Sept. 26 – China recently implemented several incentive programs to attract talent to the Chinese financial services sector. Local authorities in Beijing, Shanghai and Shenzhen have introduced new measures to attract financial institutions to set up in their jurisdictions.
In Shanghai, financial institutions based in Pudong will benefit from a new incentive program. Security houses, banks and insurance companies as well as qualified individuals such as senior executives, individuals with managerial roles, and professionals with extended experience (three years or more) working for a financial institution also stand to benefit from the incentives.
These incentives include:
- Senior executives of newly established financial institutions can apply for a housing subsidy of up to RMB200,000
- Senior executive can apply for an IIT refund of up to 40 percent
- Managers and professionals can apply for an IIT refund of up to 20 percent
The incentive program expires on December 31, 2010.
Shenzhen, home to China’s smaller stock exchange, is also looking to attract more financial services talent. Local authorities have indicated their intention to implement new incentives, but detailed measures have yet to be released.
Beijing has been working hard to set up a world class financial center in the Financial Street, China’s answer to Wall Street, and they too are using incentives to attract financial talent.
Incentives in Beijing include:
- IIT exemption to those who contribute “greatly” to the financial services sector
- Preferential IIT treatment for stock awards to be taxed over a five year period
- On the purchase of one piece of real estate or one automobile, IIT refunds of up to the lesser of RMB300,000 or 80 percent of IIT payments retained by the Beijing municipality
- Deduction of up to 20 percent of employee and employer housing fund contributions
As the talent pool for the financial services sector shrinks, Beijing, Shanghai and Shenzhen will continue to lean on incentive programs such as the ones above to attract talent to these incentives will play out in Shenzhen, or how the three cities will fair as they compete for talent in a very small poll remains to be seen.
For more information on China’s financial sector, please see the July/August issue of China Briefing.