January 14

minutes reading time

How to get 380,000 USD from the Shenzhen government for investing in yourself

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People often ask me how we are doing in China. Many countries are currently in lockdown, and positive news from China could be a sign for their own recovery.

Well, positive news I have!

Shenzhen’s economy is booming, which appeals to foreign investors. The local government has therefore released a plan to make investing in Shenzhen even more attractive. For total clarity: this plan excludes investments in real estate and financial projects.

The city wants to reward foreign companies that have invested seriously in their Shenzhen entity with up to 385,000 USD in grants. Investing between 5 and 10 million USD results in a kickback of 1 million RMB, between 10 and 20 million USD in 2 million RMB, and the maximum of 2.5 million RMB is for investments over 20 million USD.

These investments must have been made in 2020. However, it is my experience that support schemes such as these return every year and it could be worth to investigate this if you plan to make investments this year.

Shenzhen is a popular investment destination for foreign companies. The city has probably the most modern government from any Chinese city ever since the start of Shenzhen as an experiment by Central Government. In that time, attracting foreign investment played a primary role in financing the city. We can see this from the establishment of the Futian Bonded Area, the first Free Trade Zone of Shenzhen.

By the way, the cover image of this post is of Nanshan district, the Most Wealthy district in all of China!

(Click the image to enlarge)

Shenzhen also never had a problem with attracting foreign talent. With this plan, the city shows to focus on attracting serious companies. It goes in line with the in recent years improved legal rights of overseas investors.

Since 1981, over 90,000 foreign-owned companies have been registered in Shenzhen, which is about 2% of the total amount of companies. However, they generate 20% of the city’s GDP, 40% of its import and export, and 30% of its tax revenue.

Shenzhen’s enjoyed receiving over 7 billion USD in foreign investments last year. That is over 6% of the country’s total. The funds mainly come from Hong Kong, the UK, France, Germany, Japan and Singapore.

Question remains: What will you do with this information? If you feel engaged, let us meet in the comments and let TroubleMaker guide your way into China!

Featured image by Sparktour - Own work, CC BY-SA 4.0, https://commons.wikimedia.org/w/index.php?curid=71194827


Tags

Economy, Foreign-owned companies, Investing, Shenzhen, WFOE


About the author

The Map, guiding challenged companies to a safe haven

Henk Werner

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