Hefei issues policies to foster high-growth firms

The municipal government of Hefei in East China's Anhui province has issued a notice on several policies, designed to foster the expansion of high-growth enterprises in the city.

It aims to implement the innovation-driven development strategy, follow the guidelines of the fifth plenary session of the 19th Central Committee of the Communist Party of China – and follow Hefei's implementation on building an innovation city with an international influence.

Moreover, it will support high-growth enterprises to become important sources of innovation.

The policies include:

1. Establishing a cultivation base for high-growth enterprises in five tiers: high-growth seed enterprises, potential gazelle enterprises, gazelle enterprises, potential unicorn enterprises and unicorn enterprises. The base will select and manage a batch of innovative and promising enterprises every year.

2. Encouraging high-growth companies to apply for national and provincial major sci-tech projects and to be national high-tech enterprises. The city will subsidize the R&D expenses of the high-growth businesses in the base that meet the criteria, with a maximum subsidy of 5 million yuan ($690,049) per enterprise per year.

3. Setting up a fiscal risk compensation mechanism and a cultivation loan for high-growth enterprises – using the funds of the financial product risk pool to support their financing and provide fiscal subsidies for loan guarantee losses, interest and guarantee fees. The maximum loan amount per enterprise ranges from 5-20 million yuan, depending on the tier of the business.

4. Increasing the investment intensity of angel investment funds, giving full play to the role of government guidance funds – such as the Hefei Science and Technology Investment Fund and the Binhu Science City Investment Development Fund. Also, supporting high-growth enterprises through direct investment or by setting up sub-funds. The city will also support social capital to set up special funds for direct investment in high-growth enterprises.

5. Establishing a project matchmaking committee and a shared investment project pool. In addition, forming a linkage cultivation system for joint investments, follow-up investments and additional investments for the shared investment project pool, according to the different tiers of enterprises.

6. Forming a high-growth enterprise cultivation expert consulting team and providing consulting services for businesses in strategic planning, business management, human resources and market planning.

The notice states that the policies will not overlap with other municipal special policies and will be interpreted by the Hefei Municipal Science and Technology Bureau. The policies took effect from April 1, 2021, for three years.