Qianhai Development Zone Offers Incubators Free Rent & Low Taxes
SHENZHEN – South China’s Qianhai Development Zone – or to give it its full title, the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone – has opened a 15 square kilometer incubator hub for entrepreneurs from Hong Kong and overseas. The Zone itself has been billed as a Hong Kong-Shenzhen joint development, and to date has focused on attracting corporate financial services.
HSBC, for example, have committed to the zone, as have Standard Chartered, the Bank of East Asia and China’s Commercial Bank, based on the zone’s ability to offer cross-border RMB loans. However, the Qianhai bankers and forex traders may soon find themselves rubbing elbows with T-shirted entrepreneurs aged 18 to 45 who are looking to start their businesses there.
The Shenzhen government has specifically targeted IT and promised that internet access will be better than is permitted elsewhere on the mainland. One-third of the land set aside for the entrepreneurs – known as the Shenzhen-Hong Kong Youth Innovation & Entrepreneur Hub – will be available to Hong Kong residents, the rest to foreign investors. Incentives for approved projects include one year of free rent and the second year at 50% for both residential and office space. Also, both individual income tax and corporate income tax rates in certain industries are set at 15 percent. Normal tax rates in China are 25 percent for corporate and up to 45 percent for individual income tax.
“It’s an interesting development,” says Alberto Vettoretti of Dezan Shira & Associates’ Shenzhen office, the firm’s China Managing Partner. “We are looking into the qualifications for foreign entrepreneurs to set up in Qianhai, although competition for them will be tough.” The new entrepreneurial hub includes office and residential buildings as well as education, exhibition and sports facilities.
Meanwhile, a gold vault, which will facilitate gold as a commodity trading hub, will also opening in Qianhai, in March. The vault will be operated by the Chinese Gold and Silver Exchange Society and will allow for gold to be traded and supplied on-demand to Shenzhen’s jewellery factories. Sixty-eight gold trading firms are behind the scheme. Shenzhen manufacturers some 70 percent of all gold jewellery in China, and the gold facility in Qianhai is expected to attract international gold firms hoping to access the PRC market.
Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email firstname.lastname@example.org or visit www.dezshira.com.
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