Posts Tagged ‘Benefits’

Preferential Tax polices Related to Tax (local tax) of Foreign-funded Enterprises 2005-08-26

　　I． According to the provisions of tax documents (1999) No. 273 and (2001) No.36, the technology transfer income of foreign-funded enterprise and foreigner to domestic enterprise, audited by related taxation department, in accordance with provisions (that are in the documents of audit opinions of science and technology committee of provincial level or the technology transfer contracts, agreements and authorized documents provided by foreign economic and trade committee), after examination and approval of national tax bureau, is exempt of business tax.
　　II． According to provisions of the National Development Documents (1998) No. 10 and National Tax Development Documents (1999) No. 43, if the enterprise employs laid-off workers account for 30% or above of its total employee, after auditing of related taxation department, the business tax will be reduced 30% for three years; if the enterprise employs laid-off workers account for 60% or above of its total employee, after auditing of related department, the business tax will be reduced 50% for three years.

　　III． According to the provisions of National Taxation documents (1994) No. 038, the foreign-funded enterprise and foreign enterprise will not pay city maintenance construction fee and the extra education fee.
　　IV． According to the provisions of documents promulgated by State Council Office (2001) No. 73:

　　　a) For the foreign-funded enterprise located in western area and belonging to those state encouraging enterprises, from 2001 to 2010, after audited by related taxation department, the corporate income tax is levied on the rate 15%.
　　　b) For foreign invested enterprises, which are funded since 2001 and with the operation period above 10 years, covering the areas of communication, power supply, post service and broadcasting, the corporate income tax shall be exempted for the first 2 years and to be levied at half of the rate for another 3 years.

　　　c) For those husbandry incomes resulted from the programs of protecting ecological environment and convert farmland into forest and grassland, the husbandry tax is exempt for 10 years since it has gained profit.
　　　d) For the land occupation because of the construction of national and provincial road, compared with land occupation of railroad and airport construction, farmland occupation tax is exempted.

Provisions of Incentive Policies of Chongqing for Encouraging Foreign Investment 2005-08-26

Chapter 1 Sectors Available for Investment

Article 1
Foreign Merchants (Foreign merchants as referred to hereinafter are inclusive of merchants of Hong Kong, Macao and Taiwan) and their invested enterprises in China are free to make any investments or to have any operations in this City without restrictions on sector, proportion of investment, forms of investment, category of trades and term of running, unless other wise stipulated by the state. Foreign merchants are encouraged to invest in the City’s infrastructure and resource exploration projects covering areas of agriculture, water conservancy, ecology, communication, energy, public works, environment protection, minerals, tourism, traditional enterprise renovation, high & new technology-oriented industries, as well as establishment of R & D centers.
Chapter 2 Examinations and Approvals
Article 2
For a wholly foreign owned project or a joint venture project between foreign merchants and domestic non-state owned enterprise with an investment volume of less than US$30 million, and if such a project is enlisted in the Encouraged Project, and which does not require the general considerations of the state and does not cause pollutions, the feasibility study of such a project shall be subjected to a system of “filing up for record.” For a same project with the above conditions but with a volume of over US$30 million, its feasibility study and project proposal shall be submitted together for examinations and approvals.
For a project with an investment volume of over US$30 million, which does not require the general considerations of the state and is covered by the Encouraged Project in A Guided Catalogue of Sectors for Foreign Investment or covered by the Advantageous Project in Mid & West China for Foreign Investment, its Joint Venture Contract and the Articles of Association shall be for the approval of Chongqing Foreign trade & Economic Relations Commission, to be documented in Ministry of Foreign Trade & Economic Co-operation.
Chapter 3 SAIC (Business) Registration

