ExclusiveChina to offer tax and housing subsidies to lure foreign talent to Shanghai free-trade zone, sources say

Shanghai government to issue 50 new rules this week for its expanded free-trade zone to attract foreign investment and talent

Among the benefits on offer will be income tax subsidies to offset the difference between higher tax rates in Shanghai than in Hong Kong

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Waigaoqiao area in Shanghai free-trade zone in Pudong, Shanghai. China is attempting to expand its use of free-trade zones to attract foreign investment. Photo: Xinhua

Published: 6:28pm, 27 Aug 2019Updated: 10:40pm, 27 Aug 2019

Foreign workers with special expertise will be offered a variety of incentives – including income and housing subsidies – to come work in the newly-expanded Shanghai free-trade zone, according to sources briefed directly on the new rules.

The Shanghai municipal government will release details of 50 new rules for the zone this week that will be effective on September 1.

Income tax subsidies will be offered to foreign talent with urgently needed skills. For example, the subsidies will offset the difference between the higher income tax rates in Shanghai and the lower rate in Hong Kong, according to the sources, who spoke to the South China Morning Post on condition of anonymity.

Fixed-price housing will be introduced in the zone, with some living space to be converted into flats for workers with highly sought after skills.

In addition, lower corporate income taxes will apply to manufacturing companies doing business in the fenced customs areas within the free-trade zone, as well as to financial transactions and service agreements that occur between companies doing business within the bonded zones, sources said.