In the second article in our two-part series on the Suzhou Industrial Park (SIP), we examine the SIP’s major investment incentives and favorable policies offered to enterprises and talents.
In part one, we profiled the SIP and explained why it has become such a popular foreign investment destination in China (see the article here).
To attract high-quality enterprises and talents, Suzhou Industrial Park (SIP) has introduced a slew of unique incentives and favorable polices.
Enterprises engaging in the manufacturing industry and in the ‘three emerging industries’ – biomedicine, nanotechnology, and artificial intelligence (AI) – as well as headquarter enterprises can secure attractive rewards, rent subsidies, and other subsidies.
Top or urgently needed talents working in the headquarter enterprises may enjoy cash rewards and house purchasing subsidies. For those starting up a business in the Park, the SIP grants business development funds, loan support, and various subsidies covering rent, housing, and R&D.
This article will explain the above policies. It also highlights some noteworthy information about the SIP’s special measures to facilitate foreign talents’ entry and exit as well as work and life in Suzhou.
The Suzhou Industrial Park focuses on developing six major industries, officially called the ‘2+3+1 industrial layout’. They are:
On March 9, 2021, the SIP management committee released Several Measures on Improving the High-Quality Development of Manufacturing Industry (Su Yuan Guan No.3).
To develop high-end manufacturing industrial clusters, foster core high-tech industry supply chains, and encourage service-oriented manufacturing – the SIP offers attractive cash incentives and credit support to qualifying enterprises.
The incentives listed in the following table have come into force on the date of promulgation and will be valid for five years.
To support the development of the three emerging high-tech industries in the SIP, the Park offers large amounts of subsidies and incentives to enterprises in related sectors in the enterprise’s R&D and operation stages.
For the biomedicine industry, the Park aims to bolster the production of chemical medicine, biologic products (including biological medicine, blood products, and vaccines), Chinese traditional medicine and natural products, high-end medical equipment and devices (in Category II or III), new biotechnology, and emerging therapies, etc.
In the AI industry, the SIP wants to achieve the industrialization of AI technology and foster a world-class AI industrial cluster. Thus, various rewards and subsidies are available for leading enterprises settled in the Park, especially those that have realized innovation and application of AI technology, such as smart chips, smart software, and smart hardware.
In terms of the nanotechnology industry, the SIP welcomes enterprises engaged nanomaterials, micro and nano fabrication, nano energy technology, nano biomedicine, and other related fields.
The Suzhou Industrial Park has been constantly encouraging setting up headquarter enterprises here to boost the Park’s ‘headquarter economy.’
On June 2, 2020, the SIP issued Several Opinions on Promoting High-Quality Development of the Headquarters Economy in SIP (Su Yuan Guan  No.45), aiming to attract headquarter enterprises to set up in the park.
Two types of headquarters (HQs) – “integrated HQs” and “functional HQs” – that are established after January 1, 2020 and meet the stipulated requirements are entitled to a whole range of settlement rewards over the course of five years (100 percent of the company’s local economic contribution over the first two years and 50 percent over the later three years).
HQs that are already in operation in the SIP can also obtain business rewards (80 percent of the increase in the company’s local economic contribution over the previous year).
For both types of newly established HQs, rent subsidies not exceeding 50 percent of the actual expenditure in renting office space (excluding facilities) can be granted within three years from the year following the HQ’s establishment. The rent subsidies are also available for existing HQs, which purchased new office space or expanded their office space.
The subsidized area should be no more than 2,000 square meters for integrated HQs and 1,000 square meters for functional HQs. Also, the subsidy amount is no more than RMB 5 million (US$774,440) for integrated HQs and RMB 3 million (US$464,660) for functional HQs.
For HQs that are recognized as “innovative HQs” by the SIP, “case-by-case financial support” can be provided.
In addition to the above, top talents working for the eligible headquarter enterprises can be granted housing subsidies on a case-by-case basis, of up to RMB 5 million (US$774,440).
High-end talents and urgently needed talents who have made outstanding contribution in the headquarter enterprises can be paid at five percent to 20 percent of personal salary, of up to RMB 400,000 (US$62,000). Those who have made special contributions can be awarded up to RMB 1 million (US$155,00).
To further promote the opening-up and boost the recruitment of foreign talents, the Suzhou Free Trade Area, which is mainly located in the SIP, released Several Measures to Achieve Better Work and Life Services for Foreign Talents (Trial) on February 20, 2021. The document covers 19 measures to facilitate foreign talent’s entry, exit, and work in Suzhou, to improve the evaluation and incentive mechanism for foreign talents, and to optimize social service systems (social security, medical services, schooling for children, etc.) for foreign talents.
You may find the full official document in English here. In the following content, we highlight some noteworthy information.
Qualifying foreign high-end talents working in the YRD coming to work in the Suzhou Area from other areas of the YRD can be granted a work permit and work-category residence permit for up to five years. Foreign high-end talents (Class A) who work in the YRD do not need to apply for or change their residence permit but can directly work for a part-time job or engage in entrepreneurship in the Suzhou Area.
Recognized high-end foreign talent can use the personal commitment system when applying for a work permit. This exempts certificates of no criminal record, work experience documents, and other application materials. A green channel involving simplified document verification process will be available for foreign professionals.
Foreign high-end talent (Class A) who fulfill the relevant conditions with an annual salary of RMB 400,000 or above and have paid individual income tax in Suzhou Area can receive an award of no less than 5 percent but no more than 20 percent of their annual salary, and not higher than RMB 400,000 per person per annum. Those who made special contributions will be eligible for a maximum of RMB 1 million per annum.
For top talents that fall within one of the stipulated levels, such as academicians from developed countries, winners of the state’s top science and technology award, and Nobel laureates, who start a business project with high-level innovation or broad market prospects or in three emerging industries like biomedicine, AI, and nanotechnology – the SIP can grant a start-up fund, credit support, rent and housing subsidies, and other subsidies.
For more detailed specifications on the qualification requirements and application methods to avail each favorable policy released in Suzhou Industrial Park, please contact us at China@dezshira.com or Suzhou@dezshira.com.
China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done so since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at email@example.com.
Dezan Shira & Associates has offices in Vietnam, Indonesia, Singapore, United States, Germany, Italy, India, and Russia, in addition to our trade research facilities along the Belt & Road Initiative. We also have partner firms assisting foreign investors in The Philippines, Malaysia, Thailand, Bangladesh.
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