EU firms look to city for HQs
By Wang Yanlin |
April 8, 2011, Friday
|
Print Edition
Print Edition
SHANGHAI is considered the most attractive city in the region for multinational companies to locate their Asia-Pacific headquarters, according to a European Union Chamber of Commerce in China survey of members.
Shanghai was favored over other locations, including Hong Kong and Singapore, mainly due to its proximity to clients. This was regarded as the most important criteria for regional HQ location.
However, Shanghai needs to improve its regulatory and tax environment, further loosen restrictions on convertibility of the yuan and provide more skilled professionals in order to become a better home for multinationals, respondents to the survey said.
"The findings reflect China's growing importance in the world and the significance of Shanghai as the largest center of business and finance in China," said Piter de Jong, vice president of the European Chamber and chairman of the Shanghai Board.
"However, seeing how Shanghai is perceived vis-a-vis Hong Kong and Singapore on issues such as the legal and regulatory environment shows there still is room for improvement," De Jong added.
Respondents suggested the city should provide earlier and more detailed notice of regulatory changes and develop a consultation for regulatory issues facing multinationals.
And the level of both corporate and individual income tax makes Shanghai less competitive, said European Union Chamber of Commerce members. They called on the city to make corporate tax levels more attractive and reduce the effective individual income tax burden.
"It will be difficult because some policies are made in Beijing," De Jong said. "But we look forward to some pilot programs that help Shanghai to become more attractive."
De Jong added that the city needs to improve links between higher educational institutions and businesses, because there is a shortage of senior-level blue-collar workers, despite large numbers of graduates.
Respondents also said that to be a global financial center, Shanghai should make it possible for multinationals to trade the yuan more flexibly.
By the end of last year, 305 multinational companies had set up their regional headquarters in Shanghai, including 74 on the Fortune Global 500 list. In addition, 319 foreign-invested research and development centers were established in the city.
As well as being closer to the vast market on the Chinese mainland, Shanghai can also provide 126,000 graduates each year, lower operational costs compared to Hong Kong and Singapore, and sophisticated production facilities and distribution channels.
Respondents commented that "Shanghai is the place to be" and "if you want to do business in China, you have to be in Shanghai."
Shanghai was favored over other locations, including Hong Kong and Singapore, mainly due to its proximity to clients. This was regarded as the most important criteria for regional HQ location.
However, Shanghai needs to improve its regulatory and tax environment, further loosen restrictions on convertibility of the yuan and provide more skilled professionals in order to become a better home for multinationals, respondents to the survey said.
"The findings reflect China's growing importance in the world and the significance of Shanghai as the largest center of business and finance in China," said Piter de Jong, vice president of the European Chamber and chairman of the Shanghai Board.
"However, seeing how Shanghai is perceived vis-a-vis Hong Kong and Singapore on issues such as the legal and regulatory environment shows there still is room for improvement," De Jong added.
Respondents suggested the city should provide earlier and more detailed notice of regulatory changes and develop a consultation for regulatory issues facing multinationals.
And the level of both corporate and individual income tax makes Shanghai less competitive, said European Union Chamber of Commerce members. They called on the city to make corporate tax levels more attractive and reduce the effective individual income tax burden.
"It will be difficult because some policies are made in Beijing," De Jong said. "But we look forward to some pilot programs that help Shanghai to become more attractive."
De Jong added that the city needs to improve links between higher educational institutions and businesses, because there is a shortage of senior-level blue-collar workers, despite large numbers of graduates.
Respondents also said that to be a global financial center, Shanghai should make it possible for multinationals to trade the yuan more flexibly.
By the end of last year, 305 multinational companies had set up their regional headquarters in Shanghai, including 74 on the Fortune Global 500 list. In addition, 319 foreign-invested research and development centers were established in the city.
As well as being closer to the vast market on the Chinese mainland, Shanghai can also provide 126,000 graduates each year, lower operational costs compared to Hong Kong and Singapore, and sophisticated production facilities and distribution channels.
Respondents commented that "Shanghai is the place to be" and "if you want to do business in China, you have to be in Shanghai."
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