Notice on Issuing the Measures for the Cultivation and Introduction of Innovative and Growing Enterprises in the Guangdong-Macao In-Depth Cooperation Zone in Hengqin

This English translation is for reference only. The Chinese version shall prevail in case of any inconsistencies.

Notice on Issuing the Measures for the Cultivation and Introduction of Innovative and Growing Enterprises in the Guangdong-Macao In-Depth Cooperation Zone in Hengqin

All relevant departments:

The Measures for the Cultivation and Introduction of Innovative and Growing Enterprises in the Guangdong-Macao In-Depth Cooperation Zone in Hengqin has been approved by the Executive Committee of the Guangdong-Macao In-Depth Cooperation Zone in Hengqin, and is hereby issued for implementation. Should any issues arise during implementation, please promptly report them to the Economic Development Bureau of the Guangdong-Macao In-Depth Cooperation Zone in Hengqin.

Economic Development Bureau of the Guangdong-Macao In-Depth Cooperation Zone in Hengqin

April 7, 2024

Normative Document No. 7/2024 of the Economic Development Bureau of the Executive Committee

Measures for the Cultivation and Introduction of Innovative and Growing Enterprises in the Guangdong-Macao In-Depth Cooperation Zone in Hengqin

Article 1.

Purpose of the Measures

These Measures are formulated in order to effectively implement the Measures for Promoting Scientific and Technological Innovation in the Guangdong-Macao In-Depth Cooperation Zone in Hengqin, as well as cultivate and introduce innovative and growing enterprises in the Cooperation Zone.

Article 2.

Definition

For the purposes of these Measures, the following definitions apply:

1. “Qualified institutional investors” refer to venture capital funds and private equity investment funds that have completed recordation procedures and operate in compliance with the Interim Measures for the Administration of Startup Investment Enterprises (Order No. 39 of the National Development and Reform Commission and nine other departments) or the Interim Measures for the Supervision and Administration of Privately Offered Investment Funds (Order No. 105 of the China Securities Regulatory Commission);

2. “Macao-funded enterprises” refer to enterprises where the investors are Macao residents or legal entities legally established in Macao that have been operating for at least two years, with a combined shareholding ratio of no less than 25%. The shareholding methods of Macao residents and Macao legal entities include direct shareholding and indirect shareholding, but exclude nominee shareholding;

3. “Affiliated companies in Macao” refer to companies that are legally established in Macao, duly paying taxes (including but not limited to complementary tax and business tax) or lawfully exempt from taxation, and that either: (i) are directly held (excluding nominee shareholdings) by enterprises in the Cooperation Zone with more than 50% of the shares , or (ii) directly hold (excluding nominee shareholdings) more than 50% of the shares in an enterprise in the Cooperation Zone. Such companies shall also engage in the same or similar business activities as the said enterprise in the Cooperation Zone;

4. All monetary amounts in these Measures are denominated in Renminbi (RMB); and

5. The term “more than” shall be interpreted as inclusive of the stated value.

Article 3.

Applicable Entities

These Measures apply to enterprises that are registered, subject to tax administration, and statistical reporting in the Guangdong-Macao In-Depth Cooperation Zone in Hengqin (hereinafter referred to as the “Cooperation Zone”). Eligible enterprises or institutions shall possess independent legal person status, equipped with standard financial management systems, and be engaged in substantive operations within the Cooperation Zone.

The recognition of substantive operations shall follow relevant provisions stipulated in the Rules for Determining the Substantive Operations of Enterprises in the Guangdong-Macao In-Depth Cooperation Zone in Hengqin (Normative Document No. 2/2023 of the Executive Committee).

Article 4.

Rewards for the Determination and Settlement of National High-tech Enterprises

After the implementation of these Measures, newly recognized national high-tech enterprises may be granted a lump-sum reward of RMB 400,000, and national high-tech enterprises that pass their re-recognition may be granted a lump-sum reward of RMB 200,000.

The date of recognition or re-recognition shall be subject to the date specified on the National High-tech Enterprise Certificate.

For national high-tech enterprises newly relocated to the Cooperation Zone, a lump-sum reward of RMB 400,000 shall be granted if, in the year of relocation, the enterprises are included in the Cooperation Zone’s statistical database of enterprises above a designated size and achieve a positive year-on-year growth in main business revenue.

Enterprises applying for rewards shall hold a valid National High-tech Enterprise Certificate and complete the relocation registration procedures for national high-tech enterprises.

Article 5.

