Original Title: Notice from the Office of the People’s Government of Hanshan County on Issuing the Administrative Measures for Innovation and Entrepreneurship Support Funds for High-Level Scientific and Technological Talent Teams in Hanshan County (Revised Version)
Measures for the Administration of Innovation and Entrepreneurship Support Funds for High-Level Science and Technology Talent Teams in Hanshan County (Revised Version)
1. General Provisions
Article 1 These Measures are formulated to attract and support high-level scientific and technological talent teams (hereinafter referred to as “scientific and technological teams”) in engaging in innovation and entrepreneurship within our county, and to standardize the management of support funds for such teams, in accordance with the spirit of the “Implementation Opinions of the Ma’anshan Municipal People’s Government on Further Improving the Recruitment and Cultivation of Scientific and Technological Talent Teams” (Ma Zheng Mi [2020] No. 17).
Article 2 The county finance department shall allocate county-level support funds for science and technology teams. In accordance with the principles of “government guidance, market operation, scientific decision-making, and risk prevention,” these funds shall be entrusted to the Hanshan County High-Tech Venture Capital Co., Ltd. (hereinafter referred to as the “County High-Tech Venture Capital Company”) for management and use, with the aim of promoting innovation, entrepreneurship, and industrial transformation and upgrading in our county.
The County High-Tech Venture Capital Company is operated and managed by the County Urban Investment Company and is responsible for implementing support for science and technology team projects through equity or debt financing.
Article 3 The term of equity or debt support shall be 5 years. For debt-based support, the interest rate shall be based on the benchmark interest rate for bank loans of the same term. Additionally, it may be agreed that for technology team enterprises that achieve significant results in the industrialization of scientific and technological achievements within 2 years after the signing of the agreement, the debt may be converted into equity investment at a price agreed upon by both parties, and the interest accrued during the debt period shall be waived.
2. Work Procedures
Article 4: The recruitment of technology teams shall adhere to the principles of openness, fairness, and merit-based selection. The procedures are as follows:
(1) Project Recruitment. The County Investment Promotion Center shall play a leading role in the recruitment of science and technology teams, focusing on “dual recruitment and dual attraction” to further optimize and integrate investment promotion resources. Aligning with the provincial application criteria for science and technology teams, the center shall implement a targeted talent recruitment model of “leading talents + innovation teams + innovation projects” to actively attract science and technology teams to engage in innovation and entrepreneurship in Han.
(2) Project Application. Applications will be accepted once annually. The County Science and Technology Bureau will issue an application notice, organize science and technology teams to complete the “Anhui Province High-Level Science and Technology Talent Team Application Form” as required, and submit supporting materials to the County Science and Technology Bureau. The County Science and Technology Bureau is responsible for conducting a preliminary review of the materials against provincial standards, providing expert consultation and services for evaluating the technological advancement of the teams and projects, and selecting team projects that meet the support criteria.
(3) Project Support. The County Science and Technology Bureau is responsible for recommending teams that have passed the preliminary review to the County Urban Investment Company. The County Urban Investment Company is responsible for conducting due diligence on the submitted projects and enterprises, engaging in commercial negotiations with the science and technology teams and enterprises established in Han regarding investment methods and exit mechanisms, and proposing support recommendations. After these recommendations are reviewed by the Science and Technology Team Leading Group and approved by the County Government Executive Meeting, project investment will be implemented.
(4) Project Recommendation. The County Science and Technology Bureau shall recommend county-level support projects for provincial science and technology team applications in accordance with provincial application requirements.
Article 5 The County High-Tech Venture Capital Company, acting as the representative for the county’s support funds, shall, in accordance with relevant laws, regulations, and policy provisions, jointly sign the “High-Level Science and Technology Talent Team Support Agreement” with the science and technology team and relevant parties, and shall be responsible for ensuring the disbursement of county-level support funds.
When the County High-Tech Venture Capital Company signs the “High-Level Science and Technology Talent Team Support Agreement” with the science and technology team and relevant entities, the requirements stipulated in Articles 7 and 10 of these Measures must be included in the agreement.
