This English translation is for reference only. The Chinese version shall prevail in case of any inconsistencies.
Notice on Issuing theMeasures for Supporting International Science and Technology Cooperation in the Guangdong-Macao In-Depth Cooperation Zone in Hengqin
All relevant departments,
The Measures for Supporting International Science and Technology Cooperation 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 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. 10/2024 of the Economic Development Bureau of the Executive Committee
Measures for Supporting International Science and Technology Cooperation in the Guangdong-Macao In-Depth Cooperation Zone in Hengqin
Article 1.
Purpose of the Measures
These Measures are hereby formulated in order to deepen international science and technology cooperation and exchanges, accelerate the introduction of high-end talents and advanced technologies, and effectively implement the Measures for Promoting Scientific and Technological Innovation in the Guangdong-Macao In-Depth Cooperation Zone in Hengqin.
Article 2.
Definition
For the purposes of these Measures, the following terms are defined as follows:
1. “Substantive operations” is determined based on the relevant provisions of 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);
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 the 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 must also engage in the same or similar business activities as the said enterprise in the Cooperation Zone;
4. “Controlling stake” refers to holding more than 50% of the capital of a limited liability company or more than 50% of the shares in a joint-stock company;
5. “Full-time R&D personnel” refer to individuals who are directly engaged in research and development (R&D) and related technological innovation activities at the applicant entity, as well as those who are specifically responsible for managing such activities or providing direct services.
6. The term “more than” or “no less” shall be interpreted as inclusive of the stated value.
Article 3.
Applicable Entities
These Measures apply to companies or institutions 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 also possess independent legal person status, equipped with standard financial management systems, and be engaged in substantive operations within the Cooperation Zone.
Article 4.
Rewards for Foreign-funded R&D Centers
Foreign-funded R&D centers and foreign-funded global R&D centers recognized by the Economic Development Bureau of the Cooperation Zone may be granted a one-time reward of RMB 3 million and RMB 10 million, respectively. For those centers recognized at different levels, the reward shall be granted based on the difference between the corresponding reward amounts.
Recognized foreign-funded open innovation platforms may be granted one-time reward of RMB 3 million.
Enterprises that meet any of the one of following conditions shall be entitled to 120% of the aforementioned reward standard in this Article:
1. Enterprises are Macao-funded enterprises;
2. Affiliated companies in Macao that have obtained certification as key science and technology enterprises from the Macao SAR Government.
Article 5.
Recognition of Foreign-funded R&D Centers
To apply for recognition as a foreign-funded R&D center, an applicant shall concurrently meet the following conditions:
1. The applicant shall be an enterprise that is established in the Cooperation Zone by foreign investors, either independently or in collaboration with other investors, and shall be engaged in substantive operations;
2. The applicant shall have a clearly defined R&D focus, specific R&D projects, a fixed location, requisite research instruments and equipment, and other essential conditions necessary for conducting research activities;
3. The applicant’s R&D expenditure in the preceding year shall be not less than USD 2 million (or the equivalent amount in other foreign currencies);
4. The applicant shall employ no less than 20 full-time R&D personnel.
To apply for recognition as a foreign-funded global R&D center, all of the following conditions shall be met:
1. The applicant shall be an enterprise that is established in the Cooperation Zone by the foreign parent company, either independently or in collaboration with other investors, and shall be engaged in substantive operations;
2. The foreign parent company shall be the controlling shareholder of the applicant enterprise, or the foreign parent company’s paid-in capital shall be no less than USD 2 million (or the equivalent amount in other foreign currencies);
3. The applicant shall have a clearly defined R&D focus, specific R&D projects, a fixed location, requisite research instruments and equipment, and other essential conditions necessary for conducting research activities;
4. The applicant’s R&D expenditure in the preceding year shall be no less than USD 10 million (or the equivalent amount in other foreign currencies);
5. The applicant shall be authorized by the foreign parent company to undertake global R&D projects, and the R&D expenditure in the preceding year shall account for no less than 5% of the foreign parent company’s total global R&D expenditure.
6. The applicant shall employ no less than 50 full-time R&D personnel.
To apply for recognition as a foreign-funded open innovation platform, all of the following conditions shall be met:
1. The applicant shall be an enterprise or institution that is established in the Cooperation Zone by foreign investors, either independently or in collaboration with other investors, and shall be engaged in substantive operations. The applicant shall, by providing facilities, equipment, R&D sites and professional guidance, as well as by leveraging its technologies, talents, capital, data, and other resources, facilitate project cooperation with small and medium-sized enterprises and innovative teams, and achieve joint innovation.
2. The applicant’s R&D expenditure in the preceding year shall be no less than USD 2 million (or the equivalent amount in other foreign currencies);
3. The applicant’s area of the R&D site shall be at least 800 square meters, and there shall be no less than four R&D innovation projects signed and settled in;
4. The applicant shall have necessary facilities and equipment to support collaborative innovation, have access to international expertise, and have international resources such as technologies and talents from abroad;
5. The applicant shall employ no less than 20 full-time R&D personnel.
Article 6.
