Beijing offers cash subsidies to multinational companies

Jul. 1, 2009 (China Knowledge) - The Beijing government will offer cash subsidies to encourage multinational companies to set up their Asian headquarters in Beijing, the capital of China, state television reported on Tuesday.

The subsidy will range from RMB 5 million to RMB 10 million depending on the company's size in terms of registered capital.

The Beijing government will offer a one-time bonus to multinational firms that establish or relocate their regional headquarters this year. The bonus will also be paid to firms that already did so this year.

Companies that generate annual sales revenue of more than RMB 100 million at their headquarters can also earn a bonus.

The move is part of Beijing's efforts to compete with Shanghai, Hong Kong and Singapore as the choice for Asian headquarters.

In May, Beijing lowered the registered capital requirement for foreign firms establishing regional headquarters in the city and streamlined work visa and residence permit processes.

Around 120 foreign firms, mainly from Japan, the U.S. and Europe, had established their regional headquarters in Beijing as of the end of May. Companies with headquarters in Beijing accounted for 1% of the total number of foreign-invested companies in China, while their sales revenue accounted for 23% of the total of foreign-invested companies.