Preferential Policies of Yunfu

To attract investment, Yunfu has implemented corresponding measures to encourage funds. These measures are applicable to profit-oriented projects invested in Yunfu, which has completed municipal tax registration and pay taxes at their municipal location, and which has invested fixed assets. Projects managed by municipal finance (or state-owned enterprises) do not apply to the following preferential policies.

Reward amount is proportional to investment in fixed asset that has been brought in: 1% of actual invested amount will be rewarded to profit-oriented projects with investment in fixed assets of RMB 5 million and above. Those projects should be completed and put into operation within the contract period. In case the investment is done in a staged manner, the reward can be given step by step until the total contracted amount has been in place (the first investment should be no less than RMB 2.5 million). Capitals invested beyond the contract period do not fall within the reward scope. For capitals that are not contracted, a supplemented investment contract should be made and the capitals are deemed to be applicable to the reward policies. Capitals increased to expand production do not fall within the reward scope. Foreign Trade & Economic Cooperation of Yunfu Municipal examines primarily the application documents, and then forwards them to the responsible team at the Municipal government for examination and endorsement. The reward is given to person(s) bringing the funds, and is subject to personal income tax. The application for reward should be handed in within two years from the day on which the project starts production or is officially put into operation. Otherwise, it will be regarded as automatic renouncement of the reward.

Preferential policies for encouraging investment in Xinxing

This applies to enterprises with investment over 2 millions in Xinxing. Firstly, investors will be provided with good service. Secondly, investors will be offered with preferential land price so as to secure their legal land-use right. For land using right obtained through investment, and for compensation of land transfer within industrial park and development zones planned by county and town, the price for 1 mu should not exceed: RMB 30,000 for county-land, RMB 10,000 for county-level mountainous land, RMB 20,000 for town-land, and RMB 5,000 for town-level mountainous land. The land-use right reaches as long as 70 years. After obtaining the land-use right, enterprises are entitled to transfer (paid) or mortgage. However, if the land is left unused for over two years, the county government is enlisted to take back the land-use right without compensation. In addition, investors are also entitled to preferential water and electricity price: RMB 1.2/ m3 for water and RMB 0.66 /kwh for electricity.

Preferential policies for encouraging investment in Luoding Industrial Zone

A. Preferential for establishing industry in the Industrial Zone

(1) Land use

Land for projects should be remised at local minimum cost that has been approved by the province. Land for extremely important projects can be remised based on agreement per related regulation.

The longest remising period accounts for 50 years. Once the period has been reached, land laws at the time should be implemented.

(2) Electricity

Installation fee is exempted for industrial electricity, and electricity price is based on standards approved by Provincial Price Bureau. For large industry, the price is RMB 0.6821/kwh, while basic price is RMB 9 /KAV monthly. For general industry, the price is RMB 0.8571/kwh.

(3) Water

Installation fee is exempted for industrial water, water price is based on standards approved by Provincial Price Bureau. Enterprises or industrial parks with high demand of water can establish their own water factory after being approved.

(4) Planning Fee

Ministry of Land and Resources: land measurement fee exempted while 60% of minimum standard charged for topographic engineering measurement.

Planning departments: planning and plan checking fee exempted, while 60% of minimum standard charged for city infrastructure and 50% of minimum standard for infrastructure setting out.

Construction departments: 50% of minimum standard charged for construction quality supervision, while 70% for construction quality inspection (within the scope of qualified operation)

Meteorological Department: 80% of minimum standard charged for inspection of lightning protection facilities.

Environmental protection department: 50% of minimum standard charged for environment supervision.

House Property Department: RMB 3/m2 charged for real estate dealing, while RMB 100/case for house map.

Public Utility Department: fee of temporarily occupying urban roads exempted, and RMB 5/person charged for environmental health service annually.

Labor Department: within the city’ duties and responsibilities, labor contract visa fees are exempted, deployment fee of employing mobile personnel and employment service fee, license evaluation fee of enterprise are RMB 50/company.

Health Department: disease prevention and control fee as well as health inspection and technology service fee exempted for two years, and health inspection fee for food companies exempted.

(5) Tax

Newly established manufacturing FIEs (not including projects in oil, natural gas, rare metals, and valuable metals etc.), which are to be in operation of over 10 years, are entitled to income tax exemption of 1 to 2 years starting from the profit-making year, as well as 50% reduction of income tax in the 3rd to 5th starting from the profit-making year.

Product exporting foreign enterprises is entitled to 50% reduction of income tax after the above periods of tax exemption and reduction (Point 1), if they have achieved over 70% of export output value in the same year.

FIEs in advanced technology enjoy 50% reduction of income tax three years after the above periods of tax exemption and reduction (Point 1).

Real estate tax is exempted for houses bought and built by FIEs for a period of three years after purchasing or construction completing date.