Explanation on the Recognition of Foreign-funded R&D Centers
The scope of collection and calculation ratio for the R&D expenses of the applicant entity shall be in accordance with the relevant provisions of the Notice by the Ministry of Finance, the State Taxation Administration and the Ministry of Science and Technology on Improving Policies for the Weighted Pre-tax Deduction of Research and Development Expenses (No. 119 [2015] of the Ministry of Finance and the State Taxation Administration), the Notice of the Ministry of Finance, the State Taxation Administration and the Ministry of Science and Technology on Issues Concerning the Relevant Policies for Weighted Pre-tax Deduction of the Entrusted Overseas Research and Development Expenses of Enterprises (No. 64 [2018] of the Ministry of Finance and the State Taxation Administration), and other documents. The total amount of R&D expenses of an applicant entity shall be determined based on the smaller amount between the total R&D expenses eligible for additional tax deduction as declared by the applicant entity to the tax authorities and the data listed in the special audit report on R&D expenses.
Full-time R&D personnel shall have signed full-time labor contracts with the applicant entity for a term of more than one year, and shall pay individual income tax or social insurance in the Cooperation Zone. The number of such personnel shall be based on the actual figures as of December of the preceding year.
Article 7.
Rewards for Overseas R&D Institutions of Enterprises
Enterprises in the Cooperation Zone with institutions recognized by the Economic Development Bureau of the Cooperation Zone as overseas R&D institutions may be granted a one-time reward of RMB 1 million. For R&D institutions established in Macao or Portuguese-speaking countries, the reward may be increased to RMB 1.2 million. Each enterprise may receive rewards for no more than three overseas R&D institutions.
Article 8.
Recognition of Overseas R&D Institutions of Enterprises
To apply for recognition as an overseas R&D institution, an applicant shall concurrently meet the following conditions:
1. The applicant entity shall be engaged in substantive operations within the Cooperation Zone and shall belong to one of the following categories:
(1) Technology enterprises included in the Cooperation Zone’s statistical database of enterprises above a designated size;
(2) National high-tech enterprises;
(3) Unicorn companies, future unicorn companies, or seeded unicorn companies recognized by the Cooperation Zone;
(4) Enterprises awarded in the Hengqin International Innovation and Entrepreneurship Competition.
2. The overseas R&D institution shall be legally registered, possess independent legal entity status, and be filed with the Department of Commerce;
3. The applicant entity shall be the controlling shareholder of the overseas R&D institution and shall have attained tangible R&D achievements through such institution;
4. The overseas R&D institution shall have been in actual operation for at least two years, possess fixed R&D premises of at least 100 square meters, and employ at least 5 full-time R&D personnel. Such personnel shall have signed full-time labor contracts for a term of at least one year with the applicant entity, and shall pay individual income tax or social insurance in the Cooperation Zone. The number of such personnel shall be based on the actual figures as of December of the preceding year;
5. Since the enterprise in the Cooperation Zone became the controlling shareholder of the overseas R&D institution, the total R&D expenditure of the overseas R&D institution shall have been no less than RMB 5 million.
The R&D expenditure of the overseas R&D institution shall be determined based on the total amount of R&D expenses, as consolidated in accordance with accounting standards and listed in the audit report issued by a third-party institution. This amount shall be adjusted in proportion to the shareholding percentage held by the enterprise in the Cooperation Zone.
Article 9.
Subsidies for the Operation of International Platforms for Science and Technology Exchanges and Cooperation
Enterprises or institutions in the Cooperation Zone are encouraged to establish international platforms for science and technology exchanges and cooperation, support science and technology enterprises in “introducing knowledge and expanding globally”, and serve high-level international science and technology exchange activities. Operating entities of such international platforms for science and technology exchanges and cooperation that have obtained a license issued by the Ministry of Science and Technology may be granted an annual subsidy of RMB 1 million for three consecutive years, starting from the year when the license is obtained.
Operating entities of such international platforms for science and technology exchanges and cooperation shall meet the requirements of substantive operation, and shall have organized no less than three international science and technology exchange activities in the preceding year, each activity involving at least 15 participants, in order to be eligible for the second- and third-year operation subsidies.
Article 10.
Applicable Principles
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 11.
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.
If an applicant is subject to criminal penalties or administrative penalties such as fines, confiscation of illegal gains, confiscation of illegal property, restrictions on production and business activities, orders to suspend 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 12.
Power of Interpretation
These Measures shall be interpreted and implemented by the Economic Development Bureau of the Cooperation Zone.
Article 13.
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 continuous subsidies, if subsidies have already been applied for within the validity period of these Measures, the remaining subsidies may continue to be enjoyed according to the standard of these Measures after the expiration of these Measures.