Article 3
The forms of investment covering project which is listed in the Encouraged Project can be decided by foreign merchants on their own. Foreign merchants can also at same time operate enterprises or services associated with the above projects according to the state’s applicable regulations.
Article 4
Support shall be extended to the interchange and restructuring of foreign and domestic assets, such interchange and restructuring shall be treated as an amendment registration, opening registration shall not be charged.
Article 5
A key project or the one with a registered capital of above US$2.00 million is allowed to be named after the common names of the business it is dealing in. Foreign merchants upon taking over a domestic enterprise may feel free to apply for a new name or use the original name of the enterprise, which is taken over.
Article 6
In the event of foreign merchants investing in an domestic enterprise in manners of contracting, leasing and share participation, or in the event of a foreign invested enterprise re-investing in a domestic enterprise, the receiving enterprise, if the foreign capital reaches 25% can be treated as a foreign invested enterprise and shall enjoy the preferential policies applied to normal foreign invested enterprises.
Chapter 4 Taxation
Article 7
The corporate income tax of a foreign invested enterprise of production nature shall be levied at 24%, which is a reduced rate. For those which have an operation term of over 10 years, the corporate income tax shall be exempted for the first and the second year starting from the first profitable year whilst the corporate income tax of the 3rd, 4th and 5th year shall be levied at half of the rate.
The foreign enterprises covered by the Encouraged Project and the Grade 2 Restrictive Project as listed in A Guided Catalogue of Sectors for Foreign Investment, or those that are approved by the state for purpose of advantageous projects may enjoy a corporate income tax of 15% for three years following the expiration of the existing preferential policies.
For those foreign invested enterprises of production nature involving intensive technology and intelligence, those involving an investment of over US$30 million and with a long return period and those covering energy, communication and port construction, corporate income tax shall be levied at 15% subject to the final approval of the State Taxation Bureau.
The corporate income tax of foreign invested enterprises of production nature inside Chongqing Economic & Technological Development Zone and New Towns of North Chongqing shall be levied at 15%, which is a reduced rate.
The corporate income tax of foreign invested enterprises inside Chongqing High & New Tech Industrial Development Zone, if regarded as high & new tech enterprises shall be levied at 15%, which is a reduced rate. The corporate income tax of those with an operation term of over 10 years shall be exempted for the first two years starting from the first profitable year, subject to the approval of local taxation authority.
If an enterprise with advanced technology still remains to be an advanced enterprise after the expiration of applicable preferential tax treatment it has enjoyed, its corporate income tax can be levied at half of the rate for another three years according to taxation law. In the event of the corporate income tax, which is reduced at half of the rate being under 10%, a 10% rate shall be levied.
Article 8
Upon expiration of the preferential tax treatment by the state, an export-oriented foreign invested enterprise in the event of its export volume reaching above 70% of its total output in a year may enjoy a corporate income rate at 10% for the same year.
Article 9
For foreign invested enterprises covering the areas of communication, power supply, post service and broadcasting, the corporate income tax shall be exempted for the first 2 years and to be levied at half of the rate for another 3 years.
Article 10
In the event of a foreign merchants of financial institution transferring in or a branch receiving from its head office an amount of US$10 million, and with an operation term of over 10 years, its corporate income tax can be levied at 15%, that of first year can be exempted, and that of the second and the third year can be levied at half of the rate, starting from the first profitable year, subject to approval of taxation authorities.
Article 11
In the event of a foreign enterprise having no affiliates or operation premises in China but are receiving incomes out of shares, interests, rents, license and rest of earnings, corporate income tax shall be levied at 10%.
Article 12
In the event of foreign merchants re-investing its profit out of a foreign invested enterprise in the same enterprise to increase registered capital or investing in a new enterprise, and if such re-invested operations will have a term of 5 years or above, 40% of its paid income tax on its reinvestment part shall be returned. In case that its profit is re-invested in expanding an export-oriented enterprise or an enterprise with advanced technology, and if such re-invested operations will have a term of 5 years or above, all its paid income tax on its re-investment part shall be returned.
Article 13
In the event of a foreign invested enterprise utilizing badland for developing agricultural technological project and ecologic agriculture project, the agricultural tax shall be exempted for 5 years starting from the first earning year. For developing agricultural specialties, which are tax payable, such payable agricultural specialties tax shall be exempted for 10 years starting from the first earning year.
Article 14
For foreign invested enterprises engaged in agricultural development, the corporate income tax shall be levied at 15%-30% for 10 years following expiration of stipulated preferential tax rate, subject to the approval of taxation authorities.
Article 15
For a foreign invested enterprise engaged in exploiting an unused land whose right of use is not yet determined, the agricultural tax shall be exempted for 5 years, or the agriculture specialty tax shall be exempted for 10 years, starting from the first earning year.
Article 16
For foreign invested projects which are covered by advantageous industries as encouraged for foreign investment in mid and west China, import duties and import linkage tax may be exempted according to the State Council’s Adjusting Policy on Equipment Import (State Council 1997 No. 37) in case that an enterprises investing in such projects will import, within its budget of total investment or with its additional funds beyond the total investment equipment, associated technology, spares and accessories which are not manufactured in China or the technical figures of same manufactured in China can not meet the requirement.
Article 17
The local corporate income tax of a foreign invested enterprise with production nature shall be exempted whilst for a foreign invested enterprise with non-production nature but with an operation term of over 10 years the local corporate income tax shall be exempted for the first 2 years starting from the profitable year, to be followed by levying at half of the rate for the 3rd, 4th and 5th year.
Chapter 5 Land & Housing
Article 18
In the event of foreign merchants developing with high technology state-owned badland, bad mountains and bad beaches whose right of use is not yet determined for purpose of planting, forestry, husbandry, fishery and quality agricultural production, the right of use may be granted by way of auction and leasing for a term of use for 50 years maximum.
Article 19
In the event of a foreign invested enterprise being engaged in agricultural development, infrastructure construction including power station, airport, highway, bridge, port, dock water works (piping system excluded) water conservancy and environment protection, the lowest price of same land shall apply. If approved by municipal government, the 50% of the charges on land can be just recorded to be paid off within 6 years.
Article 20
Foreign invested enterprises engaged in building and operating high- class highway, port and dock shall enjoy priority in running real estate, service trade and road/river transport business along the highway and port as included by master plan of the city.
Article 21
In the event of foreign merchants establishing a production enterprise by way of joint venture and co-operative operations, and on condition that the legal entity of Chinese partners remains unchanged, the let-out fees of use of land can be used as a Chinese state share for pouring into the enterprises.
Article 22
In the event of a foreign invested enterprise being engaged in economical house and buildings, the same treatment to Chinese domestic enterprises shall apply.