Rewards for the Development and Scaling-up of National High-tech Enterprises

For enterprises included in the Cooperation Zone’s statistical database of enterprises above a designated size that are recognized as national high-tech enterprises for the first time, or enterprises that are included in the Cooperation Zone’s statistical database of enterprises above a designated size for the first time within the validity period of the National High-tech Enterprise Certificate, a lump-sum reward of RMB 200,000 may be granted; for enterprises achieving a year-on-year growth of main business revenue of more than 50% in the second year, a lump-sum reward of RMB 200,000 may be granted; for enterprises achieving a year-on-year growth of main business revenue of more than 50% in the third year, a lump-sum reward of RMB 200,000 may be granted.

For national high-tech enterprises already included in the Cooperation Zone’s statistical database of enterprises above a designated size before the implementation of these Measures, rewards may be applied for if their year-on-year growth of main business revenue in the second and third year meets the eligibility criteria of the preceding paragraph.

Enterprises applying for rewards shall hold a valid National High-tech Enterprise Certificate.

Article 6.

Rewards for the Recognition and Settlement of Enterprises that Use Special and Sophisticated Technologies to Produce Novel and Unique Products

Key “little giant” enterprises, “little giant” enterprises, and small and medium-sized enterprises that use special and sophisticated technologies to produce novel and unique products that are recognized, re-recognized, or relocated to the Cooperation Zone after the implementation of these Measures, a lump-sum reward of RMB 4 million, RMB 3 million, and RMB 800,000 may be granted, respectively. The date of recognition shall be subject to the date specified on the certificates. Enterprises applying for rewards shall hold a valid certificate.

Within the validity period of these Measures, the rewards for recognition of the same level shall only be granted once; enterprises having met the eligibility for multiple rewards shall be granted the highest rewards, with the difference being compensated accordingly.

Article 7.

Recognition of Unicorn Enterprises

For enterprises meeting the following basic conditions, the Economic Development Bureau of the Cooperation Zone will organize experts or commission third-party professional institutions to conduct a merit-based recognition process, taking into account factors such as innovation capacity, development potential, business models, and management levels. Enterprises that are not registered in the Cooperation Zone may be eligible for recognition, and may apply for rewards specified in Articles 9, 10, and 11 of these Measures, provided that the said enterprises relocate their business registrations to the Cooperation Zone within two years from the date of recognition.

1. Unicorn Enterprises:

(1) Enterprises established for no more than 10 years;

(2) A post-investment valuation of more than USD 1 billion (or the equivalent in RMB) in the latest round of financing;

(3) Investments from qualified institutional investors totaling no less than USD 100 million (or the equivalent in RMB); and

(4) Enterprises not listed in stock markets inside and outside the Chinese mainland (excluding the National Equities and Exchange Quotations and over-the-counter markets inside and outside the Chinese mainland).

2. Future Unicorn Enterprises:

(1) Enterprises established for no more than 10 years;

(2) A post-investment valuation of more than USD 100 million (or the equivalent in RMB) in the latest round of financing;

(3) Investments from qualified institutional investors totaling no less than RMB 50 million; and

3. Seed-stage Unicorn Enterprises:

(1) Enterprises established for no more than 5 years;

(2) A post-investment valuation of more than USD 10 million (or the equivalent in RMB) in the latest round of financing;

(3) Investments from qualified institutional investors totaling no less than RMB 5 million; and

Article 8.

Rewards for the Recognition of Unicorn Enterprises

Recognized unicorn enterprises may be granted a reward up to RMB 20 million. For recognized enterprises in the Cooperation Zone, or recognized enterprises relocating their business registrations to the Cooperation Zone, may be granted a lump-sum reward of RMB 6 million; recognized enterprises and their wholly-owned subsidiaries in the Cooperation Zone that achieve an annual main business revenue (excluding affiliated revenue) of RMB 300 million may be granted an additional lump-sum reward of RMB 14 million.

For future unicorn enterprises and seed-stage unicorn enterprises recognized or relocating their business registrations to the Cooperation Zone, a lump-sum reward of RMB 5 million and RMB 3 million may be granted, respectively.

Article 9.

Rewards for the Upgrade of Unicorn Enterprises

Recognized seed-stage unicorn enterprises that are upgraded to future unicorn enterprises may be granted a lump-sum reward of RMB 2 million.

Recognized future unicorn enterprises that are upgraded to unicorn enterprises may be granted a reward of up to RMB 15 million. Enterprises that are successfully upgraded may be granted a lump-sum reward of RMB 1 million; if the upgraded enterprises and their wholly-owned subsidiaries in the Cooperation Zone achieve an annual main business revenue (excluding affiliated revenue) of RMB 300 million, an additional lump-sum reward of RMB 15 million may be granted.

