Hainan Province's Measures for Promoting the Development of Headquarters Economy (Hainan Province)

Chapter 1 General Provisions

Article 1 These Measures are formulated to serve the development strategy of Hainan Free Trade Port, focus on the cluster development of key industries such as tourism, modern service industry, high-tech industry and tropical characteristic high-efficiency agriculture, promote the gathering of global capital and innovation and other factors, and promote the high-quality development of the headquarters economy in our province.

Article 2 The headquarters enterprise referred to in these Measures refers to the headquarter that exercises substantive management and service functions for enterprises in a certain area, including newly settled headquarters and existing headquarters.

Newly settled headquarters refers to the headquarters enterprise recognized after the release of these Measures. Existing headquarters refers to the headquarters enterprise that has been recognized before the release of these Measures and has continued to exist to this day.

Article 3 The types of headquarters enterprises are divided into regional headquarters of multinational corporations, headquarters of large enterprises, comprehensive headquarters, functional headquarters and high-growth headquarters. In accordance with the principle of "classification recognition and hierarchical management", the Hainan Free Trade Port Investment Promotion and Headquarters Economy Development Joint Conference Office (hereinafter referred to as the "Provincial Joint Office") shall implement the recognition and management of headquarters enterprises, and cities and counties shall set up corresponding institutions and perform management functions at this level.

Chapter II Certification Standards and Certification Procedures

Article 4 The following conditions must be met at the same time when applying for the regional headquarters of a multinational corporation:

(i) A foreign-invested enterprise registered and established in our province by a parent company registered overseas and having independent legal personality;

(ii) The paid-in registered capital is not less than US$2 million;

(iii) The direct shareholding of the overseas parent company is not less than 50%, and the total assets of the parent company are not less than US$200 million;

(iv) The parent company has authorized management of no less than 3 domestic and foreign enterprises in China.

The following conditions must be met at the same time when applying for the headquarters of a large enterprise:

(i) Registered and established in our province and having independent legal personality;

(ii) The total assets of the parent company are not less than RMB 2 billion;

(iii) Holding no less than 3 holding companies nationwide, of which no less than 1 is an enterprise outside the province;

(iv) The operating income in the year before or in the year of application is not less than RMB 1 billion, and the local financial contribution generated is not less than RMB 35 million.

Enterprises registered and established in our province with independent legal person status can be directly identified as large enterprise headquarters if they meet one of the following conditions: 1. Listed on the main board of Shanghai Stock Exchange or Shenzhen Stock Exchange; 2. Second headquarters or regional headquarters of large enterprises (groups) determined by the state and central departments; 3. Headquarters or regional headquarters established in Hainan by the Fortune Global 500, China Top 500, and Private Top 500.

Article 6 Applications for comprehensive headquarters must meet the following conditions at the same time:

(i) Registered and established in our province with independent legal person status;

(ii) Operating income in the year before or in the year of application is not less than RMB 500 million, and the local financial contribution is not less than RMB 20 million;

(iii) Undertake the operational functions of one or more businesses of the headquarters in Hainan, such as commodity procurement, sales and settlement, production research and development and product sales, services and trade in services in China, Asia-Pacific or a larger region.

Article 7 Applications for functional headquarters must meet the following conditions at the same time:

(i) Registered and established in our province with independent legal personality;

(ii) Operating income in the year before or in the year of application is not less than RMB 500 million, and the local financial contribution generated is not less than RMB 10 million;

(iii) Possessing one or more functions such as national or regional procurement, sales, logistics, distribution, settlement, management, R&D, legal consulting, and human resources.

Article 8 Applications for high-growth headquarters must meet the following conditions at the same time:

(i) Registered and established in our province with independent legal personality;

(ii) Local financial contribution generated in the year before or in the year of application is not less than RMB 8 million;

(iii) Possessing core technology intellectual property rights (independent research and development or authorization) in the business field in which it is engaged, and the company's R&D expenses (based on the audit report data) are not less than 5% of the annual operating income; or at least have obtained round C financing from a private equity investment company;

(iv) Possessing a dedicated R&D team, R&D institution or R&D center.