Article 23
In the event of the ownership and the operation right of a Chinese enterprise being hired by an overseas legal entity and the Chinese legal entity being written off, the right of use of the allocated land shall be withdrawn by a government at county level or above, and the land will be let out or re-allocated for the use of the hiring enterprise according to the approval procedures of land use. The hiring party shall pay land-use fees or ground-use fees to the government according to relevant regulations.
If the hiring activity allows the existence of the legal entity of the Chinese enterprise or only the right of operation of Chinese enterprise is hired, apart from the above which will be applicable to the right of land-use, the Chinese enterprise can also rent the land to the hiring party subject to the approval of authorized land administration department, the ground fees shall be paid by the renting party (or an agreed party).

Article 24
In the event of foreign invested enterprises obtaining the right of land-use in this City by way of administrative allocation, the ground fees shall be charged at half of the rate. Among them, for those who engaged in agriculture, forestry, husbandry, fishery operations, science & technology, education, health causes, as well as infrastructure constructions including power station, airport, highway, bridge, port, dock, water works (piping system excluded), water conservancy and environment protection, ground fees shall be exempted.
Ground fees shall be free of charge in the event of a foreign invested enterprise using land temporarily within 6 months for geological examination and mineral exploration purposes.
Article 25
Ground/land use fees of foreign invested enterprises winning the Municipal Export Certificate or Advanced Technological Certificate shall be free of charge for 3 years starting from the date of approval of the ground/land use.
Article 26
Ground/land use fees of foreign invested enterprises in minority areas, the state and provincial poverty areas shall be free of charge.
Article 27
In the event of foreign merchants taking over and restructuring bankrupt enterprises or those which are in distress, charges on transfer registration upon re-registration of ownership of buildings and use of land shall be free.
Article 28
Foreign merchants (foreign enterprises and their representation offices in China) are encouraged to invest in non-oil/gas mineral resource explorations and exploitations according to Mineral Resource Law and A Guided Catalogue for Foreign Investment. Foreign merchants are allowed to undertake non-oil/gas mineral risk assessment in manners of wholly foreign owned operations or on co-operative basis with Chinese partners. A foreign invested enterprise engaged in geologic survey, upon finding mineral areas whose mining right have not been given yet or finding important information on source of mineral areas shall enjoy the priority in exploring such areas.

