Article I These Regulations are formulated in accordance with the related laws and ordinances and local actuality, with a view to expanding reform and opening-up, improving the invest environment, and promoting economic development. Article II For the purpose of these Regulations, "National Headquarters" shall mean the foreign investor's sole office which is located in Guangzhou (including the county-level cities of Conghua and Zengcheng; same below) and performs operational and managerial duties for the foreign investor's enterprises in China or beyond. For the purpose of these Regulations, "Regional Headquarters" shall mean the foreign investor's general office which is located in Guangzhou and performs operational and managerial duties for some or all of the foreign investor's enterprises within a certain region of China. National and regional headquarters can be set up as an investment company, management company, R&D center, or manufacturing enterprise with headquarters status. Article III The Guangzhou municipal foreign trade and economic cooperation authority is responsible for recognizing national and regional headquarters set up by foreign investors in Guangzhou, and for coordinating with related government departments in administrating national and regional headquarters. The industry and commerce administration, finance, tax, foreign affairs, public security authorities shall perform administration of national and regional headquarters within their respective scopes of authority and according to the law. Article IV Investment companies set up in Guangzhou with approval of the Ministry of Commerce may be recognized as national or regional headquarters. An investment company, accredited foreign-invested R&D center or manufacturing enterprise with headquarters status which applies for recognition as national or regional headquarters shall fulfill the following requirements: (I) Its parent company has a good credit standing and had total assets of USD 300 million or more in the year before the application for recognition is filed. (II) It has three or more foreign-invested enterprises in China or has been authorized to manage more than three foreign-invested enterprises in China, and is responsible for providing management and services for these enterprises. (III) Its foreign-invested enterprises in China or the foreign-invested enterprises which it has been authorized to manage have a combined paid-in registered capital of USD 30 million or more. (IV) It has a registered capital of USD 2 million or more. (V) It has independent juristic person status. Article V National and regional headquarters set up in Guangzhou, in addition to their original scope of business, may engage in the part or all of the following business, management and service activities according to laws and regulations: (I) Investment and business operations in fields where foreign investment is allowed by the state. (II) Marketing services, including import and export business and commodity distribution business or after-sales services on behalf of enterprises under their management. (III) Capital operation and financial management – with the approval and under the supervision of the foreign exchange administration, national and regional headquarters may perform foreign exchange balancing among enterprises under their management; with the approval of banking regulators, national and regional headquarters may set up a general pool of funds at a bank in China for the purpose of allocating funding among their subsidiary companies with funding surplus or shortage, and may assist enterprises under their management in seeking loans and provide guarantees for such loans. (IV) Technological support and research and development. (V) Employee training and management and assistance for enterprises under their management in managing human resources. (VI) Information and logistics services – the provision of integrated services, including market information, investment policy consultancy, transport and warehousing for enterprises under their management. (VII) Provision of outsourcing services for overseas companies. (VIII) Other business, management and service activities allowed by laws and regulations. Article VI Investment companies, management companies, R&D centers or manufacturing enterprises with headquarters status which has been set up by foreign investors in Guangzhou (hereinafter referred to as "Foreign-invested Enterprises") shall apply to the Guangzhou municipal foreign trade and economic cooperation authority for recognition as national or regional headquarters. The application shall be accompanied by the following documents: (I) A letter of application signed by the legal (authorized) representative of the existing foreign-invested enterprise. (II) A letter of authorization signed by the legal (authorized) representative of the parent company, authorizing the setup of the national or regional headquarters and detailing the scope of authority of the headquarters. (III) The permit, business license and capital verification report (all in photocopies) of the existing foreign-invested enterprise. (IV) The parent company's credit standing certificate, registration document (photocopy) and legal representative certificate. (V) A list of the enterprises receiving management and services from the national or regional headquarters (the list shall be accompanied by photocopies of the enterprises' permits, licenses, and capital verification reports). (VI) Other documents required by laws and regulations. New investment companies, management companies, R&D centers or manufacturing enterprises with headquarters status, when applying for recognition as national or regional