Article 9 Hainan International Investment Single Window sets up a headquarters enterprise service window to provide enterprises with "one-stop" service functions such as consulting services, policy interpretation, and certification management. Enterprises need to apply for various types of headquarters enterprise certification through the Hainan International Investment Single Window application module.

Article 10 Applications for certification of regional headquarters of multinational companies and headquarters of large enterprises shall be preliminarily reviewed by the municipal (county) government of the enterprise's location and reported to the Provincial Joint Office for review. If the review is passed, it will be recognized.

Article 11 Applications for certification of comprehensive headquarters, functional headquarters and high-growth headquarters shall be certified by the municipal (county) government of the enterprise's location and reported to the Provincial Joint Office for filing.

Chapter III Support and Reward Policy

Article 12 Within five years after being recognized as a headquarters enterprise, the municipal (county) government of the enterprise's location shall provide a certain amount of financial rewards each year according to the comprehensive contribution of the enterprise. The municipal (county) government shall review the headquarters enterprise every year, and only those who meet the review standards can enjoy financial rewards.

Article 13 Newly settled headquarters and existing headquarters are encouraged to upgrade their capabilities. If they meet the standards for regional headquarters of multinational corporations or large enterprise headquarters, they may be re-certified and receive preferential rewards according to the type of new headquarters in the remaining years from the year of certification, but they shall not be repeated.

Article 14 After being recognized as a headquarters enterprise, the local municipal (county) government shall support the application of eligible projects to be included in the provincial key projects and provide land use guarantees.

Article 15 Regional headquarters of multinational corporations and headquarters of large enterprises are eligible to apply for 10 passenger car quotas, and comprehensive headquarters, functional headquarters, and high-growth headquarters are eligible to apply for 6 passenger car quotas.

Article 16 Financial institutions are encouraged to use policy tools such as financing guarantees, loan interest subsidies, and risk compensation to provide credit support to headquarters enterprises.

Article 17 Talents and talents introduced by headquarters enterprises that have been recognized and registered by our province (collectively referred to as headquarters enterprise talents) enjoy service guarantees according to existing relevant policies.

Article 18 Municipal (county) governments shall increase policy support for headquarters enterprises, and may adopt a "one-on-one discussion" approach to give priority support to key headquarters enterprises.

Chapter 4 Application Materials

Article 19 Enterprises applying for headquarters enterprise qualification certification shall submit the following materials:

(i) Application signed by the legal representative of the company;

(ii) Hainan Province Headquarters Enterprise Certification Application Form (see the attached table for details);

(iii) Detailed materials submitted in accordance with the "Hainan Province Headquarters Enterprise Certification Application Materials List" (see the attached table for details).

Chapter 5 Supervision and Management

Article 20 The Hainan Free Trade Port Investment Promotion and Headquarters Economy Development Joint Conference is responsible for guiding and supervising the certification management of headquarters enterprises and making decisions on major issues in the certification management. The Provincial Joint Office is located in the Provincial Department of Commerce and is responsible for the daily work of headquarters enterprise certification management. The municipal (county) government is the main body of the implementation of the work of promoting the development of the headquarters economy, and is responsible for consulting services, application acceptance, verification and certification, in-process and post-event supervision, and the construction of the headquarters economy management team for the municipal (county) headquarters enterprises.

