Preferential tax policies coming for biopharmas setting up shop in Shanghai's newest free trade zone
In an attempt to lure more high-tech manufacturers to China, the country’s Ministry of Commerce has said it would implement a special tax policy for — among other industries — biopharma companies in a newly expanded free trade zone in the Southeast part of the booming biotech hub of Shanghai.
The ministry reiterated that it will push to attract more such companies late Friday, Reuters reported, days after it unveiled the preferential tax plans.
The comment also came amid significant escalation in the US-China trade war, which has seemed to prompt an unexpected growth in exports to other parts of the world.
A designated area to pilot competitive market policies infeasible in the rest of China, Shanghai’s Lingang Xinpian zone is positioned to “focus on important sectors that are needed for national strategy, have big demand for the international market, and high bar for openness.” Biopharma is listed as a core industry here alongside semiconductor, artificial intelligence and commercial aviation.
Within five years, companies in these fields can expect to pay as little as 15% of their corporate income tax, announced deputy minister Shouwen Wang. The ministry will also explore reducing personal income tax as an incentive to attract foreign talent.
Other policies to be explored include setting up infrastructure for “free trade accounts” and waiving tariffs on goods arriving at the Xinpian zone.
In addition to policies, the Shanghai government also plans to set up a development fund to support talent recruitment and infrastructure construction in the area, ready to dish out no less than RMB 100 billion (around $14.17 billion at the current exchange rate) in five years.