To fully leverage the important role of equity investment funds in promoting technological innovation and the transformation and development of the real economy, in accordance with the *Measures of Henan Province for Promoting the Development of Venture Capital* (Provincial Government Order No. 208),the "Notice of the General Office of the Henan Provincial People’s Government on Issuing the Implementation Plan for Promoting the High-Quality Development of Angel, Venture, and Private Equity Funds in Henan Province and the Establishment Plan for the Henan Provincial Government-Guided Funds for Digital Economy, Biomedicine, and New Materials" (Yu Zheng Ban [2021] No. 77), and the "Notice of the Henan Provincial Department of Finance on Issuing the Administrative Measures for Henan Provincial Government Investment Funds" (Yu Cai Jin [2023] No. 4), and in light of the actual conditions of our city, the following measures are formulated.
I. Work Objectives
Guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, fully implementing the spirit of the 20th National Congress of the Communist Party of China, and thoroughly carrying out the directives of the central and provincial Party committees’ financial work conferences, we will adhere to the principle of “government guidance, enterprise leadership, market-oriented operations, and risk prevention.” We aim to promote high-level circulation of capital, technology, and industry, focusing on “angel investment, industrial investment, and strategic investment,”we aim to foster a group of competitive and influential equity investment institutions in Nanyang. We will provide enterprises with full-lifecycle financial support and strive to establish 20 equity investment funds within three years, thereby contributing to the high-level development of our city as a modern sub-provincial center.
II. Work Measures
(1) Guiding the Clustering and Development of Equity Investment Institutions
1. Establish Equity Investment Clusters. High-quality equity investment clusters will be developed, centered on the “Venture Capital Space” in the Urban-Rural Integration Demonstration Zone and supplemented by the “Zhongguancun Smart Island” in the High-Tech Zone. Special support policies will be formulated to enhance the functionality of these clusters, provide “one-stop” services, attract high-quality equity investment institutions to settle in, and foster a sound financial ecosystem. (Responsible Units: Urban-Rural Integration Demonstration Zone, High-Tech Zone Administrative Committee)
2. Establish a third-party service mechanism. Encourage the Urban-Rural Integration Demonstration Zone and the High-Tech Zone to draw on third-party service models such as Shenzhen’s Qianhai Shenzhen-Hong Kong Fund Town, Zhengzhou High-Tech Zone’s Science and Technology Finance Plaza, and the Central Plains Fund Town. By establishing specialized operating entities, provide services to equity investment institutions within the cluster, including registration, investment and financing matchmaking, project roadshows, guidance on fund filing, policy consultation, and brand promotion. (Responsible Units: Urban-Rural Integration Demonstration Zone, High-Tech Zone Administrative Committee)
(II) Strengthening Policy Support
3. Incentives for Institutional Establishment. For equity investment funds newly registered in our city, those with a paid-in capital of 100 million yuan (inclusive) to 500 million yuan will receive a 500,000 yuan incentive for their management institutions; those with a paid-in capital of 500 million yuan (inclusive) or more will receive a 1 million yuan incentive for their management institutions. The cumulative incentive amount for each equity investment fund management institution shall not exceed 2 million yuan. (Responsible Units: Municipal Government Office, Finance Bureau; governments [administrative committees] of all counties [cities, districts])
4. Project Investment Incentives. Equity investment institutions established in Nanyang that make actual investments in local technology-based enterprises or projects (excluding real estate, stocks, and financial sectors) in the same year, with investment amounts exceeding 10 million yuan, shall receive a reward from the location where the investee enterprise is registered. The reward shall be 0.5% of the actual investment amount received, with a maximum of 500,000 yuan.(Responsible Units: Municipal Government Office, Finance Bureau, Science and Technology Bureau; governments [administrative committees] of all counties [cities, districts])
5. Talent Recruitment Incentives. For senior management and core personnel of equity investment institutions, in accordance with the relevant provisions of the “Notice of the Office of the CPC Nanyang Municipal Committee and the Nanyang Municipal People’s Government Office on the Issuance of <Several Measures for Deepening the Implementation of the “Zhuge Talent Plan” and Accelerating the Construction of a Talent-Strong City in the New Era> (Wan Ban [2021] No. 32), they shall enjoy preferential policies regarding children’s education, medical care, and housing security. (Responsible Units: Municipal Party Committee Talent Office, Municipal Education Bureau, Health, Sports, and Family Planning Commission, Housing and Urban-Rural Development Bureau, Finance Bureau, and governments [administrative committees] of all counties [cities, districts])
6. Office Space Subsidies. Newly registered equity investment institutions that purchase office space for their own use within the city’s equity investment cluster zone shall receive a subsidy equivalent to 5% of the actual purchase price, with a maximum of 1 million yuan. Eligible equity investment institutions that lease office space for their own use within the city shall receive a 100% rent subsidy for three years, with a subsidized area not exceeding 500 square meters and a cumulative subsidy not exceeding 600,000 yuan.Enterprises applying for rental subsidies must use the premises themselves during the subsidy period; otherwise, they must return the subsidy funds. Purchase and rental subsidies shall be disbursed by the fund’s registered location and cannot be claimed simultaneously. (Responsible Units: Urban-Rural Integration Demonstration Zone, High-Tech Zone Administrative Committee)
