Shenzhen offers cash rewards for foreign reinvestment and regional HQs

Overview

On Wednesday, March 12, 2025, Shenzhen released a notice on implementing incentives for foreign-invested enterprises that expand local investment or set up headquarters in the city. According to a Global Times report reposted by the China International Import Expo Bureau, the main measures are:

• Foreign-invested enterprises whose newly added actual foreign capital reached US$50 million or more in 2023 and 2024 can receive rewards of up to 3%, 2% or 1% of the incremental investment, depending on their industry classification. The financial and real estate sectors are excluded.
• Rewards are capped at 50 million yuan (about US$6.89 million) per company.
• Companies that set up regional headquarters in Guangdong and Shenzhen with actual foreign capital of US$10 million or more in 2023 and 2024 receive a reward of 5 million yuan.

Background

In February 2025 China issued an action plan to stabilize foreign investment, including easing restrictions on domestic borrowing by foreign-invested firms. The government work report delivered at the National People's Congress in March also pledged national treatment for foreign-invested enterprises in access to production factors, licensing, standard-setting and government procurement.

Earlier, on March 3, Shenzhen had released three work plans on the business environment, which promised wider access for foreign investors in telecommunications, the internet, education, healthcare, big data and AI, and set a target of more than 50 billion yuan in actual use of foreign investment in 2025. In 2024, 9,738 new foreign-invested enterprises were established in Shenzhen, up 21.7% year on year and the most of any Chinese city. In the same week, Guangzhou's Nansha District announced 18 measures to improve its foreign investment environment, reflecting continued efforts across the region.

Key Points

According to China Daily on March 19, the policy is based on a document jointly issued by the Shenzhen Municipal Commerce Bureau and the Shenzhen Investment Promotion Bureau, and it also covers support for local companies going abroad.

Target	Support
Additional foreign investment	1–3% of the increase, up to 50 million yuan per company
Regional headquarters	One-time reward of 5 million yuan
Overseas construction projects	Rewards linked to project earnings, up to 2 million yuan
Overseas investment and partnerships	50% of legal, financial and insurance costs, up to 20 million yuan

Ye Wenge, deputy director of the Shenzhen Municipal Commerce Bureau, was reported as outlining four strategic goals: making Shenzhen the first choice for global investors, building a hub for international capital, creating an open innovation environment that attracts research institutions and talent, and increasing the city's appeal to international professionals.

What It Means for Japan–Shenzhen Exchange

Many Japanese companies operate manufacturing, sales and procurement bases in Shenzhen and South China. The measures are designed to encourage additional investment by existing foreign-invested firms and the establishment of regional management functions, and they are likely to be one factor Japanese companies consider when reviewing their footprint.

The package also supports outbound investment and overseas projects by Shenzhen companies, which may help those considering entry into the Japanese market. As a combination that encourages investment in both directions, the policy is drawing attention. Companies will need to check eligibility requirements and application procedures in the official documents.

In recent years, cities across China have been competing to attract foreign investment with new support measures, and Shenzhen's package is part of that trend. For Japanese companies, it is likely to be important to compare not only financial incentives but also market size, supply chains, talent and the quality of administrative services. Shenzhen's complete industrial chains in electronics and new energy vehicles, and its proximity to Hong Kong as a gateway to international markets, are also factors that foreign investors weigh. Whether the policies are applied in an open, transparent and convenient way will also shape how foreign companies assess the investment environment.

Outlook

Operational details such as application periods and review procedures were not clear from the reports. How the measures are implemented, together with progress toward Shenzhen's 2025 foreign investment target, will be watched closely.

From the Association

The Association will continue to gather information on Shenzhen's foreign investment policies and share it with our members. We will keep providing a platform where Japanese and Shenzhen companies can deepen their understanding of each other's markets.