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Wenzhou Gives Incentives for Local Companies’ IPO

In order to encourage local enterprises’ going public, Wenzhou has recently unveiled a new policy to offer incentives to companies that carry out joint-equity reform or apply for IPO.

In recent years, Wenzhou authorities have given high priority to local enterprises’ going public, and an obvious progress has been seen. In the first half of this year, 57 companies have been newly reformed into joint-stock enterprises, 3 have completed their initial public offerings at home and abroad, 2 have filed their pre-IPO tutoring at China Securities Regulatory Commission Zhejiang Bureau, and 53 have signed contracts with brokerage, accounting or law firms.

An enterprise’s IPO starts from its joint-stock reform. The incentive policy will offer comprehensive rewards to those enterprise who carry out joint-stock transformation. For an enterprise that completes joint-stock reform, the government will provide an incentive of 50% of the new local contribution made by the enterprise over the previous year. If it also has signed contracts with brokerage, accounting or law firms, the incentive will be raised by 30%. For a company that has successfully been listed and invested over 50% of the raised funds in Wenzhou, the incentive will be 5‰ of the company’s IPO fundraising.

For a listed enterprise that relocate its registry and pay taxes to the Wenzhou government, it will be treated the same as newly listed companies in the city and offered a one-time incentive of no more than 10 million Yuan.

The Wenzhou government will also offer subsidies to companies which fail to pass the IPO review. At least 20% of the service fees paid to brokerage, accounting and law firms will be rebated by local fiscal authorities with a ceiling of no more than 2 million Yuan.

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