QINGDAO, CHINA / ACCESSWIRE / May 13, 2019 / In order to further optimize the venture capital (VC) development environment of the city, promote domestic and overseas VC institutions to accelerate agglomeration and development in the city, develop the city into a VC center city, push forward the construction of the technology-guided fields, boost the high-quality development of economy, the following supporting policy measures are hereby formulated.
I. Accelerating the agglomeration and development of VC institutions
(I) VIGOROUSLY CULTIVATE VC MARKET SUBJECTS. Encourage industrial backbone enterprises, business incubators, industrial (technical) innovation centers, university funds, and other relevant subjects to initiate and participate in the establishment of VC institutions. Promote financial institutions and professional and standard wealth management institutions to closely interact and cooperate with VC institutions for development. Encourage financial institutions like securities companies, insurance companies, trust companies, and financial companies, etc. to invest in or establish VC institutions. Cultivate and establish fund of funds actively.
(II) ACTIVELY INTRODUCEVC INSTITUTIONS. Develop investment promotion by facing domestic and overseas high-quality VC institutions, give play to the role of the platforms such as intermediary agencies and industrial associations, etc. through market-oriented investment promotion, establish the investment promotion tracking and connection mechanism, and introduce a batch of brand institutions which have a large investment scale, standard management and strong influences.
(III) STRENGTHEN THE SUPPORT FOR VC INSTITUTIONS. Give a reward as per 1% of paid-in capital and of no more than CNY 20 million at the most to the VC institutions which will be registered in the city, open a fund escrow account in the city, subscribe the capital of more than CNY 200 million (included), complete the filing with the fund industry association, and have a paid-in capital of more than CNY 200 million (included). Give a reward for the newly increased part of paid-in capital according to the above-mentioned policy to the VC institutions which had been registered and established in the city before the issue of this Policy and had newly increased the paid-in capital by more than CNY 200 million (included). Provide a one-off reward of CNY 50 million (including the award amount already obtained according to the policies in the previous clauses) to the super-large-scale VC institutions with paid-in capital of more than CNY 10 billion (included). Give special reward after the research of the municipal government to the VC institutions which settle in the city and have great significance and functions. For the VC institutions which settle in the city and have actual operating institution and permanent office personnel in the city, the government of the district (county) where they are settled shall provide office support policies.
II. Promoting the connection of VC institutions with the real economy
(IV) IMPROVE THE NORMAL MECHANISM OF ROAD SHOW FOR CONNECTION OF VC AND PROJECTS. Build frequent road show connection platforms of many forms, and promote the information communication and cooperation of VC institutions with startups and scientific research institutes. Require each district (county) and each department to open enterprise resources and project resources, and promote the sharing of VC and enterprise information. Support VC institutions to make many investments at a possibly early time and actively invest in the transformation of technological achievements formed from each special technological project and scientific research fund. Encourage the introduction of scientific research projects outside Qingdao to incubate and settle in the city.
(V) GIVE PLAY TO THE ROLE OF KEY PLATFORMS IN THE CITY. Support Blue Ocean Equity Exchange, municipal-level VC guide fund management centers, Qingdao capital market service base, and productivity promotion center, etc. to develop colorful road show connection activities, encourage the enterprises in the city to participate in road show, attract projects outside Qingdao to carry out road show in the city, establish the mechanism for the tracking and connection of the scientific research achievements of international and domestic universities and colleges, and scientific research institutes, and realize the coordination and interaction of "VC + startups". Encourage each district (county), high-tech zone, and blue valley, etc. to establish project road show platforms with their own characteristics and advantages.
(VI) STRENGTHEN THE SUPPORT FOR THE VC INSTITUTIONS MAKING INVESTMENTS IN THE ENTERPRISES OF THE CITY. Give a reward without upper limit as per 1% of the amount of investment actually made to the VC institutions which are registered in the city, make investments in the enterprises in the jurisdiction of the city, and form real industries.
III. Giving play to the role of the government guide funds actively
(VII) MAKE CLEAR THE INVESTMENT PROPORTION OFQINGDAO. The proportion of capital invested by a fund with the equity participation of the city's government guide funds in the enterprises of the city is1.1 times of the investment amount of the guide funds.
(VIII) LOOSEN THE STANDARD FOR IDENTIFICATION OF THE INVESTMENTS IN THE ENTERPRISES OF THE CITY.
- Making direct investment in the enterprises of the city;
- A non-local invested enterprise makes investments in the existing enterprises of the city by means of equity investment;
- A non-local invested enterprise makes investments to establish new enterprises in the city;
- Introducing corporate enterprises to settle in the city and having carried out substantial operating activities;
- Supporting the enterprises in the city invested by VC institutions to operate controlling subsidiaries outside the city, in order to support the enterprises in the city to go out and develop full industry chain investments;
- Other circumstances which may be identified as investment in the enterprises of the city.
