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Government’s support for SMEs during Coronavirus Outbreak
As the outbreak of the novel coronavirus in China hampers business activity, Shanghai government is rolling out a series of measures to support small and medium-sized enterprises (SMEs).
In February, 2020, Shanghai Municipal HRSSB announced four measures to help enterprises combat challenges arising from the coronavirus outbreak, including:
- Refunding 50 percent of unemployment insurance premiums paid in the previous year to qualified employers with few job cuts;
- Adjusting the starting month of social insurance payment year from April 1 to July 1; In the "Shanghai Social Security" WeChat public account, launched the "deferred payment filing" function. (Follow the "Shanghai Social Security" WeChat public account. In the “Services· Societies" column at the bottom, select "Deferred Reporting Form" and enter the "Online Pre-Declaration System for Extended Social Insurance Payment Period".)
- Extending social insurance payment period for three months after the epidemic is over;
- From February to December 2020, the city’s employee basic medical insurance (including maternity insurance) unit payment ratio decreased by 0.5 percentage, that is, from 10.5% to 10%; flexible employment personnel to pay the employee basic medical insurance ratio from 11.5% to 11%.
On February 7, 2020, the city rolled out another 28 measures to support enterprises fighting against the novel coronavirus.
Here, we have filtered out some important policies more relevant to foreign enterprises:
- Exempting SMEs that lease state-owned assets for production and operation and that are badly affected by the epidemic from paying rental in February and March, encouraging commercial property owners to waive or reduce rentals for tenants, and allowing commercial property owners to apply for a reduction in property tax or land use tax;
- Lowering lending rates. For SMEs heavily impacted by the epidemic, local banks are required to offer loans with interest rates at least 25 basis points lower than the LPR benchmark;
- Encouraging local banks to adjust the repayment arrangement, extend maturity periods for loans, or renew the loan without repayment for enterprises that use the capital in industries that are heavily hit by the epidemic, including tourism, accommodation and catering, wholesale and retail, transportation, logistics and warehousing, culture and entertainment, convention and exhibition;
- Lowering the employees’ medical insurance premiums contribution rate of enterprises by 0.5 percentage points in 2020;
- Offering key support to high-growth startups specializing in online healthcare, original innovative drugs, medical supplies, and medical devices; and
- For enterprises unable to fulfill international trade contracts due to the epidemic, the Council for the Promotion of International Trade Shanghai is expected to issue a factual proof of force majeure upon request.
The 28 measures are in effect as of the date of issuance and won’t expire until three months after the epidemic is resolved.
On February 7, 2020, the city rolled out another 28 measures to support enterprises fighting against the novel coronavirus.
Here, we have filtered out some important policies more relevant to foreign enterprises:
- Exempting SMEs that lease state-owned assets for production and operation and that are badly affected by the epidemic from paying rental in February and March, encouraging commercial property owners to waive or reduce rentals for tenants, and allowing commercial property owners to apply for a reduction in property tax or land use tax;
- Lowering lending rates. For SMEs heavily impacted by the epidemic, local banks are required to offer loans with interest rates at least 25 basis points lower than the LPR benchmark;
- Encouraging local banks to adjust the repayment arrangement, extend maturity periods for loans, or renew the loan without repayment for enterprises that use the capital in industries that are heavily hit by the epidemic, including tourism, accommodation and catering, wholesale and retail, transportation, logistics and warehousing, culture and entertainment, convention and exhibition;
- Lowering the employees’ medical insurance premiums contribution rate of enterprises by 0.5 percentage points in 2020;
- Offering key support to high-growth startups specializing in online healthcare, original innovative drugs, medical supplies, and medical devices; and
- For enterprises unable to fulfill international trade contracts due to the epidemic, the Council for the Promotion of International Trade Shanghai is expected to issue a factual proof of force majeure upon request.
The 28 measures are in effect as of the date of issuance and won’t expire until three months after the epidemic is resolved.