¡¡¡¡Where as domestic enterprises
from outside of Chongqing(hereinafter referred to as "Outside
Investors") are encouraged to make investment in Chongqing to
promote the economic development of Chongqing, the following incentive
policies stipulated:
Definition:
¡¡¡¡"Outside Investment"shall mean
an investment made by domestic enterprises outside Chongqing."
¡¡¡¡"Outside Investors"shall mean
Domestic investors outside Chongqing who make investment in Chongqing."
¡¡¡¡"Outside investors-funded Enterprises"
refer to enterprises established in Chongqing by domestic investors
outside of Chongqing.
Taxation
1.For outside investors-funded enterprises established inside the
high & new technology zone by Outside Investors who have been
verified by the Municipal Science and Technology Commission, income
tax of the first two operation years shall be exempted, and will then
be levied at a discount of 15% of the normal rate following the expiration
of the two free years.
2.Favorable treatment shall be given to independent tertiary industries
set up by Outside Investors according to different trade, to be classified
as follows:
(1)A free income tax for two years since the operational day for newly
established consultancies covering science & technology, legal
affairs accounting ,auditing and taxation areas, as well as for information
industry and technical service.
(2)A free income tax for the first year and the levying of income
tax at half of the normal rate for the second year since the operation
day for newly established transport, post and telecom enterprises.
(3)Free of levying of income tax at discounted rate for the first
year since the operation day for newly established enterprises covering
the areas of public utilities, commercial business, material supplies,
education and medical service,subject to approval of taxation authorities.
3.A 5-year free income tax for outside investor-funded enterprises
engaged in productions as a utilization of wast water, gas and sludge.
4.A 3-year free income tax or levying at discounted rate for outside
investor-funded enterprises in minority of poverty-striken areas
of Chongqing as defined by the state, subject to the approval of
taxation authorities.
5.For outside investor-funded enterprises producing environmental
protection products as listed in the Product List of Presently Encouraged
for Environment Purpose as publicized by the State Economic &
Trade Commission and the State Taxation Bureau, the income tax shall
be exempted if the net annual income of such enterprises is less
than RMB 300,000 yuan(inclusive of RMB 300,000 yuan).
6. For outside investor-funded enterprises engaged in technical
transfer, including the income incurred during the consultancy,
technical service or training associated with the transfer is less
than RMB 300,000 yuan , but if the net annual income reaches RMB
300,000 yuan , income tax shall be imposed on the exceeding amount.
7.For the land exploited and the enterprises set up by Outside
Investors for the pupose of settlement of countryside emigrants,
the agricultural tax, forest tax, and income tax may be exempted
or levied at a discounted rate according to law.
8.Import of materials which are in accordance with the state stipulations
and which are required by the project on co-operative basis between
domestic enterprises inside the Three-Gorges Reservoir area and
the Outside Investors shall be duty free, duties and the VAT paid
shall be refunded,to be applied to central authorities by local
authorities. The volume of import will be assessed yearly.
9.Income tax shall be exempted for schools set up by Outside Investors
according to applicable state regulations. The state preferential
policies shall also apply to Outside Investors who participate in
the logistic service for colleges.
10.In the event of outside investors-funded enterprises employing
laidoff workers of jobless persons for a stable 3 years,applicable
tax exemptions as defined in Chongqing's Preferential Policied for
Encouraging Employment shall be enjoyed according to the proportion
of recruitment of the laid-off or the jobless.
11.In the event of outside investors participating in resettlement
of enterprises that cause serious pollution problems, they are allowed
to use 40% of the investment in purchasing domestic made equipment
to offset the income tax due in the same year.
Financial Management
12.In case that Outside Investors take over removing enterprises in
Three Gorges area which are at a loss as of 1998, the interest charges
of the debts of the taken over enterprises as of 1998 may be exempted,
as well as the interest in future 3-5 years, subject to consent of
the crediting bank as long as a plan for clearing off the debt is
agreed on.
13.Chongqing will give priorities to project in co-operation with
Outside Investors for discounted loans according to relevant regulations.
14.High and new technology-oriented project set up by Outside investors
or on co-operative basis with local enterprises shall be given the
priorities of loan guarantees as long as the project meets relevant
conditions.
Forms of Investment & Miscellaneous
15.Outside investors-funded enterprises investing in agricultural
planting and seeding shall enjoy the same treatment as for foreign-funded
enterprises.
16.In case that outside investors-funded enterprises investing
in resettlement of enterprises in urban districts which cause pollution,
a system of separate expentitures and incomes shall be implemented
and the outside investors will use 50% of the sums of land let out
as an investment in the resettlement.
17.Outside investors are allowed to set up chain post shops utilizing
post offices by means of agency agreement of exclusive sales on
the basis of mutual benefit.
18. The maximum amount of investment that is made by Outside Investors
in manner of technology may reach 35% of the total registered capital,
and that of the state-of- the-art technology at international advanced
level may exceeding 35% of the total registered capital, subject
to mutual consent and assessment of relevant authorities.
19.In case that the Outside Investors make an investment with personal
technology, 20% or the above of the shares of the technology can
be retained by the persons who accomplished the technology, extremely
outstanding persons can hold shares of above 50%, actual number
of shares may be determined by the top management of the technology
owners.
20.In case that technical achivement brought in by Outside Investors
is effectively utilized in Chongqing and proved to be of significance,
special discounted financing support shall be provided and the persons
of outside Investors who have contributed to this achievement will
be awarded with title of "onored citizen of Chongqing?by Chongqing
Government according to law."
21.Construction market of Chongqing including consultant, design,
tendering, monitoring, engineering(inclusive of engineering contract)
and materials purchases shall be opened up to the Outside Investors.
All qualified Outside Investors are entitled to join in the tendering
activities in local construction market.
22.In the event of Outside Investors investing in projects which
do not require local guarantee in manner of assets or land, all
fees in relation to the list of Chongqing's Administrative Charges
shall be charged at half of the normal rate except for the charges
for cost of certificate.
23.Following preferential policies shall be granted to Outside
Investors who are in Chongqing for investment, take over of merge
of industrial enterprises:
(1) Financing support shall be extended to those which have good
profitable technology or product, and the interest of the debts
of the taken over enterprises as of the merging date may be exempted
if the merger is in the state plan if a 5-7 year repayment plan
is agreed.
(2) Policies in support of re-employment shall be extended. The
settlement of laid-off workers before merges in the event of merges
with state-owned enterprises shall be treated according to original
stipulations on the re-employment. For re-employment Class 3 state-owned
enterprises, part of the cost on resettlement of laid-off workers
shall be covered by government after the take-over by Outside Investors.
Priorities shall also be given to outside investors-funded enterprises
for resettlement of laid-off workers in other ways. For merges where
the state-owned enterprises are taken over by non-state-owned enterprises,
net assets of the taken over(if any) can be used for pensions and
medical expenses of the workers,(inclusive of the retired) which
are to be determined as per the government regulations.
The above shall come to effect from July 1,2000
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