Article 29
Foreign merchants shall enjoy the priority in exploiting the minerals, which are explored by them, except for those, which are prohibited by law. Foreign merchants are allowed to use their advanced technology or equipment as share contributions to joint exploration and exploitation of non-oil/gas minerals. Foreign merchants are free to buy over the non-oil/gas mineral exploration or exploitation rights of Chinese large and mid size state-owned enterprises. A foreign invested enterprise is also free to sell its non-oil/gas mineral exploration and exploitation rights according to law.
Article 30
Foreign merchants are entitled to compete for mining right in manners of public bidding and auction according to A Guided Catalogue for Foreign Investment.
Article 31
Foreign invested enterprises engaged in mineral resource explorations and exploitations, whilst enjoying normal applicable incentive taxation and charges as granted by the state and local government shall enjoy following preferential treatment:-
(1) The fee of use of mining right shall be free of charge for 1 year and charged at half of the rate for 2 years in the event of non-oil/gas mineral explorations and exploitations.
(2) In the event of non-oil/gas minerals enlisted in the encouraged list of A Guided catalogue for Foreign Investment being exploited, the mineral resource compensation fee shall be free of charge for 5 years.
(3) In case of associated and accompanying minerals other than major non-oil/gas minerals being exploited, the mineral resource compensation fee of associated and accompanying minerals shall be charged at half of the rate.
(4) The mineral resource compensation fee shall be free of charge in case of tail minerals being exploited.
(5) Mineral resource compensation fee shall be charged at half of the rate for 3 years in case that an internationally advanced technology or equipment is utilized to have exploited minerals which can be hardly exploited by existing Chinese technology.
(6) In case that the exploitation recovery rate, mineral selection recovery rate and comprehensive utilization rate is made to be higher than originally designed level or the state standard by an effective technology introduced, the mineral resource compensation fee shall be charged at half of the rate for 3 years. Additionally the mineral resource compensation fee on excessive minerals exploited more than original design or state standard shall be free.
(7) In case that the mineral resource explorations and exploitations take place in the minority, the state and provincial poverty areas, the mining fee shall be free of charge for 5 years. Furthermore, the ground fees and the part of mining fee, which belongs to local government, shall be charged at half of the rate.
(8) Foreign invested enterprises suffered an annual loss due to force causes may be given a grace period to pay the mineral resource compensation fee for the year at a loss, the fee of use of mining right of the year at a loss can also be charged at less than 50% of the rate.
(9) The cost of geological examination and exploration which has actually identified minerals in a plotted area, which are available for exploitation can be taken as deferred assets from the first year when minerals are exploited, to be amortized in 5 years before tax, or to be amortized in 2 years before tax in the event of the mining license being valid for less than 10 years. Examination and exploration cost occurring during exploitation activities can be charged to cost of production.
(10) Depreciations of fixed assets can be accelerated during the actual exploitation stage, subject to the approval of taxation authority.
(11) In the event of a state financed mine being explored or exploited, the fee on mining right can be charged at 70% of the assessed amount, which can be also paid in installments.
Chapter 6 Foreign Exchange & Credit
Article 32
A foreign invested enterprise may open a foreign currency account in authorized banks or rest of financial institutions, subject to the approval of the State Administration of Foreign Exchange Chongqing Foreign Exchange Administration Department (hereinafter referred to as “CFEAD”).
Article 33
An overseas legal person or natural person for purpose of financing an intended foreign invested enterprise may, in the name of the overseas legal person or natural person and with a letter of intention for an investment and proof(s) of remittance apply to CFEAD for opening a temporary foreign currency account to deposit an early investment. This account may be used for an extended period of time in case of special need.
Article 34
In the event of foreign merchants transferring outward the profit, dividend or bonus of foreign invested enterprises and the salary or rest of the legal earnings of foreign, HK, Macao and Taiwan employees, they can just do it upon presentation of a resolution of the board, taxation proof(s) or rest of documentation from their foreign exchange account or designated banks.
Article 35
In case that a foreign invested enterprise uses its profit which is in RMB as verified by CFEAD to make a re-investment, such an investment shall be regarded as an investment in foreign currency. The rest of investment in PR China by foreign invested enterprises in RMB originating from account settling, share transfer and preceding return of investment shall also be regarded as an investment in foreign currency.
Article 36
All banks in this City shall extend to foreign invested enterprises crediting supports in the same way as extended to domestic enterprises in case that foreign invested enterprises should need working capital to enable export-oriented productions.
Article 37
A foreign invested enterprise may mortgage its foreign currency to Chinese banks for RMB loan, as well as to apply for an RMB loan with the guarantee of foreign banks.
Chapter 7 Import & Export
Article 38
A foreign invested enterprise manufacturing product for export may apply for establishing a bonded warehouse or plant, subject to the approval of Customs Head Office while establishment of bonded warehouse for spares and accessories can be approved by local Customs office.
Article 39
For commodity inspections of imported equipment which are carried out jointly by commodity inspection authority and the importing enterprises, commodity inspections of imported equipment associated with foreign invested resource exploitation, power station, airport, highway, bridge, port, dock, high-tech-oriented industries projects and commodity inspections of equipment imported by enterprises whose annual export volume takes up 50% of the total annual output, the commodity inspection fees shall be charged at 50% of the state stipulated rate. Based on this calculation, if a charge on a single case reaches RMB5, 000 yuan, then only 80% of the excessive amount shall be actually charged on the single item.
Article 40
For equipment imported within total investment of projects covered by Encouraged Project and the Grade 2 Restrictive Project as listed in A Guided Catalogue of Sectors for Foreign Investment, the Customs duty and the linkage VAT shall be exempted with the exception of the commodities enlisted in the List of Imports for Foreign Invested Projects Which Shall Not be Duty Free.
Article 41
Unvalued equipment to be imported as required by re-export-oriented processing shall be duty free, raw materials or accessories as required by producing export commodities shall be bonded by Customs.
A foreign invested enterprise shall export product manufactured by themselves as duty free.
Article 42
The exit & entry inspection and quarantine authority shall carry out evaluations of the assets imported by foreign invested enterprises within total investment promptly, efficiently and justly according to the relevant regulations. Evaluation charge on an amount of US$1.00 million to 5.00 million shall be at 2.5‰, evaluation charge on an amount of US$5.00 million to 10 million shall be at 2‰, evaluation charge on an amount of US$10 million to 100 million shall be at 1‰. Based on this calculation, if an evaluation charge on a single case reaches RMB5, 000 yuan, then only 80% of the excessive amount shall be actually charged on the single item.
Article 43
The products manufactured by enterprises are allowed to be exported by enterprises themselves, if in case the export involves an export quota or export license, the enterprises shall apply to relevant authorities for solutions. In case of products to be exported being products to be handled by authorized agent only, such products shall be sold to authorized agents for export or to be exported on the basis of an agency export agreement. In the event of the products being exported by a foreign trade company on the basis of an agency agreement, all foreign currency incomes except for the agreed agency charges shall be maintained by the enterprises for future development.
Article 44
In the event of a foreign invested enterprise importing materials subjected to quota system for their own use, the application and approval procedure shall be as same as for Chinese domestic enterprises.
Article 45
In the event of a foreign invested enterprise importing seed, seeding, stud stock, forage, animal and planting medicine subject to approval of forestry authority and inspections of exit & entry quarantine authority, import license shall not be required and such materials imported shall be in the custody of Customs and cleared at Customs just by presentation of import/export contracts, unless other stipulated by the state.
Article 46
In the event of a foreign invested enterprise importing production equipment and necessary technology or accessories as required to enable cultivation, planting, breeding and agro-produce processing and in the event of foreign resident personnel who have obtained residential card importing reasonable number of house articles, Customs duty and linkage VAT shall be exempted.
Chapter 8 Personnel Management
Article 47
Special technical & management personnel shall be allowed to work in foreign invested enterprises.
Article 48
Technical personnel working in foreign invested enterprises are free to apply for corresponding technical specialty qualifications without restrictions on identity, territory, post and schooling educations. Those who have made outstanding contributions are even entitled to apply for technical specialty qualifications of a higher grade according to municipal regulations on accreditation of technical specialty qualification for special personnel.
Article 49
Foreign invested enterprises are free to transfer in or temporarily call in employees of units of different ownership; such transfers shall be treated the same as for Chinese domestic enterprises.
Article 50
A foreign invested enterprise may entrust a personnel exchange agency to arrange public recruitment of Chinese employees. The personnel to be recruited can be decided by foreign invested enterprises on their own, personnel & labor administrations shall give priorities in completing necessary formalities, and no administration expenses shall be charged by municipal personnel and labor departments except for normal service fees, which are charged by the handling agencies.