(3) Optimizing the Environment for Fund Development
7. Facilitate Registration and Licensing. Improve the comprehensive assessment and consultation mechanisms at the municipal and county levels to streamline the consultation and registration processes for the establishment and modification of equity investment institutions. At the municipal and county levels, departments such as development and reform and market regulation shall focus on assessing whether shareholders (contributors) of equity investment institutions applying for registration or modification have any history of operational irregularities, criminal records, credit anomalies, or being subject to enforcement actions for breach of trust.When processing business registration, municipal and county market regulation departments shall complete the process immediately if all required materials are submitted; if additional materials are needed, they shall inform the applicant of all required materials in a single notification. (Responsible Units: Municipal Government Office, Market Regulation Bureau, Development and Reform Commission)
8. Improve the intermediary service system. Support the development of intermediary service providers such as law firms, accounting firms, credit rating agencies, and professional market research institutions, and encourage them to provide services such as due diligence, project evaluation, and financial and legal consulting to equity investment institutions. (Responsible units: Municipal Bureau of Justice, Municipal Finance Bureau, and other relevant industry authorities; governments [administrative committees] of all counties [cities, districts])
9. Strictly manage and control risks. Equity investment institutions must register strictly in accordance with laws and regulations. Within six months of registration, they must complete registration and filing with the Asset Management Association of China (hereinafter referred to as the “AMAC”). If this is not completed by the deadline, the market regulation department shall enter the relevant information into the National Enterprise Credit Information Publicity System. The name and scope of business of equity investment institutions shall comply with the relevant requirements for registration and filing with the AMAC.No entity or individual may engage in private fund business activities, such as fundraising or fund management, without registration and filing with the ASIF. Relevant departments must strengthen coordination and severely crack down on illegal activities such as illegal fundraising and fraud committed under the guise of funds. (Responsible Units: Municipal Government Office, Market Regulation Bureau, Municipal People’s Procuratorate, Municipal Public Security Bureau, Municipal Intermediate People’s Court, and governments [administrative committees] of all counties [cities, districts])
(IV) Promoting the Integrated Development of Fundraising, Investment, Management, and Exit
10. Broaden fundraising channels. Encourage local listed companies and leading enterprises in various industries to participate in the establishment of equity investment funds. Encourage financial institutions to collaborate with equity investment institutions to implement investment-loan and investment-bond linkage, and promote various innovative models such as investment-loan-insurance linkage. Encourage financial institutions to increase investment in Nanyang by establishing fund management companies or setting up special-purpose funds.(Responsible Units: Municipal Finance Bureau, Development and Reform Commission, relevant state-owned functional companies, People’s Bank of China Nanyang Branch, Nanyang Regulatory Bureau of the National Financial Regulatory Administration)
11. Facilitate Investment Channels. Relevant departments at all levels shall identify high-quality projects by industry and region, establish high-quality industry and regional project reserve pools, and recommend them to equity investment funds; build platforms for fund-enterprise connectivity, and regularly organize activities such as project roadshows, financing matchmaking, and policy briefings to facilitate the connection between equity investment funds and potential investee enterprises.(Responsible Units: Municipal Development and Reform Commission, Finance Bureau, Industry and Information Technology Bureau, Science and Technology Bureau, Agriculture and Rural Affairs Bureau, and other relevant industry authorities)
12. Diversify exit channels. Support enterprises in raising capital through listings on the Beijing, Shanghai, and Shenzhen stock exchanges, as well as through listings on the National Equities Exchange and Quotations (NEEQ) and the Central China Equity Exchange. Facilitate the exit of equity investment funds via initial public offerings (IPOs). Encourage government investment funds and leading domestic investment institutions to establish secondary equity funds (S-funds) in Nanyang. Encourage various forms of social capital to establish merger and acquisition (M&A) funds through market-oriented mechanisms.(Responsible Units: Municipal Development and Reform Commission, Finance Bureau, Industry and Information Technology Bureau, and governments [administrative committees] of all counties [cities, districts])
(5) Stimulating the Vitality of Government Investment Funds
