Shanghai Unveils Measures to Ease Burdens of SMEs in Tax, Employment and Financing

On March 29, 2024, Shanghai Municipal People’s Government released the Several Policy Measures of Shanghai on Reducing Corporate Burdens to Boost the Development of Small and Medium-sized Enterprises (SMEs) (the “Policy Measures”).

Highlighting 20 measures in five aspects, the Policy Measures clarify that, starting from April 2024, the charging standards on the inspection and testing of special equipment and the registration of home-made drugs will be reduced by 50 percent, respectively, and the charging standard on the registration of home-made Category II medical devices will be reduced by 65 percent. Starting from March 2024, the rate of enterprise contributions to employee’s basic medical insurance would be cut by 1 percentage point for a limited period, and power generators would be encouraged to reduce monthly bilaterally negotiated power prices. Starting from March 2024, the pipeline transportation fee would be reduced by RMB 0.03 yuan per cubic meter, the LNG transportation fee at the Yangshan Port would be cut by RMB 0.02 yuan per cubic meter for a limited period, and Shanghai gas companies would cancel the original 5 percent of price increase for some users. Besides, the over-quota progressive mark-up water charges on non-resident users would be waived in 2024, more inclusive loans will be issued to micro and small businesses, and efforts will be made to have the balance of loans exceeding RMB 1.3 trillion yuan at the end of the year. The guaranteed policy financing fund for micro, small and medium-sized enterprises will be increased from RMB 10 billion yuan to RMB 20 billion yuan in stages, with guaranteed loans of up to RMB 4 million yuan to entrepreneurial organizations.