Notice regarding the application for funding the development of international service outsourcing businesses in 2013 (Caiqi [2013] No. 52)
Synopsis
To promote development of international service outsourcing (“ISO”) businesses, on 9 April 2013, the MOF and Ministry of Commerce (MOFCOM) jointly released Caiqi [2013] No. 52 (“Circular 52”) regarding the application for funding the development of ISO businesses in 2013.
Main points of Circular 52 include:
Definition of ISO businesses
ISO businesses stipulated in Circular 52 refer to service outsourcing activities carried out by Chinese companies that have signed service outsourcing contracts with overseas clients, and derive income from the provision of offshore outsourcing services.
Scope of ISO businesses
Pursuant to Circular 52, ISO businesses include information technology outsourcing (ITO), business process outsourcing (BPO) and knowledge process outsourcing (KPO). Detailed scopes of ITO, BPO and KPO have also been set out in the appendix of Circular 52.
Fields that the funding supports
Ø Establishment of the public service platform for service outsourcing in 21 model cities;
Ø International qualification verification for qualifying companies;
Ø Training of talented staff of ISO companies;
Ø Training of ISO talents by training institutions.
Conditions for qualifying ISO companies
Ø The enterprises are established in China with legal person status. They have performed registration for entities engaging in foreign trade and submitted reporting forms stipulated in the “service outsourcing statistic regulation.”
Ø Enterprises have not been subject to penalties by the commerce, finance, tax, foreign exchange and customs authorities within two years.
Ø Enterprises have signed medium-to-long term service outsourcing contracts with service outsourcing contractors and meet one of the following conditions:
Ø Their outsourcing service income in 2012 should not be less than USD500,000, 50% or more of such income should be derived from ISO businesses.
Ø Their outsourcing service income in 2012 should not be less than USD5,000,000, 35% or more of such income should be derived from ISO businesses.
Ø Employees of the enterprises should have the ability to operate ISO businesses. More than 70% of total employees should have qualifications at junior college level or above.
Standards and modes of funding
The funding is provided to service outsourcing businesses for the period from 1 July 2012 to 31 March 2013 and summarized below:
Ø A subsidy of RMB5 million to each model city for establishment of the public service platform;
Ø A subsidy of up to RMB500,000 to service outsourcing companies for qualified verification projects. Each company can apply for the subsidy for up to three projects per year.
Ø A training subsidy of up to RMB4,500 to service outsourcing companies for every graduate with qualifications at junior college level or above for the newly employed with a contract of at least one year;
Ø A subsidy of up to RMB500 to qualifying training institutions for every graduate with qualifications at junior college level or above trained by them and employed by a service outsourcing company with a contract of at least one year.
Our observations
To implement Circular 52 according to local conditions, commerce and finance authorities at the local level may issue their own local regulations. Service outsourcing companies may wish to study Circular 52 and upcoming local rules in detail and assess if they are eligible for subsidies. Qualified companies should consult with and lodge their applications to relevant commerce and finance authorities as soon as possible.
You may click this link to access full content of Circular 52: