Shanghai Municipal People's Government released on January 10, 2024 the Several Measures on Promoting the High-quality Development of the Equity Investment Sector in Shanghai, which will take effect on February 1, 2024 and remain effective until January 31, 2029.
The document rolls out 32 measures in nine aspects. The document calls for implementing favorable fiscal and tax policies. They include putting in place favorable tax policy in venture capital investment sector, aligning with and implementing preferential tax policy for the accounting of a single investment fund of a partnership venture capital enterprise, and implementing preferential corporate income tax policy for corporate venture capital enterprises in Pudong New Area. For an income derived from transfer of equity held for over three years, the corporate income tax for the year would be halved as per the proportion of shares held by individual investors at the end of the year if the income represents more than 50 percent of the total income derived from equity transfer in the year. The tax would be waived for transfer of equity held for more than five years.