Investment Policies |
| (1) The businessmen who invest in Lianyungang may enjoy preferential polices as following A. Manufacturing enterprises opened by foreign investment in Lianyungang will be entitled to be reduced with taxation at 24% corporate income tax. The enterprises with foreign investment scheduled to operate for period of 10 years or more may be exempted from income tax in the first and second profit-making years and allowed a 50% reduction in the third to fifth year. At the same time, they may be exempted from local income tax. B. Projects engaged in infrastructure structure constructions of energy, resources and harbors will be entitled to pay business income tax at a rate of 15%. Those with over 15 years of operation will be exempted from business income tax in the first to the fifth year from the first year they gain profit and at a reduction of a half of its year’s income tax from the sixth to the tenth year. C. After the period of exemption and deduction of enterprise income tax in accordance with the above provisions expires, export enterprises that exported 70% or more of their products value that year can still be allowed a 50% reduction for enterprise income tax and be exempted from local income tax. Technologically advanced enterprises may continue to pay income tax at a rate reduced by one half during the next three years. D. Loss incurred in enterprises with foreign investment in a tax year may be carried over to the next tax year and made up with a matching amount drawn from the year’s income. Should the income in the subsequent tax year be insufficient to make up for the said loss, the balance may be made up with further deduction from income year by year over a period not exceeding five years. E. Foreign investors of enterprises with foreign investment, who directly reinvest their profits obtained from the enterprises back to the enterprises, or increase the registered capital or utilize the profit to establish other enterprises in China with a term of operation of no less than five years, can obtain a refund of 40% of the income tax already paid for the amount of the reinvestment. Foreign investors who reinvest the profits obtained from the enterprises to establish new export enterprises or technologically advanced enterprises for a period of no less than five years can get a full refund of enterprise income tax already paid for the amount of reinvestment. F. For projects in accordance with the “Catalogue of Industries in which Overseas Investment is encouraged”, the self-used equipment imported within investment volume will enjoy the preferential tax treatment according to the state laws and regulations. G. For projects of over 5 million USD investment with high technology or production projects invested in by transnational corporations, the land use fee and other fees shall be treated by the policy of “Special preferential policies for individual projects. (2) The preferential policies provided by Lianyungang Economic and Technological Development Zone A. Income tax: Manufacturing enterprises opened by foreign investment in Lianyungang Economic and Technical Development Zone will be entitled to reduce taxation at 15% business income tax. They may be exempted from the income tax in the first and second profit-making years and be allowed a 50% reduction in the third to tenth years. B. Value Added tax: The enterprises, which paid value added tax less than 3 million RMB yearly, can obtain a return of 8% of the value added tax paid that year. The enterprises, which paid value added tax between 3 million to 5 million RBM yearly, can obtain a refund of 10% of the value added tax paid that year. C. Business tax: Every year the enterprises can obtain a refund of business tax paid that year. Newly built enterprises or newly bought production sites may be exempted from the property tax in the first five years. The hi-tech enterprises entering the hatching development center of the zone may be exempted from paying rent in the first year, then pay 40% of the normal rental in the second year and 80% of it in the third year for its office and experiment use. D. The policy of the science & technology fund was established by the administration commission in order to speed up the development of the Zone, and to support the hi-tech. Enterprises (including privately owned enterprises). The quantity of the fund given to any one company will be according to enterprise’s investment scale, techniques, economic effects and contribution to the state. The details of the fund acts are as follows: ① The enterprises registered in the Zone can apply for the fund equal to 1.5%--2.5% of their annual business income. ② Manufacturing enterprises opened by foreign investment in the Zone may be exempted from income tax in the first and second profit-making years and will be allowed a 50% reduction in the third to fifth year and can apply for the fund equal to 5%--7.5% of the total amount of profits from the sixth year. ③ The enterprises in the Private Economic Zone may apply for the fund equal to 33% of total profit from the first and second profit-making years and 16.5% of total profit from the third year. ④ Other enterprises can apply for the fund of 16.5% of total profit. ⑤ The enterprises with total sales below 1 million (the technology enterprises excepted) may not benefit from this policy. ⑥ The policy may be adjusted if the national policy is adjusted. (3). The policies for Lianyungang Export Processing Zone A. The enterprises in the Zone can benefit from all favorable policies enjoyed by the National Economic and Technical Development Zone. B. The enterprises in the Zone may be exempted from value-added tax and consumption tax for the processing and production of goods and services in the Zone. C. Customs may practice direct and transit supervision and control over import and export goods not carrying out the system of processing trade security deposit. D. Not to practice the systems of the import and export quota and the certificate for goods in the Zone or transporting in and out of the Zone generally. E. The machinery and equipments, construction materials and office equipment etc. imported for the enterprise’s production use may be exempted from customs duty while the raw materials, spare parts and elements for processing export products are overall customs bond. F. The enterprises in the Zone may benefit from the policy of refund of duty over-collected for the products made in China, such as machines, equipment, raw materials, spares, elements and construction supplies materials. G. To carry out overall customs bond for raw materials, spare parts and elements spending out of the Zone by the enterprises inside and returning back in half a year. (4). Preferential policies of important development zones Lianyungang Hi-tech. Development Zone, Lianyungang Ocean Economic Development Zone and travel resorts approved by either the province or the municipal government all have drawn up special favorable policies and service measures. ① A project invested by businessman does not need the application of establishment, but the feasibility study and draft which should be approved by foreign and commercial department. ② Projects with a total investment of above 30 million USD, or of limited type investments, or special scope investments must carry out the relevant procedures. ③ To apply for and receive the business license within 30 days of receiving the approval certificate. ④ The relevant registration should be completed within 30 days of receiving the business license.
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