Shanghai was the first city in mainland China which introduced a policy to attract multinational companies to set up regional headquarters in 2002. Since then, the headquarter economy in Shanghai has made great progress. As of July this year, there are 696 multinational headquarters and 450 R&D centers in Shanghai.
The city has always continued to expand its opening up to the outside world. Adapting to the new international trade rules and striving to make Shanghai an international economic, financial, trade, shipping and technological innovation center, the Shanghai Municipal People’s Government released several opinions on how to promote the development of multinational corporation regional headquarters in Shanghai.
The opinions emphasize six aspects: 1) Further promote and encourage the cluster development of multinational corporation regional headquarters. For example, adjust the standard for defining multinational corporation regional headquarters and organizations acting as headquarters, and lift the restriction that they have to be exclusively foreign-owned. 2) Provide more convenience for multinational corporations to make investments by relaxing the conditions for the establishment of investment companies in the field of trade and logistics 3) Do the same thing for such companies in the field of research and development. 4) Give more freedom and convenience to multinational corporations in the use of funds. 5) Support the qualified multinational corporation regional headquarters and organizations acting as regional headquarters to enter Shanghai’s gold market and conduct gold trading. 6) Further improve the supporting facilities for multinational corporation headquarters.
Several companies like Covestro, TLD, Huntsman and NAIDIA had already been recognized as regional headquarters. Holly Lei, the CEO of Covestro China said that China is Covestro’s single largest market, with sales totaling EUR 3.1 billion in 2018, accounting for 21 percent of group sales. They are deeply impressed by the Shanghai Government’s efforts to open up even further to the outside world, and to improve the investment, trade, law, living, and talent development environment.
Six companies are to be determined as regional headquarters, among them the well-established global companies ITOCHU TEXTILE, Rittal, GrandVision and ALDI. Yougang Chen, Chairman of ALDI China said in an interview that ALDI is very happy with the opinions. The company will benefit a lot from the new policies; for example, it will no longer have to apply for a business license for every of its chain stores. As ALDI’s headquarters are to be set up in Shanghai, it just needs to put them on record. That’s saves a lot of labor and time, he added.
The new policies are to be carried out from September 1st, 2019.