prefrential policies

		Preferential Policies and Investment Guarantee in Xiaogan City I. Preferential Investment Policy Of Xiaogan City Proper Article 1. Xiaogan City Proper refers to the urban administrative areawhich is under direct jurisdiction of the municipal authority, the Administrative Committee of Xiaogan City New Industry Development Zone and Xiaonan District Government. Article 2. In the city proper, enterprises with foreign investment in the forms of wholly foreign-owned capital, sino-foreign equity joint venture, sino-foreign contractual joint venture, compensation trade, processing with imported materials shall enjoy the preferential treatments stipulated by this favorable investment policy and by the State Council and by Hubei Provincial Government as well. Article 3. Investors are encouraged to invest in the industries of automobile, machinery electronic equipment, light and textile, building materials, chemical and metallurgy, food processing and give priority to the development of energy, traffic communication, telecommunication, urban infrastructure, agricultural by-product finely -processing, tourism industry, real estate, and others. II. Taxes and Charges Article 4. Income tax levied on a productive enterprise with foreign investment which is scheduled to operate for more than ten years shall be exempted for two years from the first profit-making year and then shall be reduced by 50% for three years. Article 5. At expiration of the exemption and the reduction, income tax to an export-oriented enterprise shall continue to be reduced by 50% as the export output value reaches 70% of that year's. Article 6. Income tax levied on a technically advanced enterprise, at expiration of the exemption and the reduction, shall be reduced by 50% for another three years. Article 7. Income tax levied on a foreign investment enterprise engaging in farming, animal husbandry and forestry, at expiration of the exemption and the reduction, shall be reduced by 10%- 30% for another ten years. Article 8. 40% of the handed-in enterprise income tax of the additional investment shall be returned to him as a foreign investor, with the profit distributed to him from the joint venture enterprise, makes investment again to increase the original registered capital or to set up another enterprise with the running period of more than five years. If it is to make establishment of an export-oriented or a technically advanced enterprise, all the handed-in income tax shall be returned. Article 9. A foreign-invested enterprise shall be exempted from local income tax during the period of enjoying the exemption and the reduction of enterprise income tax. After the expiration, an export -oriented or a technically advanced enterprise shall be exempted from local income for additional nine years; enterprises with foreign investment in energy, traffic communication, raw materials, agricultural development and enterprises by utilizing factory building and production site and by transforming the existing productive enterprises shall be exempted from local income tax for additional six years; the other enterprises with foreign investment shall be exempted for additional three years. The above mentioned enterprises can continue to apply for the exemption of local income tax at expiration of the exemption, however, the total years of exemption shall not exceed the sheduled operation duration. Article 10. When a foreign investor remits abroad the legitimate profit distributed to him by an enterprise, the amount remitted shall be exempted from income tax. Article 11. Taxation to an enterprise with foreign investment on urban house property and licenses of vehicles and ships shall be postponed. Article 12. In accordance with the state's stipulation, the local authority shall return the value-added tax and the consumption tax paid by a foreign investment enterprise when the enterprise, which is established after January 1st 1994, directly exports its products abroad. Article 13. Charges on Preferential Terms: (1) The urban construction administrative departments shall collect fees as follows: 50% discount for planning and designing, prospecting and surveying; 70% discount for construction of urban public facilities and qualitycontrol of architectural engineering. (2) The land administrative departments shall collect fees as follows: 70% discount for land management; 50% discount for land surveying and drawing and evaluating. (3) The power and the water supply administrative departments shall collect fees as follows. 60% discount for construction of power resource; 60% discount for capacity enlargement of tap water installment. (4) For post and telecommunication, the enterprises with foreign investment shall enjoy the charge of 70% discount for a firstly -installing telephone and the free charge of having a facsimile set attached to the same line. (5) The charge of capacity enlargement of urban population shall be free for foreign investors. (6) Apartments or houses in the city proper shall be sold to foreign investors at almost cost price. III. Use of Land Article 14. A foreign-invested enterprise can apply for the right of land use in line with the legal regulation on sale and transference of land. After approval, the enterprise can engage in developing, utilizing and operating the land. The right of land use obtained in the way of sale can be transferred, rented, mortgated or used for other legal economic activities within the scheduled operation period of land use. Article 15. The enterprise with foreign investment in automobile manufacture shall be offered the preferential treatment of having theland use right in the way of transference. The enterprise which has gained the right of land use in the way of transference shall be given the preferential treatment of land use as follows. (1) With investment from oversea Chinese and compatriots in Taiwan, Hong Kong and Macao, an export-oriented enterprise, a technologically advanced or an automobile manufacturing enterprise shall be exempted from site use fee for four years from the 1st land-use day stipulated in the formal contract. At expiration of the exemption, 5- 8 yuan a square meter a year for developing and utilizing fees, less than 2 yuan a square meter a year for one-time charge on developing or developing by itself. The foreign-invested enterprise shall be exempted from site-use fee for 5 years if it utilizing or transforming the existing productive enterprises, at expiration of the exemption, less than 1 yuan a square meter a year shall be charged on land-use. (2) For other enterprises established by overseas Chinese and compatriots in Taiwan, Hong Kong, and Macao, 70% discount for land- use fee according to the standard stipulated by the State. (3) With investment from foreigners, a technologically advanced enterprise, an export- oriented or an automobile manufacturing ones shall be exempted from site use fee for three year from the 1st land-use day stipulated in the formal contract, at expiration of the exemption, 5-12 yuan a square meter a year shall be collected for developing and using fees; no more than 2 yuan a square meter a year ofland-use fee (excluding developing fee). (4) The foreign investors who develop uncultivated land or barren hills, who invest to improve average- and low-yield fields and farming facilities, who introduce advanced modern cultivating technology and new quality seeds shall be offered the preferential treatment of the exemption of site use fee for ten years ( including period of construction); after 10 years, land use fee shall be collected at the preferential price of farming land. Article 16. A foreign wholly-own enterprise with its total investment over USD 10 million, which is put into production within two years or within the first two years whose sale income goes over RMB 10 million yuan, shall be exempted from site use fee during the whole operative period. IV. Efficient Approval Service Article 17. For foreign investors who make investment in Xiaogan city, more preferential treatment of land use fees, local taxes and charges shall be executed within the right of the municipal authority. The treatment shall be offered according to certain projects which will bring out big interests and whose products have ready market at home and abroad. With the principle of providing conveniences to foreign investors, the municipal authority shall execute "one pen approval and one package service" management and service system. Article 18. Xiaogan municipal government is authorized to approve foreign-invested projects with total investment less than USD 30 million. Article 19. Upon receipt of a complete valid documents, the examination and approval authority shall decide whether to approve or disapprove the project within two days. For that project which has passed examination, the authority shall approve it within five workdays with service free of charge. V Incentive Premium for Introducing Foreign Investment Article 20 Those who have introduced funds for the use of productive project, infrastructure construction or social facilities project will be awarded one-time incentive premium about 5% of the total amount of funds which needn't be paid back by the beneficiary; for funds with tenure of use of more than 2 years before being paid back, the premium about 3% of the total amount for interest-free funds, 2% for 10% interest rate and 1% for over 10% interest rate(except for those within the scope of official duty). Article 21. Those who introduce foreigners, overseas Chinese and compatriots from Hong Kong, Macao and Taiwan to run enterprises (joint-ventures, cooperative projects)in Xiaogan City shall be awarded the one-time premium amounting to 1-2% of the allocated foreign funds by the Chinese partner. Article 22. Those who introduce solely foreign-funded project will be awarded one-time incentive premium amounting to 0.3% of the foreign fund which is over USD 500,000 or 0.5% of USD 5 million by the Municipal Government of Xiaogan City. Article 23. To the direct introducers who contribute to the successful transference of scientific achievements and bring-in of new products and process, new-type materials, new technique so as to make their products marketable and profitable by creating more than 25% profits, will be awarded by the Municipal Government of Xiaogan City for one time premium of RMB 10,000 to 50,000 yuan, in addition to the transference cost in accordance with the relative stipulations. Article 24. Those ex-city managerial and technical personnel who have made great contributions in creating profit and efficiency will be awarded one-time premium at the rate of 10% of the profits after taxation of that year's. Article 25. The units, departments or individuals of all walks of lifeare encouraged to sell, transfer or rent land to build foreign- invested enterprise, after finishing the legal formalities, the land administrative authorities shall collect charges at 3% of the total sales of land use fee; 4% of the rest shall be treated as premium funds, 3% of which shall be awarded to the unit and 1% to the direct introducor. Article 26. In order to encourage more foreigners to introduce investors and run enterprises in Xiaogan, the above stipulations are also applied to all "foreign-funded enterprises" within the city and traders both at home and abroad. VI. Supplementary Article 27. In order to enlarge the flexibility of the preferential