Shenzhen has introduced a spate of measures to encourage multinational companies (MNCs) to establish regional headquarters and organizations with headquarters functions in the city, according to the latest government gazette issued Monday.

The measures, which highlight a tiered reward system with a maximum reward of 6 million yuan (US$928,000), will become effective March 1.

The measures have made detailed provisions on the definition and identification standards of MNC regional headquarters.

MNC regional headquarters refer to the only head office set up in Shenzhen by a parent company registered offshore by way of investment or authorization, with the headquarters performing the functions of management and services provision for enterprises in more than one country (or region), as per the measures.

MNCs may establish regional headquarters in the form of enterprise with independent legal person status such as wholly owned investment-type or management-type company.

An organization with headquarters functions in an MNC refers to a foreign-invested enterprise (including a branch) that do not fall under the standards of regional headquarters of MNCs and actually undertakes the functions of expanding R&D, sales, trade, settlement and data of an overseas-based parent company in more than one country (or region).

Qualified regional headquarters and organizations with headquarters functions established by MNCs will be recognized by the Shenzhen Municipal Commerce Bureau and issued with certificates.

The recognized headquarters firms of MNCs will be rewarded based on a tiered reward system.

According to the measures, firms registering US$20-30 million, US$30-50 million and above US$50 million in annual actual use of foreign capital will be rewarded 3 million yuan, 5 million yuan and 6 million yuan, respectively.

The firms shall continue to meet the recognition conditions of headquarters enterprises within five years after obtaining the cash reward.

Shenzhen will also launch a package of incentives including preferential policies for R&D, simplified entry-exit procedures, talent introduction, staff training, and more convenient trade and supervision measures.

Shenzhen has long been a magnet for foreign investment. In 2020, the city's actual use of foreign capital exceeded US$8.6 billion, representing about 6 percent of the actual amount of foreign capital utilized in China, official data showed.

It is home to nearly 300 of the Fortune Global 500 companies, according to the local commerce bureau.