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This
PEOPLE'S REPUBLIC OF
which
Council of
In case of discrepancy, theoriginal version in Chinese shall prevail.
PROVISIONS OF THE STATE COUNCILFOR THE ENCOURAGEMENT
(Promulgated on October 11,1986)
These Provisions
environment, facilitate theabsorption of
advanced technology, upgradeproduct quality, expand exports in order to
generate foreign exchange anddevelop the national economy.
The State encourages foreigncompanies,
organizations
investors") to establishChinese-foreign equity joint ventures, Chinese-
foreign
(hereinafter referred to as"enterprises with foreign investment") within
The State grantsspecial
(1) Production enterprises whoseproducts are
have a foreign exchange surplusafter deducting from
foreign
incurred in production andoperation and the foreign exchange needed for
the
(hereinafter referred to as"product-for-export enterprises").
(2) Productionenterprises
foreign investorswhich
upgrading and replacing productsin order
generated by exports or forimport substitution (hereinafter referred to
as "technologically advancedenterprises").
Product-for-export enterprisesand technologically
shall be exempt from payment ofall subsidies to be granted by the State
to staff and workers, except forthe payment of or allocation of funds for
labour insurance, welfare costsand housing subsidies
and workers in accordance withthe provisions of the state.
The site use fees forproduct-for-export enterprises and technologically
advanced enterprises, except forthose located in busy
large cities, shall be computedand charged
(1) five to twenty RMB yuan persquare metre per year in areas where the
development fee and the site usefee are computed and charged together;
(2) not more than three RMB yuanper square metre per year in site areas
where the development fee iscomputed and charged on a one-time basis or
areas which are developed by theabove-mentioned enterprises themselves.
Exemptions for specified periodsof time from the
foregoing provision may begranted at the
Product-for-export enterprisesand technologically
shall be given priority inobtaining water, electricity and transportation
services, and communicationfacilities needed
operation. Fees shall becomputed
standards for local stateenterprises.
Product-for-export enterprisesand technologically
after examination bythe Bank
receiving loans for short termrevolving funds needed for production and
distribution, as well as forother needed credit.
When
technologically advancedenterprises remit abroad profits realized by them
from such enterprises, theamount remitted shall
After the expiration of theperiod
enterprise income tax inaccordance with
product-for-export enterpriseswhose value of export products in that year
amounts to 70 per cent or moreof the value of
year, may pay enterprise incometax at a rate reduced by one half of the
Product-for-export enterprisesin the special economic zones and in
economic and technologicaldevelopment zones and other product-for-export
enterprises that already payenterprise income tax at a tax rate of 15 per
cent and that comply with theforegoing
income tax at a reduced rate of10 per cent.
After the expiration of theperiod of reduction or exemption of enterprise
income tax in accordance withthe provisions of the state, technologically
advanced enterprises may extendfor three years the payment of enterprise
income tax at a rate reduced byone half.
Foreign
enterprises in order toestablish or expand product-for-export enterprises
or technologically advancedenterprises for a period of operation of
less than fiveyears,
authorities, shall be refundedthe total amount of enterprise income tax
already paid on the reinvestedportion. If
before
enterprise income tax refundedshall be repaid.
Export products of enterpriseswith foreign investment, except crude oil,
finished oil and other productssubject to special state provisions, shall
be exempt from the consolidatedindustrial and commercial tax.
Enterprises withforeign
products
accordance with stateprovisions. For
license, in accordance with theannual export plan of the enterprises, an
application for export licensesshall be made every six months.
Machinery and equipment,vehicles used in production, raw materials, fuel,
bulk parts, spare parts, machinecomponent parts and
imports
investment need to import inorder to carry out their export contracts do
not require further applicationsfor examination
exempt from
exercise supervision andcontrol,
imports on the basis ofthe enterprise
The imported materials and itemsmentioned above are restricted to use by
the enterprise itself and maynot be sold on the home market. If they are
used as products to be soldon the
shall be gone through inaccordance with relevant provisions and
shall be paid according torelevant regulations.
Under
enterprises with foreigninvestment
exchange surpluses anddeficiencies among themselves.
The Bank of China and otherbanks designated by the People's Bank of China
may provide cash securityservices and may
enterprises with foreigninvestment.
The people's governments atvarious levels
charge shall guarantee the rightof autonomy of enterprises with foreign
investment and
managing themselves inaccordance with internationally advanced scientific
Within the scope of theirapproved
investment have the right todraw up, of their own accord, production and
operation plans, to raise funds,to use
materials and to sell products;and to determine by
levels, the forms of wages andthe bonus and allowance system. Enterprises
with foreign investmentmay, in
operation
structure and
personnel, increase or dismissstaff and workers.
employ technical personnel,managerial
locality. The units to which such employed personnel
the employment and permit thetransfer. Staff and workers who violate the
rules and regulations, andthereby cause certain bad consequences may, in
accordance with the seriousnessof the case, be given
up to
recruit, employ, dismiss ordischarge staff
report with the local labour andpersonnel department for the record.
All regions and departments mustimplement
Council Concerning FirmlyCurbing the Indiscriminate Levy of Charges
Enterprises". Thepeople's
formulate specific measures andstrengthen supervision and administration
Enterprises with foreigninvestment may
apportioned charges if suchcases occur and may also appeal to the local
economic committees up to theState Economic Commission.
The people's governments atvarious levels
charge
efficiency in handling mattersand shall
matters reported by
response and resolution. For theagreements,
association of enterprises withforeign
approved by the
relevant examination andapproval authorities must, within three
from the date of receipt of alldocuments, decide to
Product-for-export enterprisesand technologically
mentioned in these Provisionsshall be confirmed as such by the
economic relations
located in conjunction with theother relevant departments in accordance
with the enterprise contract,and certificates of
If the actualresults
enterprise are unable to hitthe target
exchange balance as set in theenterprise contract,
which have already been reducedor exempted in the previous year shall be
These
applicable to product-for-exportenterprises, shall be applicable to all
enterprises with foreigninvestment.
date of entry into effect, tothose enterprises
that obtained approval forestablishment before the date of
effect of these Provisions andthat qualify for the preferential terms of
For enterprises established withinvestment by companies, enterprises and
other economic organizationor individuals
Taiwan, matters shall be handledby reference to these Provisions.
The Ministry of Foreign EconomicRelations and Trade shall be responsible
for interpreting theseProvisions.
These Provisions shall enterinto effect as of the date of promulgation.
[*1] New provisions have beenformulated with regard to this Article which
shall thus be implemented inaccordance with the
Concerning Further Confirmingthe Autonomy
Investment in
Ministry of Labour and Personneland transmitted by the General Office of