Article 51
In the event of a foreign invested enterprise applying to labor assurance administration for Permit for Employment of Foreigners in PR China and Employment Permit for Foreigners in PR China, service fees and employment administration expenses shall be exempted.
Article 52
Foreign invested enterprises recruiting yearly graduates from colleges, technical secondary schools and postgraduates can either contact directly the colleges and schools or entrust municipal personnel exchange institutions as an agent to make the recruitment and complete necessary formalities.
Chapter 9 Removal Development
Article 53
In the event of a foreign invested enterprise taking over and merging, or entering into a joint venture or co-operative operations with enterprises inside Three-Gorges Project area which will be removed, such newly founded enterprises shall be treated as a removal enterprise.
Article 54
In the event of foreign merchants investing in constructions of communication, energy, telecom and environment protection inside the Three-Gorges Project, not only the re-constructions will be covered by preferential policy, but also the extended constructions will be covered. For those who sell the right of use of re-constructed facilities for a certain period of time, priorities shall be given in distribution of Removal Compensation Fund.
Chapter 10 Miscellaneous
Article 55
The proportion of export and sales in Chinese market of products manufactured by foreign invested enterprises can be decided by enterprises on their own, unless otherwise stipulated by the state.
Article 56
A foreign invested enterprise shall enjoy the same treatment as extended to a domestic enterprise in respect of water, power, gas supplies, as well as highway maintenance charges on vehicles of foreign invested enterprises and of foreign merchants.
Article 57
In the event of a foreign invested enterprise re-structuring an enterprise in distress and having taken over all employees, the land-use fee can be exempted subject to approval of municipal government.
Article 58
In case that the foreign personnel of foreign invested enterprises need to stay for a long term as required by the contract stipulations, formalities for such long stay shall be handled by Municipal Public Security Authority. In case that the Chinese personnel working in wholly foreign owned enterprises or foreign invested enterprises between foreign enterprises and Chinese partners of non-state-ownership need to go abroad for business purpose, the formalities for going abroad shall be handled by Municipal Public Security Authority whilst the formalities for Chinese personnel working in other foreign invested enterprises going abroad for business purpose shall be handled by Municipal Foreign Affairs Office.
Article 59
Agricultural project with investment in minority areas, the state and provincial poverty areas shall be covered by state preferential policies applicable to minority and poverty areas.

Article 60
The above provisions shall come into effect from date of publication, and is superseding the original Preferential Policies Encouraging Foreign Investment in Chongqing (Yufu [1997] No.15), Supplementary Provisions of the Preferential Policies Encouraging Foreign Investment in Chongqing (Yufu [1998] No.43) and the Preferential Policies Encouraging Foreign Investment in Agricultural Sector of Chongqing (Yufu [1997] No.77) which are hereby declared as abolished immediately.

Service Organizations for Investment 2005-08-26

Organization Telephone Fax Website
Chongqing Development and Reform Commission 86+23+6389 9492 86+23+6361 5852 www.investcq.gov.cn

Chongqing Economic Commission 86+23+6389 9446 86+23+6389 9445 www.cqec.gov.cn

Chongqing Commission of Foreign Trade and Economics 86+23+8901 8014 86+23+8901 9397 www.ft.gov.cn

The Administrative Commission of Chongqing North New Development Zone 86+23+6752 1302 86+23+6751 2367 www.cnnz.gov.cn

The Administrative Commission of Chongqing Economic and Technological Development Zones 86+23+6298 2614 86+23+6298 2483 www.cetz.com

The Administrative Commission of Chongqing High-Tech Industrial Development Zones 86+23+6860 1953 86+23+6860 6272 www.hnzcq.gov.cn

Advantageous Industry Catalogue of Foreign Investment in Mid and West China (Excerpt)
(Revised in 2004)　
2005-08-26

