and overseas funds of member enterprises under the multinational company's cross-border funds central operation and management business; Facilitate regional headquarters foreign Exchange Purchase and Settlement; Remove the restriction pertaining to the number of cooperating banks and domestic main accounts for cross-border fund pool business.)

5.4Improving trade and logistics convenience for multinational companies. (Concretize Trade Facilitation policy in Provisions of Regional Headquarters, for example; For chain enterprises implement the pilot scheme of "one permit multiple outlets" in the Municipality; Support launch of tariff guarantee insurance pilot scheme)

5.5Promoting R&D convenience for multinational companies.

5.6Strengthening complementary protection for headquarter function of multinational companies.ConclusionIn the context of global economic slowdown, many multinationals are proactively seeking change in response to the economic recessions. From the perspective of cost reduction and efficiency improvement, it will be a smart choice to set up regional headquarters/head offices in areas with more preferential policies.  As an oriental pearl which has early been among one of the cosmopolitan cities, Shanghai has unique advantages in attracting foreign investment. Coupled with the above-mentioned many preferential policies, we firmly believe that more and more multinationals will move into Shanghai.

Recently we have provided professional legal advice to a number of multinationals on setting up regional headquarters/head offices in Shanghai. Those multinationals which intend to set up regional headquarters/head offices may us to acquire professional legal supports.

杨春宝一级律师简介

杨春宝一级律师,大成上海高级合伙人、资本市场部主任、国资基金研究中心主任,大成中国区私募基金专业带头人、科技与文化法律研究中心联合牵头人。执业30余年,长期从事私募基金、投融资、并购重组法律服务,尤其对对赌研究颇深且具有非常丰富的实战经验,并专注于金融机构股权投资业务。2004年起多次入选The Legal 500"私募基金"和"公司与商业"等境内外各类律师榜单,代理的中国法院首例适用外国法律审理外国公司的董事损害小股东权益纠纷案入选上海高院发布的《上海法院域外法查明典型案例》和威科先行"要案头条"。入选上海涉外法律人才库、上海市司法局鼎新法治人才库、上海国有企业改制法律顾问团,具有上市公司独立董事任职资格,系多家知名高校的兼职教授或兼职研究生导师及上海市商务委跨国经营人才培训班讲师。出版《私募股权投资基金风险防控操作实务》等16本投融资法律专著。了解更多

常见法律问题

地区总部认定标准是否区分独立法人与分支机构?

第一,法律概念与规则解释方面,现行规定对地区总部与总部型机构的认定主体资格作了明确区分:地区总部必须是独立法人,且为唯一总部;总部型机构则可以是外资企业或其分支机构,均须具备独立法律主体地位或依法设立的经营实体。这一制度设计既保障总部对下属企业的统一管理,也便于各类跨国公司架构适用。

第二,案件事实与实务场景引用方面,文章列明了不同身份的差异化门槛:地区总部要求母公司资产不低于两亿美元、注册资本不低于两百万美元;总部型机构要求母公司资产不低于一亿美元,若申请主体为独立法人则注册资本不低于一百万美元,若为分支机构则母公司拨付的营运资金不低于一百万美元。例如,某跨国公司在中国已有多个子公司,但其上海实体仅承担区域性后勤支持,且母公司资产未达两亿美元,则可选择申请总部型机构而非地区总部。

第三,实务指引与风险提示方面,母公司选择独立法人还是分支机构形式,应综合考虑税收待遇、责任承担、资金拨付便利以及后续升级空间。分支机构形式虽无需单独注册资本,但需提供母公司拨付营运资金的充分证明,且其在法律上不独立承担责任。企业同时应关注授权管理的境内外企业范围是否清晰,避免因地域或职能界定模糊影响认定结果。若未来经营规模扩大、达到地区总部标准,应及时申请变更身份以享受更高层级的政策优惠。

以上内容仅供参考,不构成法律意见。如需专业法律服务,请联系杨春宝一级律师:chambers.yang@dentons.cn

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