Exports from FIEs in general trade and imported materials processing are subject to the policy of “exemption, mortgage, and refund”.

On purchasing equipments made in China with the amount of not exceeding the total investment, or on purchasing equipments made in China for the purpose of reconstructing existing equipments or manufacturing techniques, FIEs are entitled to 40% refund that is taken from the income tax balance of the year of purchase and the one before.

Foreign investors are entitled to 40% refund of income tax, if they re-invest gained profits into the enterprise, increasing registered capital, or establishing other FIEs, which has an operation period of over 5 years. The investors get refund if they apply for it and get approval from the tax administration.

The base of personal income tax for foreign staffs is their salary minus 4800.

(6) Financial support
Within two years starting from official operation, 50% of VAT remains locally to support the development of the enterprise.

B. Preferential policies for property investment in industrial zones.

Property investors can gain land using right by transfer or rental etc. Also, they can build property together with rural collective organizations that have become shareholders with their land-using rights converted into shares.

Property investors are entitled to equal preferential policies as companies in the industrial zones in terms of electricity, water, land, planning fees and so on.

After 5 years starting from property being put into use, 80% of RET and rental income remains locally to support the development of the enterprise.

Preferential policies for encouraging foreign investments in Yun’An County

For projects encouraged in “Guidance for Foreign Invested Industries” while not listed in “Catalogue of Imported Goods for Foreign Invested Projects excluded from Duty-free Treatment”, equipment imported for project use is exempted from customs duty and import-linked VAT. For equipments that have been imported by foreign invested companies, and produce products wholly to be exported under investing projects permitted for domestic and foreign companies, customs duty and import-linked VAT that have already been paid will be refunded through 5-year installments.he enterprise.

Manufacturing FIEs with an operation period of over 10 years are entitled to income tax exemption of 2 years starting from the profit-making year, as well as 50% reduction of income tax in the 3rd to 5th year starting from the profit-making year. During the above tax exemption and reduction periods, local income tax is exempted. Annual loss of FIE branches in manufacturing and merchandising can be compensated with tax income of the following year until the fifth.

The income tax rate for manufacturing FIEs is 24%. With approval from the State Administration of Tax, the following FIE projects are entitled to a 15% tax rate:

a. Technology-intensive, knowledge-intensive projects;

b. Projects with foreign investment of over USD 30 million and a long payback period;

c. Projects in energy, transportation, and port construction.

Foreign investors of FIEs are entitled to 40% refund of income tax, if they re-invest gained profits into the enterprise, increasing registered capital, or establishing other FIEs, which has an operation period of over 5 years. The investors get refund if they apply for it and get approval from the tax administration.

FIEs approved as “Foreign enterprises oriented in product export” are entitled to 50% reduction of income tax after the above periods of tax exemption and reduction (Point 2), if they have achieved over 70% of export output value in the same year.

Preferential policies for industrial land using: (1) Preferential tax policies. Land requisition tax, plantation using tax, tax for additional construction with compensation, and forest tax can be wholly returned to investors. For lands already developed, the transferring price equals the development cost. (2) Preferential prices for actual land use are applicable to industrial projects with an actual investment in fixed asset of over RMB 50 million and high-tech industrial projects on national and provincial levels: for projects with an investment below 100 millions, the max. price for mountain land is 12000yuan/mu, for plantation 14000yuan/mu, and for developed land 60yuan/mu. For projects with an investment between 100~500 millions or provincial high-tech projects, the max. price for mountain is 40yuan/m2. Projects of over 500 million investment, national high-tech projects, and projects of great contribution to the local (with an extremely large tax sum) are entitled to particular preferential policies.

Various preferential policies on planning charges: (1) New enterprises will be supported in completing water and power use procedures; water and power prices are set according to relevant regulations. (2) Planning charges, the reduction of which county governments are authorized with, can be reduced consecutively for five years starting from the date of the enterprises’ obtaining business license.

Preferential policies for encouraging foreign investment in Yu’nan County

This applies to newly established enterprises in Yu’nan administrative region with fixed asset investment of RMB 3 million and above, invested by foreign investors, including individuals, legal entities and other economic organizations from joint-ventures, cooperative-ventures, foreign companies, and from outside of the county. The investors not only enjoy preferential policies of the state, province, city and mountainous regions, but also the following policies.

New manufacturing enterprises enjoy a refund of 20% of annual amount of new tax (VAT) from the county finance administration for five years beginning when production starts. New third-industry enterprises, such as hotels, shopping malls, transport, tourism, logistics, etc., enjoy a refund of 20% of annual turnover from the county finance administration for five years beginning when production starts. In addition, Local Income Tax (LIT) is exempted for enterprises invested by foreign investors (including those from Hong Kong, Macau, Taiwan, and other countries). Manufacturing enterprises with over 10 years of operation period are entitled to income tax exemption of 1 to 2 years starting from the profit-making year, as well as 50% reduction of income tax from the 3rd to 5th year starting from the profit-making year.