(IX) ALLOW SPECIAL SUBFUNDS TO BREAK THROUGH INVESTMENT PROPORTION LIMITATION. Allow the FOFs with the equity participation of the city's government guide funds to establish special sub funds directly surrounding key projects, without the restriction of that "the investment of a sub fund in a single enterprise shall not exceed 20% of the total fund scale in principle".
(X) ENCOURAGE SOCIAL INVESTORS TO PURCHASE THE FUND SHARES HELD BY THE GUIDE FUNDS. The funds with the equity participation of the government guide funds, if purchased within 3 years (included) after the date of registration, may be transferred at the original investment amount of the guide funds; and if over 3 years after the establishment, the guide funds and social investors will have equal shareholder-right, and carry out liquidation and exit upon the expiration of the survival period. This policy shall meet the requirement that, at the time of fund share transfer, the capital invested by the equity-participated funds in the enterprises of the city is not lower than 1.1 times of the investment amount of the guide funds.
(XI) ESTABLISH TECHNOLOGY INNOVATION FOF. The government dominates and initiates the establishment of Qingdao Technology Innovation FOF, focuses on hard and core technology, takes science and technology innovation board as benchmark, and mainly supports the cultivation of original innovation, achievement transformation, and high-end technology industrialization projects.
(XII) IMPROVE THE MECHANISM FOR INTEREST CONCESSIONS OF GOVERNMENT GUIDE FUNDS. For the VC institutions with the equity participation of the city's government guide funds, if the overall annual rate of return exceeds the benchmark one-year bank loan interest rate for the liquidation year (simple interest) during the liquidation and exit, the guide funds will surrender part of the interests as per 50% of the corresponding amount of excessive return originated from the VC institutions' investment in the enterprises of the city; for the investments in the projects which meet the industrial development strategy of the city and play an important role in supporting industries, or in technology innovation enterprises at startup and mid-early stages, and after affirmation, the range of interest concession may be enlarged, until all interests are surrendered to the VC fund managers and other social capital investors.
IV. Encouraging state-owned enterprises to participate in VC
(XIII) PROMOTE STATE-OWNED ENTERPRISES TO PARTICIPATE IN VC DEVELOPMENT. Promote state-owned enterprises to participate in VC development, and encourage state-owned enterprises having demands and meeting relevant conditions to invest in VC institutions or initiate the establishment of VC institutions actively according to laws and rules. Encourage government guide fund management institutions and state-owned VC institutions to implement more effective incentive and restriction mechanism for management personnel internally, establish and improve the mechanism for shareholding and co-investment of state-owned VC institutions and core VC teams, loosen the single employee's shareholding proportion of new VC institutions, and allow the management level and core backbones to hold shares accounting for 30% of the total capital stock.
V. Widening the channels for fund raising and exit of VC
(XIV) PROMOTE THE FUND-RAISING DIVERSIFICATION OF VC INSTITUTIONS. Support VC institutions to raise funds through the channels such as bond, trust, and insurance fund etc. Encourage VC institutions to cooperate with the financial institutions such as banks, securities companies, insurance companies, etc., and explore for the new modes such as investment-loan linkage, investment-bond linkage, and investment-insurance linkage, etc.
(XV) WIDEN THE CHANNELS AND METHODS FOR THE EXIT OF VC INSTITUTIONS. Encourage the establishment of private equity secondary market funds. Support various subjects to establish merger funds. Give play to the role of Blue Ocean Equity Exchange and Qingdao Wealth Product Transaction Center as platforms, construct the platform for the transfer transaction of VC projects in a lawful and compliant way, establish and improve the offer and service system of private placement products.
VI. Exploring for the construction of VC incubators
(XVI) BUILD UP VC INCUBATION PLATFORM. Give play to the guiding role of the government, introduce market-oriented institutions, establish VC incubators, and build VC incubation platforms by market-oriented means.
(XVII) CULTIVATE PARTNERS OF VC INSTITUTIONS. Guide and drive the enterprises of the city to learn and participate in VC, cultivate local qualified VC investors, strengthen the teams of general partners and limited partners, and promote VC to empower the real industries.
(XVIII) PROVIDE FULL-CHAIN SERVICES OF FUND RAISING, INVESTMENT, MANAGEMENT AND EXIT FOR VC INSTITUTIONS. Establish high-quality enterprise project bank through offline capital field training camp and online technology finance service system. Provide professional post-investment management services for VC institutions' investment projects, help to realize multi-round financing and increase financing efficiency. Provide the services such as capital market resources, merger funds, and investor connection, etc. for VC projects, and promote the high-efficiency and orderly exit of investments.
