Shanghai has updated policies that support foreign-funded R&D centers. The goal is to further open up, strengthen the city's position as a global innovation hub, and attract more international R&D resources.

The new Regulations of Shanghai Municipality on Encouraging the Establishment of Foreign-funded Research and Development Centers replace the 2020 edition and align with the latest strategic direction set by the municipal government.

Below is a clear breakdown of who can apply and how the process works.

I. Which organizations can apply

The regulations define three categories of foreign-funded R&D entities eligible for recognition.

Category 1: Foreign-funded R&D centers

These institutions are established by foreign investors to conduct research and experimental development in natural sciences and related technological fields. Their scope may include:

• Basic research

• Applied research

• High-tech research

• Experimental development, including pilot testing that supports R&D activities

Category 2: Global R&D centers

These operate at the highest level within a multinational's global innovation system. They must:

• Have an independent global R&D technology platform

• Undertake global R&D projects, or the key steps and main processes of division-level global R&D projects

• Ensure that project progress aligns with global timelines

A "division" refers to a business unit created by the foreign-invested enterprise based on specific business areas, product lines, or market segmentation.

Category 3: Foreign-funded open innovation platforms

This model serves as a specific form of foreign-funded R&D center. These platforms provide facilities, R&D space, professional guidance, and access to technology, talent, capital, data, and other resources. They work with SMEs and innovation teams to carry out collaborative R&D projects and accelerate concept validation, creating a shared environment that drives joint innovation.

II. Recognition standards

To be officially recognized, organizations must meet specific requirements.

Requirements for foreign-funded R&D centers

Applicants must:

1. Be a legally established foreign-invested enterprise in Shanghai aligned with national and municipal industry priorities.

2. Have a clear research scope, fixed premises, and necessary equipment.

3. Have invested at least $2 million in R&D over the past three years.

Requirements for global R&D centers

In addition to meeting the requirements for foreign-funded R&D centers, applicants must:

1. Hold formal authorization from their parent company as a top-tier global R&D center.

2. Have invested at least $20 million in R&D over the past three years.

3. Employ at least 50 full-time R&D employees.

4. Meet specific ratios for annual R&D spending compared with the parent company's global investment:

• At least 10 percent

• 8 percent if annual spending exceeds $20 million

• 5 percent if annual spending exceeds $100 million

• Division-based applications must have division-level R&D investment making up at least 20 percent of global division spending

Requirements for foreign-funded open innovation platforms

Applicants must:

1. Make a total investment of at least $2 million.

2. Have at least 1,000 square meters of R&D space.

3. Host at least 10 signed innovation projects.

4. Have concept validation capabilities and access to international experts, technologies, and talent.

III. Documents required for application

For foreign-funded R&D centers

• Application letter signed by the legal representative

• Shareholder or board resolution

• Special audit report covering R&D investment

For global R&D centers

All documents for foreign-funded R&D centers, plus:

• Authorization letter from the parent company's designated signatory

For foreign-funded open innovation platforms

All documents for foreign-funded R&D centers, plus:

• Proof of property ownership or lease

• Agreements for incoming platform projects

IV. How to apply

Applications may be submitted through the "Government Online-Offline Shanghai" portal. The competent authority must issue a decision within five working days after receiving complete materials.

V. Ongoing evaluation

Recognition is subject to dynamic evaluation. If a center no longer meets the standards, its recognition will be canceled.

If an entity changes its name or undergoes other registry-level changes, it must report within seven working days after completing market registration updates.

VI. Funding and support

Global R&D centers and open innovation platforms may receive financial support under the city's policy framework for regional headquarters of multinational companies.

VII. Effective dates

The new regulations take effect on Dec 1, 2025, and remain valid until Nov 30, 2030.

Source: Shanghai Municipal Commission of Commerce

Note: The English text is for reference only. In case of any discrepancies, the Chinese version shall prevail.