Article 6: Science and technology team enterprises approved for support by the county government shall be categorized into three classes—A, B, and C—with support funds of 10 million, 6 million, and 3 million respectively, funded by the county treasury. A support fund incentive mechanism shall be established; projects meeting the following conditions may be converted into incentive funds for support upon completion of the project.
(1) If an enterprise established by a scientific and technological team successfully lists on the domestic Main Board, SME Board, Growth Enterprise Market, or the Hong Kong Stock Exchange within five years of the agreement’s signing, the county’s support funds in the form of equity shares or debt obligations held by the company shall be fully awarded to the team members. For each year of delay in listing, the award proportion shall be reduced by 20%.
(2) A technology team enterprise is eligible for the reward only if, over the five consecutive fiscal years following the signing of the agreement (including the year of signing), the cumulative actual tax paid on its main business revenue (excluding land use tax; the same applies hereinafter) reaches the total amount of the county’s support funds. The reward amount shall be 30% of the county’s support funds’ equity (or debt) stake in the company;For every 20% by which the cumulative actual tax paid on main business revenue (excluding land use tax) exceeds the total amount of the county’s support funds, the reward shall be increased by 10% of the county’s equity (or debt) stake in the company; the total reward shall not exceed 100% of the county’s equity (or debt) stake in the company.
(3) Within 60 months of the signing of this agreement (including the 60th month; any period less than one year shall be counted as one year), the technology team shall have the right to repurchase the equity held by the county support fund or repay the debt based on the investment principal and the cost of funds calculated using the benchmark lending rate for the same period.
The technology team may choose to benefit from any one of the three support policies listed above, but may select only one. The selection period shall not exceed 60 months from the date the county support funds are disbursed.
For key supported teams that can have a significant impact on the economic development of Hengshan, a “case-by-case” approach may be adopted, with the reward amount to be separately stipulated in the agreement.
Subsidy policies for agricultural enterprises may be implemented in accordance with the provincial subsidy policies for technology teams.
Article 7: If, 60 months after the signing of the agreement, the technology team enterprise fails to meet the aforementioned support criteria, it will no longer be eligible for the relevant incentive policies, and the county support funds will be withdrawn; all shareholders of the technology team enterprise shall cooperate with this process.
Article 8: When the County High-Tech Venture Capital Company invests in the technology team enterprise, a joint supervision account must be established. Funds shall be disbursed in accordance with the enterprise’s capital utilization plan and project progress. The funds shall be used exclusively to expand the scale of existing core business operations and to develop new businesses related to the core business; they shall not be used for non-operational corporate expenditures or any financial transactions (including but not limited to shareholder loans, fund occupation by related parties, entrusted asset management, entrusted loans, and futures trading) or other purposes.
3. Responsibilities
Article 9 Duties of the Relevant Responsible Entities:
(1) Responsibilities of the County Investment Promotion Center
1. Responsible for the recruitment of technology teams, promptly assigning recruitment tasks, and regularly monitoring progress.
2. Incorporate the recruitment of technology teams into the annual investment promotion assessment and evaluate the performance of each town, the Hanshan Economic Development Zone, and the Investment Promotion Branch.
(2) Responsibilities of the County Science and Technology Bureau
1. Responsible for publicizing and guiding policies regarding technology teams, promptly notifying stakeholders and issuing relevant announcements. Conduct preliminary evaluations of technology teams recommended by relevant units, towns, and the Hanshan Economic Development Zone.
2. Organize the application process for county-supported projects to be designated as provincial-level technology teams and provide professional guidance.
3. Cooperate with the County Finance Bureau and the County Urban Investment Company to conduct performance evaluations and supervision of science and technology team projects.
(3) Responsibilities of the County Finance Bureau
1. Responsible for coordinating and allocating county-level support funds for science and technology teams, incorporating these funds into the annual fiscal budget, and, upon approval by the County Government, promptly disbursing the funds to the County Urban Investment Company.
2. Conduct key performance evaluations of the use of funds for science and technology team projects and, based on the evaluation results, submit recommendations to the County Government regarding the allocation of funds for science and technology teams.
