June 15, 2009

Dongguan To Promote the Establishment of Enterprises-Headquarters

On June 15, 2009, Dongguan Municipal Government issued the Measures for Promoting the Development of Corporate Headquarters (the "Measures") and the Provisional Rules of the Dongguan Municipality on the Determination of Enterprises as Corporate Headquarters (the "Rules"), both effective the promulgation date. Under the Measures, the authorities of each major industrial or commercial area of Dongguan Municipality (mainly downtown and several industrial parks) shall focus on promoting the establishment of corporate headquarters in different industries.  For instance, for enterprises engaged in the businesses of trading, finance and information that plan to set up corporate headquarters in Dongguan, the Dongguan downtown area will be recommended, although the enterprises have the freedom to choose any area of the city.  The Measures further provide several financial and other incentives for establishing corporate headquarters in Dongguan.  For example,  under certain circumstances, an enterprise may be eligible for a government subsidy of up to RMB 10 million. The Measures and the Rules also provide incentives relating to tax reduction, office building, human resources and regulatory compliance, etc., that will be available to corporate headquarters set up in Dongguan.  The Rules set forth specific standards for how the headquarter status is determined and how the incentives are awarded.  Both regulations are believed to aim at encouraging the local government authorities in Dongguan to promote the establishment of corporate headquarters, as well as attracting both domestic and overseas enterprises to set up new corporate headquarters in, or move existing corporate headquarters to, Dongguan.

Copyright ©2009 by Kaye Scholer LLP. All Rights Reserved. This publication is intended as a general guide only. It does not contain a general legal analysis or constitute an opinion of Kaye Scholer LLP or any member of the firm on the legal issues described. It is recommended that readers not rely on this general guide but that professional advice be sought in connection with individual matters.References herein to "Kaye Scholer LLP & Affiliates," "Kaye Scholer," "Kaye Scholer LLP," "the firm" and terms of similar import refer to Kaye Scholer LLP and its affiliates operating in various jurisdictions.

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