Foreign companies in agriculture, forestry, animal husbandry and those located in undeveloped areas enjoy preferential policies of paying 15%-30% VAT of original tax within 10 years after the above exemption and reduction periods upon approval from the taxation administration.

Product exporting foreign enterprises are entitled to 50% reduction of income tax after the above periods of tax exemption and reduction, if they have achieved over 70% of export output value in the same year. Foreign invested high-tech enterprises are entitled to 3.5 years of extended tax reduction after the above periods of tax exemption and reduction, if they are still qualified as high-tech enterprises, and have obtained approval from taxation administration.

Import VAT is exempted for goods imported under the trade mode of “processing with supplied materials”. VAT on processing, manufacturing consignment, and processing fee are exempted for exporting the above processed goods. Re-exported goods under “processing with imported materials” are entitled to the preferential policies of “exemption, mortgage, and refund”. Exemption and reduction policy apply to newly establish manufacturing companies. Administrative fees subject to local government and other functional departments can be reduced to 50% of the min. price set by price department, except for administrative fees and license cost that have been prescribed by national, provincial and municipal governments. Administrative fees that haven’t been approved must not be collected. Further more, the longest using period for industrial land is 50 years, after which the period can be extended. And during the land using period associated with the accomplished land-using procedure, companies are entitled to transfer, mortgage, and inherit the land.

According Article 3, new manufacturing companies with a registration capital of over 3 millions are entitled to preferential treatments on using land or renting factory area:

Preferential land-value applies to industrial land using. Generally speaking, the price shouldn’t exceed 100yuan/ m2, and is negotiable.

If new land area is needed for projects, county government should assist in land requisition. The requisition fee falls on the investors, and investors are entitled to a 50% discount of the min. standard for fees subject to the county, excluding those subject to nation, province, city and compensation for farmers.

For idle factory area rent by investors, the rent is not to exceed 2yuan/ m2 per month within three years starting from production begin, and is negotiable.

Application for cable installation and related procedures will be completed on the date of approval, free of auxiliary fees. When the county general industrial electricity price is 0.82yuan/KWH, large industries or those set up in designated area are entitled to 10 years’ preferential policies on electricity starting from production begin: 1. Electricity is priced at 0.57yuan/KWH for companies with an annual electricity consumption below 12 million KW; 2. Electricity is priced at 0.53yuan/KWH for companies with an annual electricity consumption of 12-14 million KW; 3. Electricity is priced at 0.49yuan/KWH for companies with an annual electricity consumption of 24-60 million KW; 4. Electricity is priced at 0.45yuan/KWH for companies with an annual electricity consumption above 60 million KW. According to Article 13, companies are entitled to take precedence in water installation application, and to enjoy free capacity-added fee. The industrial water price is 0.98yuan/m3 for companies set up in appointed area for 5 years starting from actual production begin.

Preferential policies for investing in Xinxing County

Foreign invested projects, which are encouraged by industrial investment policies of Xinxing, are entitled to refund of 50% VAT that is subjected to local administration, within three years from production begin.

FIEs, which falls under local investment encouraging policies and have an operation period of over 10 years, are entitled to income tax exemption of 2 years starting from the profit-making year, as well as 50% reduction of income tax in the 3rd to 5th year starting from the profit-making year. During the above periods, local Income Tax and City and city maintenance construction tax are also exempted. Foreign invested projects in energy, transport, harbour and other infrastructure with an operation period of over 15 years are entitled to pay only 15% of Corporate Income Tax(CIT), and CIT is exempted from the 1st to 5th year starting from the profit making year. Xinxing encourages foreign companies to invest capital and share stock in local enterprises or acquire them. Those, who acquire over 50% stock from either national or collective enterprises, are exempted from land changing management fees and real estate transaction fees. The local financial administration returns 50% deed taxation after levying.

Foreign companies, who rent existing factory areas to build new factory, are exempted from infrastructure construction fee after paying the rent.

Regarding land used by the foreign companies in the fields of energy, highway, port and other infrastructure construction or public projects, 30% levying is applicable to local standard fee on their municipal construction, infrastructure supporting fees, and land transfer levy; and 50% levying for projects in manufacturing and tourism. 30%-40% of VAT levying and exempted land using fee is applicable to developing national barren hills, wasteland for value added on transfer of land use right.

For goods re-exported under “processing with supplied materials” and their processing costs, VAT and consumption tax are exempted. Fixed asset investment regulation tax is exempted for construction of factory area and associated daily life infrastructure, which are for companies under processing of raw materials and assembling of parts supplied by foreign buyers and compensatory trade, and are built by foreign investors.