headquarters, shall furnish the following documents, in addition to the above documents. (I) Articles of Association and feasibility study report. (II) A certificate of the legality of the source of the company premises (photocopy). (III) Balance sheets of the parent company for the recent three years. (IV) A name list of the members of the Board of Directors appointed by the parent company. (V) Other documents required by laws and regulations. Documents shall be provided in original if no photocopy is specified. Where an agent is hired to complete application formalities or where documents provided are signed by a person other than the legal representative of the parent company, a power of attorney shall be furnished. Article VII The Guangzhou municipal foreign trade and economic cooperation authority shall complete the processing of the application within 15 work days of receipt of the application, and shall award recognition certificates to successful applicants. Article VIII A foreign-invested enterprise recognized as national headquarters will receive a reward of RMB 5 million from the Municipal Government, and a foreign-invested enterprise recognized as regional headquarters will receive a reward of RMB 2 million. Article IX Newly established organizations in Guangzhou which have been recognized as national or regional headquarters and have purchased or constructed office buildings (not including auxiliary and supporting facilities) will receive a subsidy of RMB 1,000 for each square meter of the office space. All subsidies for the office space will be paid in installments within three years, and during the subsidizing period, the office space shall not be rented or sold to a third party. If the organizations rent office space for self use, 30% of the rentals will be subsidized for three years of occupancy at the market rates publicized by the municipal land and housing authority for commercial property of the same period of time and in the same location. During the subsidizing period, the rented office space shall not sublet to a third party and shall not be devoted to any other purpose. National or regional headquarters which have been set up in Guangzhou and recognized as national or regional headquarters before these Regulations take effect will receive a subsidy at 50% of the above rates if they have purchased, rented or built additional office space to cope with business expansion. The floor area of office space eligible for subsidy which has been purchased, rented or built by the foreign-invested national or regional headquarters shall be determined by the municipal land and housing authority. National or regional headquarters which have violated the above provisions concerning the sales, renting, subletting of office space or the change of the designated purpose of the office space, shall refund the subsidies paid and pay interest on the subsidies at the interest rate for bank loans during the same period time. Article X National and regional headquarters set up as a branch of head office, and national and regional headquarters which have made outstanding contributions to the city's economic development and generated significant socio-economic benefits, will be rewarded by the Municipal Government. The detailed measures for such reward will be formulated and implemented by the municipal financial authority and the municipal foreign trade and economic cooperation authority. Foreign senior executives working at the national or regional headquarters who have made outstanding contributions to the city's economic development will be honored by the Municipal Government. Article XI Recognized national or regional headquarters will enjoy preferential tax policies formulated by the state. Subject to the approval of the Municipal and Provincial Governments, national and regional headquarters may be partially or completely exempted from local income taxes according to state regulations. National and regional headquarters which have purchased or constructed properties will be exempted from urban real estate tax for three years starting from the date of the purchase or completion of construction. National or regional headquarters will be exempted from business income taxes on earnings from R&D operations, technology transfers, technology development and related technological consultancy and services. National and regional headquarters engaged in industries where foreign investment is encouragde by the state will be exempted from import duties and import VATs on equipment imported for self use with funds from the total investment, but not on commodities which are not exempted from duties by the state. Foreign employees working at national or regional headquarters will be entitled to preferential policies on individual income taxes on housing subsidies, home leave payments and children education subsidies according to related regulations. Article XII National and regional headquarters recognized R&D centers will be entitled to preferential national and municipal policies on foreign-invested R&D centers. National or regional headquarters accredited as technologically advanced foreign-invested enterprises or exporters will be entitled to related preferential policies. Article XIII If national and regional headquarters import bonded raw material and parts and components under the trade of processing with supplied materials and supply the imports to manufacturing enterprises in China which are invested or managed by them for processing, these manufacturing enterprises may apply to the tax authority for exempted from VAT on the processing or processed goods. Article XIV National and regional headquarters are encouraged to set up transnational procurements