13. Improve the performance evaluation of fund investments. In accordance with the relevant requirements of the “Notice of the Henan Provincial Department of Finance on Issuing the <Interim Measures for the Performance Assessment and Evaluation Management of Provincial-Level Government Investment Funds in Henan Province>” (Yu Cai Jin [2022] No. 5), implement full-process performance management for established funds. Adhere to policy objectives and follow market principles, with a focus on evaluating the funds’ role in supporting the implementation of major projects determined by the Municipal Party Committee and Municipal Government, attracting investment, and promoting industrial transformation and upgrading.The results of fund performance evaluations shall serve as a key basis for improving fund management, adjusting capital contributions, optimizing investment directions, executing exits, and implementing rewards and penalties. We will appropriately amplify the leverage effect of fiscal funds and increase the supply of capital through profit-sharing, thereby further enhancing the efficiency of guiding and mobilizing social capital to invest in key industrial sectors and areas with development gaps. (Responsible Units: Municipal Finance Bureau, all state-owned functional companies)
14. Establish a fault-tolerance mechanism for government investment funds. For initiatives conducive to innovative development and state-owned asset investment operations, even if the expected investment outcomes are not achieved or losses are incurred, provided that the actions strictly followed investment decision-making procedures and were caused by force majeure or market failures, and provided that no individual sought personal gain or committed gross negligence, such cases shall be handled in accordance with the principle of exemption from liability for due diligence. (Responsible Units: Municipal Commission for Discipline Inspection and Supervision, Municipal Finance Bureau, Audit Bureau)
(VI) Supporting Industrial Development
15. Support state-owned functional companies in establishing fund management companies in accordance with their own strategic development needs, and in initiating or participating in the establishment of industrial funds. These funds shall focus on investing in growth-stage and mature-stage enterprises within the city’s “7+17” key industrial chain clusters to facilitate their timely access to capital markets.Implement the “One Chain, One Task Force, One Fund” initiative. Encourage county (city, district) governments (administrative committees) to leverage their resource endowments and industrial strengths to initiate and establish industry chain-specific funds, thereby helping to extend, complement, and strengthen industrial chains and promote industrial quality and efficiency. (Responsible Units: All State-Owned Functional Companies, Municipal Finance Bureau, Development and Reform Commission, Industry and Information Technology Bureau, and county [city, district] governments [administrative committees])
(7) Guide Funds to Invest Early, in Small Enterprises, and in Technology
16. Support state-controlled fund management institutions in fully leveraging their catalytic role in investing early, in small enterprises, and in technology, by initiating the establishment of angel investment guidance funds and venture capital guidance funds to promote the aggregation of various innovation factors toward our city’s technology-based small and medium-sized enterprises.Leveraging state-owned platforms such as Nanyang Industrial Investment Group Co., Ltd. and Nanyang Transportation Construction Investment Group Co., Ltd., we will explore the establishment of science and technology innovation funds and technology achievement transformation funds to enhance the coverage, convenience, and precision of financial services for technological innovation, thereby stimulating the enthusiasm of technology-based SMEs for R&D investment. (Responsible Units: Municipal Finance Bureau, Development and Reform Commission, Science and Technology Bureau)
III. Supplementary Provisions
(1) The term “equity investment institution” as used in these Measures refers to equity investment funds and equity investment fund management institutions registered in our city and filed with the China Securities Investment Fund Association.
(2) Equity investment institutions established with participation from fiscal funds at various levels and local enterprises shall be eligible for the incentive policies stipulated in these Measures only after deducting the portions contributed by fiscal funds and local enterprises. For enterprises registered in the central urban area (Wancheng District, Wolong District, High-Tech Zone, Vocational Education Park, Urban-Rural Integration Demonstration Zone, and Guan Zhuang Industrial Zone), subsidies shall be borne by the municipal and district fiscal authorities in proportion to their respective shares of tax revenue; for enterprises registered outside the central urban area, subsidies shall be fully borne by the county fiscal authority.
(3) Equity investment institutions receiving investment incentives and the investee enterprises or projects must not be under the same actual controller or ultimate beneficiary. Where the same matter qualifies for other policy provisions, the incentive or subsidy policy shall be applied in accordance with the principle of “choosing the higher amount and avoiding duplication.”
(4) Enterprises and individuals receiving rewards or subsidies under these measures must return the relevant fiscal rewards or subsidies if they fail to fulfill their commitments or engage in fraudulent activities.
These Measures shall take effect from the date of issuance. The “Notice of the General Office of the Nanyang Municipal People’s Government on Issuing the Nanyang Measures for Promoting the Development of Private Equity Investment Funds (Trial)” (Wan Zheng Ban [2021] No. 5) is hereby repealed.