　　According to the Foreign Investment Orientation Guiding Prescription issued in February, 2002（No.346 promulgated by the State Council）, in order to implement the developing strategy of west China, reanimate the utilization of foreign investment in Midwest area, introduce advanced technology and equipment, develop the advantageous industry and the enterprises with leading technology, accelerate the upgrading of industry structure optimization and the general economic condition of Midwest area, in accordance with the national industry polices, the Advantageous Industry Catalogue of Foreign Investment in Midwest Area issued in June, 2000 is revised.
　　The foreign investment item that belongs to this catalogue will enjoy the preferential polices related to the Foreign Investment Orientation Guiding Prescription and Suggestions for further encouraging foreign investment from foreign economic and trading ministry transmitted by state council office (state council office 1999 No. 73).
　　Before this catalogue take into effect, the approval of items is in accordance with the related polices of original catalogue. The items under construction, which is in accordance with the prescriptions of this catalogue, are performed according to this catalogue.
　　The related sides, approving foreign investment items in Midwest area, should thoroughly implement the national industry policies, strictly enforce the related national laws and codes, audit according to the actual examining and approving purview and procedure, pay attention to the improvement of productive technology level and product structure, regard the proper utilization of resources and protection of ecological environment and prevent overlapping construction and blind expansion of throughput.
The nation will make timely adjustment and revision to this catalogue according to the need the economic development and the change of domestic and international market environment.
Chongqing
1.　Plantation and processing of natural spice.
2.　 The following up industry development of key ecological project such as convert farmland into forest and 　　grassland, protection on natural forest etc.
3.　Construction of high yield and quality silkworm base.
4.　The development and application of water-saving irrigation technology.
5.　Production of ramie textile products.
6.　The production and development of the lower level chemical products of natural gas.
7.　The development and production of animal and herbal medicine (except those listed in the resources under national protection).
8.　The development and production of new type medical appliances.
9.　The manufacturing of automobile spare parts.
10.　The construction and management of city network for natural gas supply, heating and water supply and drainage (with a Chinese holding party if in large and medium sized cities).
11.　Development of tourist resorts (spots) and construction, protection and operation of their supporting facilities.
12.　Passengers’ road transport.

The Exemption Approval for the Import Equipment of Foreign Investment Enterprises 2005-08-26

Approval Items
The Exemption Approval of the Import Equipments of Foreign Investment Enterprises
The bases for approval Circular of the State Council Concerning the Adjustment in the Taxation Policy of Import Equipment
Conditions for projects to be approved

1. Chinese-foreign equity joint ventures, Chinese-foreign contractual joint ventures and foreign-capital enterprises：their projects shall be among the encouraged ones which are listed in the Catalogue for the Guidance of Foreign Investment Industries promulgated by the state; their projects shall be among the encouraged ones which are listed in Catalogue of Priority Industry for Foreign Investments in Central and Western Areas promulgated by the state.
2. The import commodities are not among the Catalogue of Non-Duty-Free Commodities to be Imported for Foreign-funded Projects promulgated by the state.
3. If the projects have availed themselves of loans from foreign governments or international financial organizations to import electromechanical equipments, the equipments except those non-duty-free equipments prescribed by the state can be exempted from duty

The procedure for projects to be approved
1. The approval documents for the establishment of Chinese-foreign equity joint ventures, Chinese-foreign contractual joint ventures and foreign-capital enterprises（the production projects for automobiles, discs, aviation vehicles shall provide the precedence formalities）
2. The list of import commodities.
3. If the projects have availed themselves of loans from foreign governments or international financial organizations, the approval document for the projects shall be provided；the applications of project owners；the list of import equipments（if especial commodities are concerned, the permission evidence for the electromechanical commodities import shall be provided）
Special note According to the regulations of General Administration of Customs，the applications and relevant documents of applicants which accept equipments donated overseas shall be handled in Chongqing Customs.

How to Set up Foreign Investment Projects in Chongqing 2005-08-26

Approval items
The verification and approval of foreign investment projects（for the projects Chongqing municipality is authorized to approve）

The bases for approval
The State Council’s Decision on Reform of the Investment Structure (Document No. 20 issued by the State Council in 2004)
Chongqing Municipality’s Interim Measures for the Approval of Foreign and Overseas Investment Projects（Document No. 110 issued by Chongqing municipal government in 2004）

Conditions for projects to be approved 　　
1. The projects shall be in accordance with the state’s relevant laws and regulations, and the industrial policies of foreign investment (according to Provisions on Guidance for Foreign Investment Industry, Decree No. 346 issued by the State Council in 2002; Guidance Catalogue of Foreign Investment Industries, Decree No. 21 jointly issued by the National Development and Planning Commission and other two ministries or commissions in 2002);

　　2. The projects shall be in accordance with the long and middle term planning of the economic and society development of the state, the vocation planning and the requirements of policies of industrial structure adjustment；
　　3. The projects shall be in accordance with the public interest and the relevant regulations on the state’s anti-monopoly；
　　4. The projects shall be in accordance with the requirements of policies of land use planning, the general planning of city and environmental protection；
　　5. The projects shall be in accordance with the standard requirements of technology and techniques, prescribed by the state；
　　6. The projects shall be in accordance with the relevant requirements of project administration of the state’s capital, and of the administration of foreign loan.
Authorities for approval 　　1. The encouraged or allowed projects with a total investment of from 30 million dollars (including 30 millions) to 0.1 billion dollars, or the restricted projects with a foreign investment of less than 50 million dollars shall be verified and approved by Chongqing Municipal Development and Reform Commission；
　　2. The industrial projects with a foreign investment of less than 50 million dollars shall be verified and approved by Chongqing Municipal Economic Commission；
　　3. The encouraged or allowed projects with a foreign investment of less than 30 million dollars shall be verified and approved by the local development and planning commissions；
　　4. If the encouraged or allowed projects with a foreign investment of less than 30 million dollars is to transform or enlarge industrial enterprises, they shall be verified and approved by the local economic commissions；
　　5. If the encouraged or allowed projects with a total investment of less than 0.1 billion dollars are in the north new development zone, economic and technological development zones, or high-tech industrial development zones, they shall be verified and approved by the administrative commissions of the local development zones.

