Comprehensive Policy

Official Reply of the State Council on Policies Supporting the Development and Opening Up of the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone

  State Council No. 58 [2012]
People’s Government of Guangdong Province, Development and Reform Commission:
  Development and Reform Commission’s Request for Instructions on Submitting Policies Supporting the Development and Opening Up of the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone (Draft for Examination) (No. 767 [2012], Development and Reform Region) has been received. The following official reply is hereby made:
  I. The Shenzhen-Hong Kong Modern Service Industry Cooperation Zone is supported to practice pilot policies more special than those of the Special Economic Zones to develop an institutional & mechanism innovation zone for modern service and a modern service cluster area, a pioneering zone for close cooperation between Hong Kong and Mainland China, and a leading zone of industrial upgrading in the Pearl River Delta.
  II. Qianhai is supported to carry out pilot programs on financial reform and innovation as a demonstration of opening up China’s financial industry.
  i. Qianhai is permitted to explore and broaden offshore RMB backflow channels to cooperate and support offshore RMB banking business in Hong Kong, in order to establish a cross-border RMB business innovation pilot zone.
  ii. Banks in Qianhai are supported to grant RMB loans to offshore projects. Efforts should be paid to study the possibility of Hong Kong banks offering RMB loans to enterprises and projects in Qianhai under the framework of Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA).
  iii. Eligible enterprises and financial institutions registered in Qianhai are supported to issue RMB bonds in Hong Kong in the range approved by the State Council, to support the development of Qianhai.
  iv. Qianhai equity investment fund of funds is supported to be established. 
  v. Foreign equity funds, including those of Hong Kong, are supported to innovate and develop in Qianhai, to actively explore new models in capital settlements, investment and fund management for foreign equity investment enterprises.
  vi. The financial market of Qianhai will be further open to Hong Kong. Under the framework of CEPA, it is recommended to appropriately lower entry conditions for Hong Kong financial enterprises to start institutions and carry out financial business in Qianhai.
  vii. According to the China’s overall deployment and regulated development requirements, Qianhai is supported to start various kinds of innovative financial institutions that help enhance market functions, to explore and help establish a trading platform for new elements, to reform the financial system and mechanism and to innovate business models with the goal of serving the real economy.
  viii. Hong Kong financial institutions and other domestic and foreign ones are supported to establish international or national administration headquarters and operation headquarters in Qianhai in order to bring the financial industry in Qianhai up to the international level, and to promote the financial industry and the cluster development of headquarters in Qianhai.
  Specific measures to implement the policy above will be made by the Development and Reform Commission, People’s Bank, the China Banking Regulatory Commission (CBRC), the China Securities Regulatory Commission (CSRC) and the China Insurance Regulatory Commission (CIRC ) according to procedures.
  III. Under the framework of the national tax reform, Qianhai is recommended to play the pilot role in the tax reform for the modern service industry.
  i. On the basis of developing a category about industrial entry and preferential access, corporate income tax rate is to be reduced to 15% for eligible enterprises in Qianhai. The category about industrial entry and preferential access will be made by the Development and Reform Commission, Ministry of Finance and other relevant departments.
  ii. For foreign high-end and scarce talents working in Qianhai who meet the needs of Qianhai’s industry development plan, the subsidies they receive from Shenzhen Municipal People’s Government according to the negative balance of mainland and overseas individual income tax will be exempt from taxation.
  iii. Modern logistics enterprises registered in Qianhai can enjoy the policy of business tax paid by difference, as is currently applied only to pilot logistics providers.
  IV. To strengthen the cooperation in legal affairs.
  i. The possibility of setting up branches for Hong Kong arbitral institutions.
  ii. Further strengthen cooperation in legal industry between mainland and Hong Kong, and explore ways for law firms from Hongkong and mainland to establish joint operation in Qianhai. The legal business in Qianhai should be further open to Hong Kong under the framework of CEPA and other supplemental agreements.
  V. Qianhai is supported to set up a Shenzhen-Hong Kong talent special zone, to establish a sound mechanism to pool talents for the modern service industry, and to build a convenient work and living environment.
  i. Innovate the management mechanism and  formulate relevant policies and measures, in order to provide convenience in the employment, livelihood, entry and exit for talents from overseas, Hong Kong, Macau and Taiwan, overseas Chinese and Chinese students returning from foreign countries.
  ii. Include Qianhai as one of the nationally approved pilot areas for mutual recognition of professional qualification in Guangdong Province.
  iii. Allow professionals with Hong Kong license to directly provide professional services to enterprise and residents in Qianhai and the servicing area is limited to Qianhai. Detailed policies, measures and management practices will be formulated by industrial authorities.
  iv. Allow Hong Kong professionals with CPA certificate to be partners of mainland accounting firms in the pilot area of Qianhai. Specific pilot scheme will be developed by Shenzhen and carried out after approved by the Ministry of Finance.
  VI. Qianhai is supported to start pilot programs on the cooperation between Hong Kong and mainland in education and healthcare. 
  i. Allow Hong Kong service providers to set up wholly-owned international schools whose enrollment range can be extended to children of overseas Chinese with long-term residency in foreign countries and talents working in Qianhai who have studied abroad.
  ii. Allow Hong Kong service providers to set up wholly-owned hospitals in Qianhai.
  VII. To enhance cooperation in the telecommunication industry.
  i. Support Hong Kong and Macau telecommunication operators to establish joint ventures with mainland telecommunication operators in Qianhai in accordance with the CEPA.
  ii. Encourage innovation in the operational and management models of the telecommunication industry, support local telecommunication companies to develop preferential tariff schemes according to the situation in Qianhai.
  iii. Support the establishment of a dedicated international communication channel in Qianhai to meet local enterprises’ needs for international telecommunication.
  VIII. Guangdong Provincial People’s Government should strengthen their governance, facilitation and implementation. The inter-ministerial joint conference system of the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone should fully play the coordinating role. Relevant departments of the State Council should provide more guidance and service to facilitate the implementation of relevant policies and measures with the goal of creating a good environment for the development and opening up of the Shenzhen-Hong Kong Modern Service Industry Cooperation Zone.
  State Council
  June 27th, 2012