VII. Attracting and cultivating VC professionals
(XIX) STRENGTHEN THE CULTIVATION OF VC PROFESSIONALS. Support the strengthening of VC professionals training through VC industry organizations, colleges and universities, scientific research institutions, group organizations, VC institutions, etc., develop education and training by many means, and attract more excellent talents, especially scientific research talents, to engage in VC. Develop dual-way communication at temporary posts of the cadres of the party and government organs and the talents of VC institutions meeting relevant conditions.
(XX) STRENGTHEN THE SUPPORT FOR REWARDING THE SENIOR MANAGEMENT TALENTS OF VC INSTITUTIONS. Give reward to the affirmed senior management talents of VC institutions according to their contributions; provide services in terms of life, entrepreneurship and technological project connection, etc. to the talents who enjoy the green card treatment in terms of the services for high-level talents according to regulations; and support the senior management talents of VC institutions meeting relevant conditions to participate in the selection of financial high-end talents and financial stars of Shandong Province and Qingdao City.
VIII. Promoting the dual-way opening of VC industry
(XXI) PROMOTE DUAL-WAY OPENING OF VC IN GOOD ORDER. Improve the measures for the pilot qualified foreign limited partners (QFLP) and qualified domestic limited partners (QDLP), smooth the channels for capital flowing, optimize the examination process, strive for the pilot amount actively, and promote cross-border VC institutions to settle in the city. Encourage domestic and overseas VC institutions to strengthen cooperation. Persist in laying equal emphasis on "introducing in" and "going abroad", develop precise investment promotion by facing developed countries and regions of VC, and encourage domestic and overseas VC institutions to strengthen innovation cooperation.
IX. Forming resultant force for the city and district to develop VC
(XXII) UNIFORMLY PLAN THE FINANCIAL SUPPORT FUNDS OF THE CITY AND DISTRICTLEVELS. According to the existing financial system, the city-level shared part of the taxes generated by the VC institutions registered in the city shall be totally rewarded to the district where the VC institutions are located, and shall be uniformly used by the district to support the development of VC institutions and reward high-end talents.
(XXIII) ENCOURAGE THE DISTRICT (COUNTY) TO CREATE VC INSTITUTIONS AGGLOMERATIONAREA. Construct the global (Qingdao) VC center, and create a global VC gathering place and project road show center. Give play to the role of city-level VC public service platform, integrate relevant resources, and promote the VC development. Encourage the district (county) meeting relevant conditions to create VC institutions agglomeration area.
X. Creating a high-quality market-oriented and legalized environment
(XXIV) IMPROVE THE MARKET-ORIENTED SERVICE SYSTEM. Establish the VC industry development alliance, and give play to the active role of industrial association. Support the development of intermediary service agencies related to VC, and provide professionalized and diversified services for VC institutions. Establish and improve the mechanism of expert consulting for the development of VC industry in Qingdao. Hold Global (Qingdao) VC Conference every year, and create an industrial brand activity with global
influences.
(XXV) OPTIMIZE THE LEGALIZED SERVICE SYSTEM. Loosen the market admittance for VC institutions, and implement the municipal uniform market admittance policies for VC institutions. Require the enterprise registration department and VC industry filing department to establish information sharing mechanism and provide convenience for the settlement and development of VC institutions. Implement the tax preference policies according to regulations for the venture capital enterprises and angel investment individuals meeting conditions. Give play to the roles of the intermediary agencies like law firm, etc., and provide legal services like legal consulting and corporate legal affairs, etc. for VC institutions.
(XXVI) ESTABLISH SUPERVISION COORDINATION MECHANISM. Give full play to the role of the Municipal Financial Work Leadership Group, and research the major issues concerning promoting the development of VC industry, etc... Require relevant departments and units like finance, market supervision, public security, banking and insurance regulation, etc. and each district (county) to establish the coordinative supervision mechanism, strengthen coordination and cooperation, and focus on attacking illegal fund raising and fraudulent behaviors, etc. in the name of VC. Effectively give play to the role of third parties to improve data statistics and risk prevention & control mechanism, and provide technical support for supervision.
The Policy shall be implemented since the date of issue, and be effective for 3 years. The municipal local financial supervision bureau will, together with the municipal finance bureau, make detailed implementation rules on the policy execution standards and procedures, etc., and will be responsible for the interpretation and implementation of the Policy.
CONTACT:
Shang Yun
Tel: 86 (21) 52133356
E-mail: [email protected]
SOURCE: Qingdao Municipal Government