Article I (Objective and Legal Basis)

For the purpose of further opening up Shanghai, enhancing Shanghai's function of global resources allocation, strengthening its advantage as a scientific and technological innovation source, and encouraging foreign investors to set up research and development centers (hereinafter referred to as Foreign-funded R&D Centers) in the municipality, as well as in accordance with laws and regulations, including the Foreign Investment Law of the People's Republic of China, the Regulations for the Implementation of the Foreign Investment Law of the People's Republic of China, the Regulations of Shanghai Municipality on Foreign Investment, the Regulations of Shanghai Municipality on Advancing the Construction of a Science and Technology Innovation Center, etc., the Regulations of Shanghai Municipality on Encouraging the Establishment and Development of Foreign-funded Research and Development Centers (hereinafter referred to as the Regulations) is thereby formulated.

Article II (Definitions)

A Foreign-funded R&D Center is an institution set up by foreign investors to engage in research, development and experimental development (including intermediate experiments serving R&D activities) in natural sciences and related fields of science and technology, of which the content includes basic research, applied research, product development, etc.

A Global R&D Center refers to a global-level R&D center established by foreign investors that possesses exclusively-owned research and development technology platforms, undertakes key steps and the majority of the process of its global-level R&D projects as well as progresses in synch with comparable global activities.

A Foreign-funded Open Innovation Platform is an innovative form of foreign R&D centers. It refers to a research and development center that promotes project-based cooperation with SMEs and innovation teams to realize co-innovation by providing facilities, equipment, research and development sites and professional guidance and by leveraging the platform's technology, talent, capital, data and other resources.

Article III (Scope of Application)

The Regulations shall apply to the establishment and development of Foreign-funded R&D Centers, Global R&D Centers and Foreign-funded Open Innovation Platforms within the jurisdiction of this municipality.

Article IV (Competent Authorities and Responsibilities)

Shanghai has established a Foreign-funded R&D Center coordination mechanism led by the municipal commerce department, with the participation of the municipal departments of science and technology, development and reform, economy and informatization, education, exit-entry administration of the public security department, finance, human resources and social security, planning and natural resources, ecology and environment, housing and urban-rural development, market supervision, taxation, drug supervision, intellectual property rights, as well as the Customs (Shanghai Branch), the Shanghai Headquarters of the People's Bank of China, the State Administration of Foreign Exchange (Shanghai Branch), and the China Banking and Insurance Regulatory Commission (Shanghai Office).

The municipal commerce department shall be responsible for the accreditation and management of Foreign-funded R&D Centers, while other competent authorities shall exercise relevant administrative powers and provide services for Foreign-funded R&D Centers within their respective functions and responsibilities.

The Pudong New Area People's Government, the China (Shanghai) Pilot Free Trade Zone Lin-gang Special Area Administration, the Administration Committee of the Hongqiao Central Business District, and the Zhangjiang Science City Development and Administration Office are entrusted by the municipal commerce department to carry out the accreditation of Foreign-funded R&D Centers within their respective jurisdiction.

Article V (Conditions for Accreditation)

The following conditions shall be met for the accreditation of a Foreign-funded R&D Center:

(i) The applicant shall be a foreign-invested enterprise set up in the municipality under relevant laws and regulations;

(ii) The applicant shall have explicit orientations, specific projects, fixed premises, necessary instruments and equipment as well as other necessary conditions for scientific research for its research and development;

(iii) The applicant's accumulative investment in research and development shall be no less than USD 2 million.

Applicants for the accreditation as a Global R&D Center shall meet the following requirements in addition to the above-mentioned ones:

(i) The applicant is an R&D center that is authorized by the parent company as its highest-leveled R&D center globally and that undertakes global research and development projects;

(ii) The applicant's accumulative research and development investment shall be at least USD 10 million, and its research and development investment shall account for at least 10% of the parent company's global research and development investment the year prior to accreditation.

Applicants for the accreditation as a Foreign-funded Open Innovation Platform shall meet the following requirements:

(i) At least USD 2 million of total investment;

(ii) At least 1,000 square meters of research and development sites;

(iii) At least 10 R&D and innovation projects signed and settled in the platform;

(iv) Necessary facilities and equipment for co-innovation, guidance from international experts, as well as world's cutting-edge technology, talent and other resources.