Most corporate treasuries have set up their regional corporate treasury departments in Asia-Pacific in either Hong Kong or Singapore. China is now aiming to change this as it tries to upgrade its value chain from a manufacturing to a service led economy, with an increasing number of incentives to attract the set up of shared services centres.
About 21 cities in China have been designated as the nation's shared services and outsourcing (SSO) hubs, with the biggest clusters surrounding Chengdu, Dalian and Suzhou. Companies with technology content (subject to verification) can qualify as China's Hi-New Technology Enterprises, enabling them to enjoy a discounted corporate income tax (CIT) rate at 15%, instead of the standard 25%. Besides, enterprises that qualify as "Software Company" can enjoy a two-year waiver of CIT and paying only half of CIT in the third year when they start reaping a profit plus a host of other benefits.
Suzhou Industrial Park (SIP) is one of China's first SSO hubs have now attracted about 1,500 service outsourcing companies spanning from BPO, ITO, KPO to CRO with a total work force exceeding 70,000. In 2012, SIP's total service contracts executed for offshore businesses amounted to $1.76 billion. And there is even competition on the level of between cities to attract new business.
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