Recognized seed-stage unicorn enterprises that are upgraded to unicorn enterprises may be granted a reward of up to RMB 17 million. Enterprises that are successfully upgraded may be granted a lump-sum reward of RMB 3 million; upgraded enterprises and their wholly-owned subsidiaries in the Cooperation Zone that achieve an annual main business revenue (excluding affiliated revenue) of RMB 300 million, may be granted an additional lump-sum reward of RMB 14 million.

Article 10.

Subsidies for R&D Expenses of Unicorn Enterprises

From the year of recognition (or the year of settlement for relocated enterprises), a subsidy equal to 20% and 15% of the total annual R&D expenses, with a maximum of RMB 20 million per year, shall be granted for three consecutive years to unicorn enterprises and future unicorn enterprises, respectively.

The total annual R&D expenses shall be determined based on the smaller amount between the R&D expenses eligible for additional tax deductions as declared by the enterprise to the tax authorities and the R&D expenses eligible for additional tax deductions listed in the special audit report or attestation report.

Enterprises that have already applied for subsidies for R&D expenses under special policies for industries, such as integrated circuits, biomedicine, and healthcare, shall not be eligible to apply for additional subsidies for R&D expenses.

Except for the aforesaid circumstances, enterprises may enjoy subsidies for R&D expenses alongside other inclusive policies, such as funding for the Hengqin International Scientific and Technological Entrepreneurship Competition, research projects on core and key industrial technologies, and science and technology projects, unless otherwise stipulated.

Article 11.

Matching Funding for Affiliated Companies in Macao

For enterprises in the Cooperation Zone whose affiliated companies in Macao have received scientific and technological funding from the Macao SAR Government, matching funding euqal to 50% of the received amount may be provided for the enterprises, with a maximum of RMB 8 million for each single project.

The exchange rate between the Macao Pataca and RMB shall be subject to the central parity rate announced by the China Foreign Exchange Trade System on the date the funding is provided by the Macao SAR Government.

Article 12.

Certification Funding for Affiliated Companies in Macao

Enterprises in the Cooperation Zone whose affiliated companies in Macao have been certified as science and technology enterprises with potential, growing enterprises, and key science and technology enterprises by the Macao SAR Government may be granted a lump-sum funding of RMB 200,000, RMB 400,000, and RMB 800,000, respectively.

Within the validity period of these Measures, the reward funding for recognition of the same level shall be provided only once; enterprises that are eligible for multiple funding shall be provided with the highest funding, with the difference being compensated accordingly.

Article 13.

Special Support

Enterprises meeting either of the following conditions shall be eligible to receive support under Articles 4, 5, 6, 8, 9, and 10 of these Measures at a rate of 120% of the established standards:

1. Macao-funded enterprises; or

2. Affiliated companies in Macao that have obtained certification as key science and technology enterprises from the Macao SAR Government.

Article 14.

Applicable Rules

Except as otherwise provided by laws and regulations, application for and receipt of benefits under these Measures shall not affect an applicant’s eligibility for other policy support and preferential treatment from the national or Guangdong provincial governments, except for those borne or matched by the Cooperation Zone’s finances.

In cases where these Measures overlap or conflict with other policies issued by the Cooperation Zone or with requirements from higher authorities that involve financial obligations or supporting funds from the Cooperation Zone, except as otherwise specified by other regulations, applicants may choose the most favorable option under the principle of “prioritizing the higher standard without duplication”.

Article 15.

Supervision of Funds

Applicants shall ensure the completeness, authenticity, accuracy, and legality of the application materials, and bear liability for the submitted materials. Applicants who provide false materials or fraudulently obtain support funds shall be subject to strict investigation and punishment in accordance with relevant regulations; in cases of serious violations, the applicants shall be held liable in accordance with the law.

Where an applicant is subject to criminal penalties or administrative penalties such as fines, confiscation of illegal proceeds, confiscation of illegal property, restrictions on production or business activities, orders to cease production or business, or orders to close down due to violations of national laws and regulations, the applicant shall be prohibited from applying for relevant subsidies.

Where an applicant relocates out of the Cooperation Zone, cancels its registration, or alters its tax payment or statistical reporting obligations in the Cooperation Zone within five years of receiving the final installment of support funds under these Measures, the applicant shall return all received funds in a lump sum, together with interest calculated at the prevailing Loan Prime Rate (LPR).

Article 16.

Power of Interpretation

These Measures shall be interpreted and implemented by the Economic Development Bureau of the Cooperation Zone.

Article 17.

Effective Date and Validity Period

These Measures shall come into effect on January 1, 2023 and remain valid until December 31, 2025.

For projects involving rewards and subsidies provided by installments, applications submitted within the validity period of these Measures shall remain eligible for the remaining rewards and subsidies in accordance with these Measures after the expiration of these Measures.