Incentives in Shenzhen for Attracting Foreign Talent
By Jake Liddle
Shenzhen has been implementing a variety of preferential policies and subsidies to attract high-level foreign talent to the city in the last few years. This year, regulations have been amended and policies have been promulgated to incentivize living and working in the vibrant city.
Alberto Vettoretti, Managing Partner of Dezan Shira & Associates says: “The Shenzhen municipal government has been very active in formulating incentives to attract foreign and local talents to the city, which has recently become one of the most expensive in the Mainland in terms of real estate. Housing prices there have now reached levels comparable to those in Silicon Valley, but salaries are still a fraction of the US innovative hub if taken on an average basis.”
In this article, we detail three recent government initiatives that provide opportunities for foreign talent.
Amendments to the Shenzhen Housing Fund regulation
The management committee of the Shenzhen Housing Accumulation Fund has made changes to its regulation, including amendments to introduce foreign nationals in the housing fund plan. The amendments came into effect on June 1, 2017, affecting both businesses and individuals in the city. The amendments are detailed below:
Introduction of foreign nationals
The amendment has further expanded the scope of the fund to include foreign nationals with a valid passport, and residents of Hong Kong, Macau, and Taiwan in possession of a ‘Mainland Travel Permit’ for their respective territories, who are employed in Shenzhen. Individuals with the correct credentials are able to enjoy the benefits of the fund the same as Shenzhen residents, and along with their employers, can contribute a portion of their salary to the fund tax-free. Inclusion in the plan is not mandatory, and is used as an incentive.
Authorities made the amendment in lieu of previous efforts to attract qualified foreign talent by granting them right of abode. In 2015, an amendment only permitted for foreign nationals in possession of a ‘Permanent Residence Permit’ to participate in the fund.
Business registration and deregistration of contributions simplified
Another amendment to the Shenzhen housing fund simplifies administrative procedures, namely the requirements for application materials for businesses to pay contributions to the housing fund.
The requirement of companies to provide a business license and proof materials of change of information (relating to economic, qualification credentials, or the organization code of the business license) when processing registration or deregistration of contributions towards the housing fund, have been cancelled. Now the Shenzhen Housing Accumulation Fund Center utilizes the governmental information sharing platform to search and verify credentials, greatly simplifying the administrative procedure.
Transfer of personal housing funds
If a worker registered as a Shenzhen resident contributing to the fund leaves Shenzhen and cancels their residence registration, the remaining amount in the housing fund can be withdrawn.
For those directly transferring the housing fund account balance to another region’s housing fund, contributions can continue from the amount accrued. Under this situation, applicants can use a dedicated application form for use of transferring the personal housing fund account to other regions.
Subsidies for high level foreign talent in Shenzhen
As part of its 2017 Interim Measures for Attracting High-Level Foreign Talents, the Shenzhen Municipal Government is offering a series of subsidies of up to RMB 3 million for foreign talents in possession of a Permanent Residence Permit.
Subsidy amounts are awarded in increments to talents classed in three tiers. Further subsidies cover spouse’s employment expenses, education for children, residence permits of both the beneficiary and dependents, medical care, social insurance, and tax. The cash subsidies are as follows:
- Class A – RMB 3 million (US$450,000)
- Class B – RMB 2 million (US$300,000)
- Class C – RMB 1.6 million (US$240,000)
The tier system assesses candidates on a variety of criteria, such as membership, fellowship or chairmanship of academies of science or engineering, innovative group programs, scientific journals, and famous academic organizations or universities, etc. in specified countries.
Support for high-level talent teams in innovation and startups in Shenzhen
A series of support subsidies have been made available this year under the Shenzhen Municipal Government’s ‘Peacock Initiative’, a program started in 2011 for attracting high-level foreign talent in the field of entrepreneurship and innovation in Shenzhen. Subsidies are available for teams engaging in startup businesses in the fields of IT, new-gen IT, biology, new energy, energy conservation, new materials, environmental protection, marine sciences, aerospace engineering, health, robotics, wearable equipment, smart equipment, and other emerging industries.
A maximum of RMB 100 million (US$15 million) per award is available for teams, with an average award of RMB 20 million (US$3 million). For teams who display potential, but did not successfully apply to join the Peacock Initiative, awards of up to RMB 5 million (US$750,000) are offered. Teams should fulfil the following requirements to be eligible for the support:
- Be registered in Shenzhen with independent legal representatives;
- Be composed of foreign experts, overseas returnees, and/or members with a background of experience overseas;
- Be composed of one leader and at least two core members;
- Have been working as a team for more than two years, equipped with high tech innovative skills and academic level, and have shown substantial results;
- The team leader should be no older than 60, and the average team age should be no more than 55;
- After receiving the subsidies, more than half of the team core members and the leader should be working full time in Shenzhen for more than five years, and other members have to work in Shenzhen for an average of more than six months per year. No changes of leaders or core members are allowed during the term of the program.
Plenty on offer
The many incentives offered by the Shenzhen Municipal Government align with the initiatives rolled out nationwide to attract high-level talent as part of China’s effort to create an entrepreneurial and innovation driven economy.
The recent relaxation of national visa application procedures provides talented foreign individuals with simplified, accelerated, and more efficient approval processes, on top of monetary support and grants. Meanwhile, certain policies in the city help ease the hiring process and contribution towards social security funds for businesses. This means that both businesses and individuals should be aware of the incentives out there, and to make the most of them.
“While the government has been pioneering many policies easing the burden of doing business locally (such as the five in one online business license application and the ease of commuting via dedicated digital fingerprint channels for foreigners), a lot more is still needed if Shenzhen does not want to lose professionals to up and coming ‘innovative hubs’ in the country or larger and more dynamic cities like Shanghai.” Vettoretti added.
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