Article 21 The municipal (county) government shall review the headquarters enterprises in the first half of each year (consistent with the recognition standards of these Measures) and report the review results to the Provincial Joint Office. Headquarters enterprises that have been recognized before the issuance of these Measures may choose to apply these Measures or the Hainan Province Headquarters Enterprise Recognition Management Measures (Qiong Shang Circular [2018] No. 473) for review. If any of the following circumstances are found, the headquarters enterprise qualification shall be cancelled and the preferential policies shall be terminated:

(i) The enterprise conceals the true situation or provides false materials to obtain qualification recognition;

(ii) For no special reason, the business period is less than ten years, and the registration of closure is handled in advance with the registration authority, or the tax registration is cancelled and moved out of the province, or the actual operation is moved out of the province;

(iii) The review fails for two consecutive years;

(iv) Other violations of national laws and regulations with serious circumstances.

Article 22 If the headquarters enterprise is disqualified, it shall not apply again within five years from the date of disqualification.

Article 23 After the headquarters enterprise is identified, when adding branches in Hainan Province or holding more than 50% of subsidiaries, it must promptly inform the municipal and county commerce departments to ensure that all should be included.

Article 24 For those who use illegal and irregular means to defraud reward funds and enjoy other support policies, after verification, the headquarters enterprise qualification will be cancelled, the preferential policies will be terminated, and the rewards and subsidies will be ordered to be returned. The dishonest behavior will be recorded in accordance with the effective legal documents and pushed to the Hainan Free Trade Port Credit Information Sharing Platform for public disclosure in accordance with the law; if suspected of committing a crime, it will be transferred to the judicial authorities for handling in accordance with the law.

Chapter VI Supplementary Provisions

Article 25 The operating income of the headquarters enterprise does not include the income related to real estate development and operation business. The statistical scope is the headquarters enterprise and branches throughout the province, and subsidiaries with a shareholding of 50% (not included) or more. If both the parent company and the subsidiary apply for the headquarters enterprise, the operating income will not be double-counted.

Article 26 The calculation scope of the local financial contribution of the headquarters enterprise is the total amount of the local retention portion of the actual annual tax paid by the enterprise, minus personal income tax, deed tax, land value-added tax and other taxes related to real estate development and operation business. The statistical scope includes headquarters enterprises and branches and subsidiaries with a shareholding of 50% or more (inclusive) throughout the province. If both the parent company and the subsidiary apply for headquarters enterprises, the local financial contribution will not be double-counted.

Article 27 The operating income of the headquarters enterprise shall be calculated according to the scope of the annual corporate income tax return; the tax revenue of the headquarters enterprise shall be calculated according to the tax payment certificate submitted by the enterprise.

Article 28 The comprehensive contribution referred to in these Measures refers to the comprehensive contribution of the enterprise in terms of economic contribution, scientific and technological innovation, promotion of employment, energy conservation and emission reduction, social integrity and safe production.

Article 29 After the headquarters enterprise is recognized, if the domicile or main business place is changed within the province, it shall enjoy the headquarters enterprise reward and subsidy within the remaining years.

Article 30 Headquarters enterprises may apply for other reward and support policies formulated and issued by our province. If they are of the same type as the policies stipulated in these Measures, they shall enjoy the policies according to the principle of "higher rather than lower".

Article 31 The relevant provincial departments shall update and improve the relevant supporting policies for headquarters economy on the basis of these Measures.

Article 32 Support Haikou, Sanya and Danzhou to build headquarters economy agglomeration areas. On the basis of these measures and in combination with their own realities, each city (county) shall formulate relevant policies to support the development of headquarters economy, and shall report them to the Provincial Joint Office for filing before issuing and implementing them.

Article 33 Enterprises and real estate enterprises that belong to the "Hainan Province Industrial Access Prohibition and Restriction Catalogue" are not subject to these measures.

Article 34 Existing regional headquarters, comprehensive (regional) headquarters, and high-growth headquarters of multinational corporations correspond to the regional headquarters, comprehensive headquarters, and high-growth headquarters of multinational corporations stipulated in these measures.

Article 35 These measures shall come into force on the date of promulgation and shall be valid for 5 years. The Provincial Joint Office shall be responsible for the interpretation. If the provisions before the implementation of these measures are inconsistent with these measures, these measures shall prevail.