centers and logistics centers in Guangzhou. Subject to approval in accordance with applicable state regulations, transnational procurements centers and logistics centers may be granted import and export rights and entitled to tax rebate policies. National and regional headquarters may apply for the setup of bonded warehouses and factories. Article XV With the approval of the Municipal and Provincial Governments, national and regional headquarters may be entitled to a limited lump-sum payment or discounted rates for the use of municipal services and public utilities. Municipal authorities shall provide active support and make elaborate planning to secure access to public facilities, including water, power, gas and telecommunications, for national and regional headquarters. Article XVI National and regional headquarters are encouraged to take part in the reform, transformation or restructuring of enterprises in Guangzhou by equity participation, acquisition, merger, contracting, lease, trust, or other means. Restructured enterprises which meet the standards prescribed in related laws and regulations for foreign-invested enterprises will be granted foreign-invested enterprise status. Article XVII Subject to the approval of the foreign exchange administration, national and regional headquarters may, within the existing legal framework for entrusted loans, perform centralized management of the foreign exchange funds of their member companies in China at a designated bank by means of centralization within the foreign exchange position date. Subject to the approval of the foreign exchange administration, financial centers or fund centers set up by national and regional headquarters may open an offshore account at a designated bank in China for the purpose of performing centralized management of the foreign exchange funds of their overseas member companies. The income scope of an offshore account is limited to inward foreign exchange funds remitted by offshore member companies and outward foreign exchanges funds remitted by onshore member companies with approval of the foreign exchange administration. The disbursement scope of the offshore account is limited to funds remitted to offshore member companies. Subject to the approval of the foreign exchange administration, national and regional headquarters, when disbursing funds abroad, may conduct foreign transactions of foreign exchange, RMB and foreign exchange swap business. National and regional headquarters fulfilling related requirements may apply to the foreign exchange administration for overseas disbursement qualification. Subject to the approval of the foreign exchange administration, non-trade sales and payments of foreign exchange which is not clearly provided for in existing laws may be handled by the designated foreign exchange bank provided that the amount involved does not exceed USD 100,000 or equivalent; such sales and payments of foreign exchange shall be handled by the designated bank after being reviewed and approved by the foreign exchange administration provided that the amount involved exceed USD 100,000. Article XVIII Favorable consideration will be given to the exit applications of Chinese personnel working at national and regional headquarters will be given if they need to travel to Hong Kong, Macao, Taiwan or a foreign country for business. Foreign senior executives and technical personnel working at national or regional headquarters who need multiple entries may apply for multiple-entry visas valid for six months or one year. Foreign employees at national and regional headquarters who need to stay in Guangzhou on a long-term basis may apply for foreigner residence permits valid for one to five years. Foreign employees who need to visit the national or regional headquarters in Guangzhou may apply to the public security bureau for visas at the points of entry according to applicable state regulations. Article XIX Assistance will be given to foreign senior executives working at national or regional headquarters to facilitate the entry, exit and residence of their family and the schooling of their children. Article XX The Guangzhou municipal foreign trade and economic cooperation authority shall perform supervision and administration of recognized national and regional headquarters, and shall revoke the recognition certificate of the national or regional headquarters which have failed to comply with the requirements for national or regional headquarters status and terminate preferential policies for them. Article XXI These Regulations shall be applicable to national and regional headquarters set up in Guangzhou. For regional and regional headquarters of foreign-invested financial institutions, the Guangzhou Detailed Implementation Measures for the Decision to Support Banking Industry Development shall apply. Article XXII These Regulations shall also be applicable to national and regional headquarters set up in Guangzhou by Hong Kong, Macao and Taiwanese investors. Article XXIII "Senior Executives" in these Regulations refer to senior management personnel at the national or regional headquarters, including the chairman and vice-chairman of the Board of Directors, general manager, vice general manager, and superintendents. Article XXIV The Guangzhou municipal foreign trade and economic cooperation authority has the sole right to interpret these Regulations. Article XXV Where there is a discrepancy between the law and these Regulations concerning national or regional headquarters, the law shall prevail. Article XXVI These Regulations come into force on the date of promulgation and will be effective for five years. (Translated by Guangzhou Association of Foreign Affairs Translators) |