(Yicai) Sept. 3 -- As Shanghai attracts more and more multinational companies’ regional headquarters, the city’s leasing and business service sector thrives.

Shanghai’s foreign investment in the leasing and business service sector surged nearly 66 percent in the first seven months of the year from a year earlier, according to data released by the local statistics bureau.

3,624 foreign firms were established in Shanghai in the seven months ended July 31, up 3.1 percent from a year earlier, the data from the Shanghai Municipal Statistics Bureau showed. The foreign investment in actual use fell 11 percent to USD9.9 billion in the period, with the leasing and business services sector being the top target, accounting for USD4.9 billion.

The reason the leasing and business service sector ranks first by foreign investment in actual use is the development of the headquarters economy, Huang Feng, president of the Shanghai Foreign Investment Association, told Yicai. As more multinationals establish regional HQs in Shanghai, their investment amounts across China are included in the city’s figures, he added.

The strong growth in Shanghai’s leasing and business service sector is related to the continuous establishment of foreign companies’ HQs in the city, Zhan Yubo, director of the research office at the Institute of Economics of the Shanghai Academy of Social Sciences, told Yicai.

In recent years, Shanghai has consistently maintained its position as the city in the Chinese mainland with the most regional headquarters of multinational companies and foreign-funded research and development centers, Zhan noted.

Shanghai was the first in China to introduce policies to support the establishment of multinationals’ regional HQ in 2002. Since then, the city has continuously optimized and upgraded its policies to promote the development of the headquarters economy, based on the new trends and characteristics of multinational company investments.

On Aug. 27, the local commerce and finance authorities issued new regulations to grant selected multinationals setting up regional HQs and R&D centers in the city CNY5 million (USD699,680) in early-stage support funds. Meanwhile, existing multinational regional HQs and R&D centers wishing to upgrade can apply for a CNY10 million (USD1.4 million) subsidy.

Regional HQs that add new functions, such as innovation and R&D, can receive CNY3 million in funds, according to the new regulations.

As of February, Shanghai was home to 1,027 regional HQs of multinationals and 597 foreign R&D centers.

Editor: Futura Costaglione