Jakarta, INTI - The Shanghai municipal government has announced the rollout of 20 new policy measures aimed at encouraging domestic reinvestment by foreign-funded companies, as part of broader efforts to strengthen the city’s appeal as a global investment hub.
Policy Focus: Boosting Investment and Easing Business Operations
The policies are designed to improve Shanghai’s business environment while attracting additional foreign capital into the local economy.
The measures were jointly issued by the Shanghai Municipal Development and Reform Commission, the Shanghai Municipal Commission of Commerce, and nine other government departments.
Key policy priorities include facilitating project implementation, easing investment operations, introducing tax incentives, and strengthening investment promotion services.
The initiatives also provide support for various reinvestment models, optimize land allocation, encourage technological upgrades, and streamline administrative procedures for the domestic relocation of medical equipment manufacturing.
Tax Incentives and Long-Term Commitment
One of the key highlights is the tax framework supporting reinvestment, including the continuation of tax credit schemes and the temporary deferral of withholding tax (WHT) on reinvested profits.
Shanghai’s tax authorities will proactively identify potential reinvestment projects, offer tailored services, and assist foreign enterprises in expanding their operations while maximizing the benefits of the newly introduced policies.
As a key gateway to China’s economic openness, Shanghai continues to reflect the country’s sustained efforts to maintain its appeal to foreign investors.
Data from China’s Ministry of Commerce show that during the first 11 months of 2025, a total of 61,207 new foreign-invested enterprises were established in China, representing a year-on-year increase of 16.9 percent.
By sector, foreign capital inflows into high-tech industries reached 221.26 billion yuan (approximately Rp531 trillion).
The e-commerce services sector recorded a year-on-year growth of 127 percent, followed by medical device manufacturing at 46.5 percent and aerospace equipment at 41.9 percent.
Conclusion
The introduction of these new policies highlights Shanghai’s strong commitment to sustaining foreign investor confidence and strengthening its position as a global investment hub. By offering regulatory support, tax incentives, and streamlined administrative processes, the city aims to encourage long-term reinvestment while fostering growth in high-value sectors such as technology, manufacturing, and e-commerce. These measures are expected to enhance business efficiency, support industrial upgrading, and reinforce Shanghai’s role as a key gateway for international capital in China.
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