By Salina Leong

Shanghai Municipal Government has recently issued new provisions to encourage multinational companies to set up their regional headquarters in Shanghai. The new provisions not only shorten the application process but also loosen up significantly on application criteria. There are five key amendments to the current regulations:

1. The Municipal Foreign Economic Relations and Trade Commission will now complete the examination process within 10 working days from the date of receiving the application and other documents. In the past, it required 30 working days to fully complete examination.

2. The new provisions no longer require the parent company to invest the minimum amount of US $30 million in China. The total minimum registered capital required is now US $10 million. This significantly reduces the entry threshold for multinational companies.

3. With the new provisions in place, the regional headquarter may now engage in two new business activities, i.e. logistics operations (domestic distribution and imports and exports) and outsourcing.

4. The new provisions also simplify customs clearance procedures and improve customs processes, allowing for a significantly better understanding of the requirements.

5. There is also a significant improvement in visa, work and residence permit procedures for non-Shanghainese staff of the regional headquarter in terms of documents required, time of completion and validity period.

Salina Leong, The JLJ Group