The charge for approval Free of charge

The term for approval 　　

1. The decision shall be made within 20 workdays since the day when the project is accepted. If the decision can be not made with 20 workdays, the term can be extended to be 30 workdays after the charge hand in the authority approves it.
　　2. The time the advisory body entrusted by the approval authority spends to appraise the project is not included by the term prescribed by the previous provision.
The list of application materials (The materials shall be bound according to the order, altogether five sets are needed)：
　　1. The application shall include the following：the name of the project, the operation term, the basic information of investors; the project’s construction scale, the main content to be constructed, and the products, the mainly adopted technology and techniques, the target market, the planned number of employees; the construction location, the requirements for resources like land, water and energy, the consumption of main raw and processed materials; the appraisement of the influence upon the environment; the prices of concerned public articles or service; the total investment, the registered capital, the investment amount of every investor, the method of investment contribution, the finance plan, the equipments necessarily to be imported and the correspondent amount; If inviting of public bidding is necessary in accordance with regulations, the preliminary plan for the inviting is necessarily provided.
　　2. The registries (business licenses) of foreign and Chinese investors, commerce registration certificates, the latest financial statements that have been audited (including the balance sheet, the profit and loss statement and the statement of cash flows), the certificates of its credit worthiness provided by the bank where the account is opened；
　　3. The agreement of joint venture, the board’s decisions on the increased fund and projects of purchase and mergence；
　　4. The letter of financing intent, provided by the bank concerned；
　　5. The appraisement opinions about the influence on the environment, provided by the supervising administrative authority of environmental protection；
　　6. The opinions about the planning and the location choosing, provided by the supervising administrative authority in charge of city planning；
　　7. The preliminary verification opinions about the land used for the project, provided by the supervising administrative authority in charge of land and resources; or the grant contract of the use right of the state-owned land；
　　8. If the contributive capital is from the state-owned assets or land use right, the confirmation from relevant authorities shall be provided；
　　9. When the especially allowed projects for business are concerned, the approval from the relevant authorities shall be provided；
　　10. If the projects have to have a preliminary verification by local development and reform authorities in districts or counties, the preliminary verification opinions by local development and reform authorities in districts or counties shall be provided.
The ways of decision 　　1. The written document for the administrative approval；
　　2. The written document for the negative decision. But the reasons shall be provided. And the applicant shall be informed that he has the right to apply for administrative reconsideration or to bring an administrative suit according to the law；
　　3. The verification results will be made public in the website for investment invitation（www.investcq.gov.cn）.

Modification 　　
The applicant shall apply to the approval authority for modification if the construction location of the approved project has been changed; if the investor or the shareholding has changed; if the total investment has exceeded the approved amount by over 20%ï¼›if the relevant laws, regulations or industrial policies requires the applicant to do modification. The modification is verified and approved in light of the original procedure of verification and approval.

The validity period of approval
Usually, 2 years.

According to the actual situation, the National Development and Reform Commission will work out and issue the model for the project application.

Investment

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Three Development Zones have reformed the Approval System
The period of Project Approval has been Shortened to be Seven Days
2005-08-26

The period of project approval has been shortened from one hundred days to seven days, and there exists no bottom limit for capital to be registered, either for the individual investment or the joint venture—The Municipal Business and Industry Administration Bureau made public its Opinions on Bettering the Development Environment of the Economic Development Zones to Encourage the Investment (later shortened as the Opinions). This has been a great convenience for enterprises to invest in Chongqing.
　　This convenience first embodies on the approval procedure. In the past, the tandem approval mode was used in Chongqing, under which one enterprise must follow suits: first to submit to the relevant department its application, second to get the capital warrant or the approval file after this department’s approval, then to submit to the business and industry administration bureau its application for license. This mode added to the investor’s cost and lengthened the time for license. One typical example was like this: to open up a realty company would require 160-170 authority stamps and last one hundred days.
　　According to the Opinions, Chongqing will try out the cross approval system in the New North Zone, the New Hi-tech Economic Zone and the Economic Development Zone. That is, the business and industry administration functions will first accept the enterprise’s application for license, and within two workdays copy and cross-inform the functions for the cross-approval, which shall respond within seven workdays. If the relevant functions don’t respond with 7 workdays, the regarded response will be approval.
　　Furthermore, great changes have taken place in the registration system for domestic investment enterprises. The “getting-on before buying the ticket” method will be adopted, that is, the enterprises may first get the qualifications certificate for business before they get the license, and the registered capital can be solved in the way of installment. Thus, the long period of organizing one enterprise has been avoided, and the sequence contradiction between the certificate and the license has also been solved.
　　Meanwhile, the threshold of the permission to enter the market has been greatly lowered. As to the limited companies majoring in production or wholesale, the bottom line for capital to be registered has been lowered from 500 thousand Yuan to 200 thousand; the retail, from 300 thousand to 100 thousand; the intermediary service, from 100 thousand to 50 thousand. As to the individual businesses or the joint ventures, no bottom-line at all.
　　The same is with the grouping of enterprises. As to the parent company, the bottom line for capital to be registered has been lowered from fifty million Yuan to five million. The bottom line for the total capital of the parent company and its subsidiary companies has been lowered from 100 million Yuan to ten million, and the number limit of the subsidiary companies has been reduced from five to three. Besides, if the foreign investment is below twenty-five percent of the registered capital, the enterprise may still be registered as the foreign investment enterprise after it is approved by the approval functions.
　　It is learnt that these policies will be generalized in the whole city after they have been tried out some time in the three economic development zones.

