Shanghai has unveiled a new set of policy measures to promote Reinvestment in China, encouraging foreign-invested enterprises to expand their local presence while reinforcing the city’s role as a key gateway for international capital and long-term business growth.
The 20 newly introduced measures were jointly released by the Shanghai Municipal Development and Reform Commission, the Shanghai Municipal Commission of Commerce, and nine other government departments. Together, they target long-standing operational bottlenecks faced by foreign investors, ranging from project approvals to taxation and administrative efficiency.
Lower Barriers for Reinvestment Projects
The new framework places strong emphasis on improving project implementation and investment convenience. Authorities will support a wider range of reinvestment models, optimize land supply mechanisms, and encourage technology upgrades across manufacturing and high-value service sectors.
Special measures are also being introduced to simplify administrative procedures for the domestic transfer of medical device production—an area that has traditionally faced lengthy approval processes.
Tax Incentives Remain a Core Attraction
Tax policy continues to be one of the most attractive elements of Shanghai’s reinvestment strategy. Existing incentives—including tax credits and the temporary suspension of withholding tax on profits reinvested in China—will remain in force, offering foreign enterprises greater flexibility in capital allocation.
Local tax authorities will take a more proactive role by identifying potential reinvestment opportunities and offering tailored guidance to help companies fully utilize available incentives.
Stronger Signals for Long-Term Foreign Investment
As one of China’s most important gateways for opening-up, Shanghai’s latest policy move reflects broader national efforts to stabilize and expand foreign investment amid global economic uncertainty.
According to data from the Ministry of Commerce of China, China saw 61,207 newly established foreign-invested enterprises in the first 11 months of 2025, marking a 16.9% year-on-year increase.
Foreign capital inflows into high-tech industries reached 221.26 billion yuan (approximately USD 31.5 billion) during the same period. Notably, sectors such as e-commerce services, medical devices, and aerospace equipment manufacturing recorded year-on-year growth of 127%, 46.5%, and 41.9%, respectively.
Outlook
By combining streamlined procedures, targeted tax incentives, and proactive government support, Shanghai is sending a clear message: foreign enterprises are encouraged not only to enter China, but to deepen their long-term commitment. For companies already operating in the market, reinvestment is becoming easier, faster, and more strategically supported than ever before.