policy, and within the limits of the municipal authority, more preferential treatment with landing fee, taxation and other aspects will be offered to those projects with good market prospects and economic benefit. Article 28. Domestic investors including state-owned enterprises or facilities units, private-owned enterprises, non- officially operated enterprises and other economic organizations who make invest in Xiaogan Main Foreign Affairs Administrative Institutions& Service Agencies of Xiaogan City I. Office of Xiaogan Municipal Administrative Committee of Utilizing Foreign Investment Xiaogan Municipal Administrative Committee of Utilizing Foreign Investment and its Office are the official coordinating organizations empowered by Xiaogan Municipal Government to deal with the official affairs concerning utilizing foreign investment, to comprehensively undertake the important relationship coordination and macro-control of issues about foreign investment utilization in Xiaogan, to perform supervision on policy implementing, and to be in charge of administrative management of foreign invested enterprises and mediating accusations of foreign investors. Office of Xiaogan Municipal Administrative committee of Utilizing Foreign Investment is in charge of the following: 1. To study and draft the policies and regulations of Xiaogan city's utilizing foreign investment. 2. To check the long-term and annual plans of Xiaogan city utilizing foreign investment; to breakdown the target quota and supervise its implementation; to make statistic of various information on introducing foreign investment of the whole city; to examine annually the important project of soliciting foreign investment; to build "Projects database", "Resources database". 3. To coordinate and organize the important activities for soliciting foreign investment. 4. To take the responsibility for coordinating the relevant department which has the right to examine and approve foreign-invested project according to proper policies and regulations. 5. To coordinate and deal with the severe affairs concerning utilizing foreign investment; to supervise and inspect the responsibilities and duties of the subordinate county, city governments and other relevant departments. 6. To accept foreign investor's consultation about investment in Xiaogan city, meanwhile, on behalf of foreign traders or businessmen, to help prepare the documents or go through all procedures required by establishing foreign-invested projects. Office of Xiaogan Municipal Administrative Committee of Utilizing Foreign Investment has set up a Centre of Accusation of Foreign Investment (Telephone No. 0712-2832556). Once proved the problems true, the responsible person and unit to voilet the legal interests of enterprise will be severely punished. II. Xiaogan Municipal Service Center of Foreign Investment ( Service Centre) Service Centre is a special organization providing service for foreign investment, its main responsibilities as follows: providing consultation and service for foreign-invested enterprise's establishment, production management; introduce partners for investors at home and abroad, help draft project proposals, feasibility study report, contracts, regulations and handle approving procedures; providing inquiry information on import & export of machinery and electronic equipment and office facilities, and help go through customs procedures for import and export. III. Xiaogan City New Industry Development Zone Xiaogan City New Industry Development Zone was approved to be established as a provincial-level one by Hubei Provincial People's Government in December 1989. The planned area of the zone is 33 km2, of which 9.5 km2 is planned to develop recently. Occupying a large plain land, the zone is favourable in geographic position and convenient for transportation. The infrastructure of water-supply, power-supply, telecommunication, roads are well-built and other service accommodations are to be provided with conveniently. The zone adopts preferential polices such as "lowering charges & fees, deducting tax & yielding profits and providing qualified service". The Administrative Committee of the zone is in charge of the management of its administrative affairs. The committee sincerely provide investors with "one package service" for approval of projects to be established and coordination concerning project construction so as to creat a good and loose investing environment. In recent ten years, Xiaogan city New Industry Development Zone have established various enterprises up to 80 in number by means of soliciting trader and introducing investment, with total investment of RMB 3 billion yuan, of which, foreign investment utilization of USD 220 million. There have been settled numbers of international famous companies in the Zone such as French Renault Auto Co. Ltd., German Simens Company, American UTA-Xianfeng Auto Electries Co., Ltd. . The profits created by newly high-tech products account for 60% of the total production. The automobile industry has been preliminarily built into a mainbody which supported by machinery, electronics, optics and building materials industries. The economy frame has also been formed by combining high-tech, high benefit, high efficiency and foreign capital, foreign economy and foreign trade. Xiaogan City New Industry Development Zone will enter the group of State-level development zones.
		Liaison: Liu Chengqing, Liu Hong Organization: Office of Administrative Committee of Utilizing Foreign Investmentof Xiaogan City Address: No.26 Chengzhan Rd. Xiaogan City, Hubei Province Post Code: 432100 Tel: 86-712-2823714 Fax: 86-712-2824209 E-Mail: xgwzglbg@xg-mail.hb.cninfo.net xgwzgl@public.xg.hb.cn GO TOP