(Yicai) May 23 -- Shenzhen is offering up to CNY150 million (USD20.7 million) in incentives to spur foreign companies to invest in areas such as high-end equipment manufacturing and biomedicine, according to a new policy released by the hi-tech hub earlier this week.

Shenzhen will focus on Fortune 500 enterprises, industry leaders, ‘hidden champions,’ scientific research bodies and research and development centers, Yicai learned from the government department in charge of promoting investment. The city will also bring in sovereign investment funds and family wealth management services.

Advanced manufacturing is the focus of this new policy. Manufacturers that added yearly at least USD50 million in foreign investment between 2023 and 2027 will be rewarded up to a maximum of CNY50 million (USD6.9 million) per company per year and no more than CNY150 million in total, the municipal government said. For high-tech manufacturing firms, the reward will be up to 3 percent of the actual amount invested and for other manufacturers the incentive is capped at 2 percent.

High-tech service providers can receive a reward up to 2 percent of the actual added foreign investment if the amount comes to at least USD50 million between 2023 and 2027. The ratio is set at a maximum of 1 percent for foreign-invested firms in other industries, up to CNY20 million per company per year, up to a total of CNY80 million. Financial institutions and real estate developers are not included in the scheme.

The new measures support eligible foreign-funded entities to perform bank card settlements, eligible offshore insurance bodies to invest in China in order to set up insurance companies or buy into onshore insurers and eligible fund managers to set up certain types of private equity funds. These private equity funds must have domestic investment, raise funds in a non-public manner and carry out investment activities onshore.

Shenzhen added 8,002 foreign-backed firms last year, a jump of 86.6 percent year on year, with foreign direct investment amounting to CNY62.6 billion (USD8.6 billion), public data showed. And in the first two months, it added 1,121 such firms, a 29.8 percent jump from a year ago and making up 15.7 percent of the national total. Meanwhile it racked up FDI of CNY7 billion (USD966.3 million) accounting for almost one third of that of southern Guangdong province.

Editors: Liao Shumin, Kim Taylor