3. Be responsible for disbursing management fees for technology teams to the County High-Tech Venture Capital Company; the specific amount shall be determined through consultation between the County Finance Bureau and the County Urban Investment Company.
(IV) Responsibilities of the County Urban Investment Company
1. Conduct in-depth due diligence on technology teams and enterprises and prepare an investigation report.
2. Be responsible for project negotiations with technology teams, focusing on commercial negotiations with applicant teams regarding support mechanisms, the use of support funds, incentives, exit strategies, and measures for handling illegal or non-compliant use of support funds, and draft investment agreements.
3. Be responsible for the management of county support funds for technology team projects; for projects approved by the County Government Executive Meeting, promptly disburse county-level support funds to enterprises in conjunction with the County Finance Bureau; and supervise and manage the production and business operations of technology teams as well as the use of support funds, while implementing risk prevention and control measures.
3. Oversee and inspect the implementation of technology team projects.
4. Take the lead in managing the repurchase, recovery, and exit of project funds.
(V) Responsibilities of Towns and the Hanshan Economic Development Zone
1. Responsible for strengthening the promotion of innovation and entrepreneurship policies for high-level science and technology talent teams; actively attracting science and technology teams that meet investment criteria to establish enterprises; and promptly recommending them to the County Science and Technology Bureau.
2. Responsible for cooperating with the County Urban Investment Company to conduct due diligence and other preliminary application preparations for enterprises established by eligible technology teams within their jurisdiction.
3. Responsible for assisting in the supervision, management, and risk prevention and control of the production and business operations of enterprises established by science and technology teams within their jurisdiction, as well as the use of support funds.
4. Cooperate with the County Investment Company to carry out the implementation, exit, recovery, and rectification of project funds.
(6) Responsibilities of Other Member Units of the Leading Group
1. Responsible for identifying leads on technology teams that meet investment criteria and promptly reporting them to the County Investment Promotion Center.
2. Actively participate in voting on major decisions regarding county science and technology team projects.
3. Comply with the work arrangements of the County Leading Group for High-Level Science and Technology Talent Teams.
Article 10: If a technology team’s established enterprise engages in any of the following behaviors, the technology team and the established enterprise shall return the county’s support funds to the County Investment Company and pay a funding usage fee at an annualized interest rate of 10%:
(1) Failing to convert scientific and technological achievements into products and generate sales revenue within 18 months of registration, or failing to achieve the production and revenue targets specified in the agreement;
(2) Failure to use the support funds for their intended purposes, or the occurrence of capital diversion, non-arm’s-length related-party transactions, or failure to follow necessary internal decision-making procedures for major matters;
(3) Significant changes occur in the equity holdings of core members of the technology team;
(4) Other violations of laws, regulations, or the terms of the agreement.
Article 11: If a scientific and technological team or the enterprise it establishes obtains fiscal funds through fraudulent means or uses the funds for purposes other than those specified, the full amount of the funds shall be recovered upon verification, and penalties shall be imposed in accordance with regulations. Additionally, the enterprise and its team members shall be included in the joint credit reporting system and shall be prohibited from applying for any type of government subsidy for a period of five years.
Funds that have been withheld, misappropriated, falsely reported, or fraudulently obtained shall be recovered, and relevant entities and individuals shall be held accountable in accordance with the "Regulations on the Penalties for Fiscal Law Violations" and other relevant provisions. Where criminal suspicion exists, the case shall be transferred to judicial authorities for handling in accordance with the law.
Article 12: A project error-tolerance mechanism shall be established. Provided that investigations, support, and management of science and technology teams and enterprises have been properly carried out, project failures resulting from objective factors such as market conditions or technological pathways shall be treated with prudent tolerance.
4. Supplementary Provisions
Article 13 The County Science and Technology Bureau, the County Finance Bureau, and the County Urban Investment Company shall be responsible for interpreting these Measures.
Article 14 These Measures shall take effect from the date of issuance. The “Measures for the Administration of Innovation and Entrepreneurship Support Funds for High-Level Science and Technology Talent Teams in Hanshan County” (Hanzhengban [2019] No. 58) issued by the Office of the Hanshan County People’s Government is hereby repealed.