Chongqing to Set up Fifty Industrial Parks with a Gross Output Value of 200 Billion Yuan in 2010 2005-08-26

By 2010, Chongqing will have set up fifty characteristic industrial parks with a gross output of 200 billion yuan, of which the industrial increment will surpass fifty billion yuan. On August 6, the reporter learned from the Municipal Economic Commission that Chongqing had worked out the overall planning for the characteristic industrial parks.
As is learnt, Chongqing has now formed the “three plus thirty” pattern of industrial parks, that is, two national economic development zones, the Changshou Chemical Industrial Park, and thirty characteristic industrial parks. According to the newly-made “Guidelines on the Industrial Layout of Chongqing’s Characteristic Industrial Parks”, Chongqing will build fifty characteristic industrial parks and arrange its industrial parks into three big economic zones. The twenty new industrial parks will be gradually determined according to the actual needs.
It is learnt that the industrial parks in the urban areas of Chongqing will focus on the technology intensive industry, the fund intensive industry and the building industry, with a suitable development of labor-intensive industry. The development of the high-tech industry and the reconstruction of the traditional industry should be combined to forge the metropolis-type industry. With the construction of the second ring freeway, the eleven economic groups as Baishiyi, Beibei, Lianglu, Yuzhui, Xiyong will be closely connected with the urban areas. Between the first ring freeway and the second, what will be mainly arranged are the big industrial projects, which have a leading effect, which will make them the important parts of China Auto-cycle City and of China Automobile City. Meanwhile, great efforts will be made to build up West China Aluminum City and West China Clothes Processing Base.
The industrial parks along the West Chongqing Economic Passage will build up the processing system to match the big industry, and realize the economic transformation from the extensive style to the intensive style. The intensive industry zone and the industry range will be formed on the axes of the Chongqing-Chengdu expressway and the Chongqing-Hechuan expressway to develop the matching industries adjusted to the local conditions and to accept the enterprises transferred from the urban areas. In this intensive industry zone and the industry range the counties and cities like Jinagjin, Bishan, Shuangqiao, Yongchuan, Hechuan will be aimed as the main increment poles. Effort will be given to build up the West China Shoes City and the West China Heavy Equipment Base.
The industrial parks in the Eco-economic zone of the Three Gorges reservoir areas will put their efforts to the source-type industry and the port-type industry, transfer their effort from closing and bankruptcy work to the re-organizing, transferring and nurturing of enterprises in the reservoir regions, and thus better the employment of the migrated population for the economic development of the whole reservoir region. With important increment poles of such district like Wanzhou, Fuling, Qianjian, Changshou, they will put into good effect the source-prominent processing industry and the labor-intensive industry on the axes of the Chongqing-Wanzhou expressway, the Changjiang River waterway, and the Chongqing-Huaihua railway. Effort will be given to build up the chemical industry zone mainly based on the natural gas and saline sources, and to build up the West China Construction Materials Producing Base.

The Jingkou Industrial Park to Double the Present Industrial Scale 2005-08-26

As the first mechanical and electronic industrial park in Chongqing, the Jingkou Industrial Park in the Shapingba District made its five-year development plan of “doubling the present industrial scale of Shapingba District”. The reporter got this new a few days ago from Shapingba District.
　　The Jingkou Industrial Park is a municipal characteristic industrial park approved to be founded in December 2002. It majors in the mechanical and electronic industry, with a subsidiary development in electronic information and new materials science and technology. By using the BOT mode, it has attracted enterprises to invest in infrastructure by the way of industrial realty; and it has built its own workshops to be rented by the settled enterprises. By April of this year, it had quickly succeeded in bringing in investment. Now, forty-seven enterprises have settled there, and three more are waiting to sign contracts and settle in.
　　Among the settled enterprises, eighteen are those with a yearly output value of over 100 million Yuan; seventy percent are from outside Shapingba District; seventy percent are about science and technology; ninety percent are about the mechanical and electronic industry. The total investment of the settled enterprises amounts to 4.8 billion yuan. Some enterprises like Chongqing Wangcheng, who settled there in the way of amortizing the land, have turned out automobile gears and motorcycle gears to export to Japan and U.S.A..
　　A person in charge of Jingkou Industrial Park said that last year GDP of Shapingba District was 11.3 billion Yuan, but Jingkou Industrial Park had planned to double that in five years, with a yearly output value of 15 billion Yuan and a pre-taxed profit of 800 million Yuan, offering more than 30000 employments.

The Industrial Chain Mode Newly Emerging in Chongqing’s Industrial Parks 2005-08-26

　　Thirteen characteristic industrial parks in Chongqing have set up the industrial chain modes, and the group development of industry has just emerged. This is the latest investigation result
　　As is learnt, these thirty characteristic industrial parks have developed into a certain size with development coverage of forty km2. Thirteen of them have set up the industrial chain mode, and have formed nearly thirty industrial chains mainly concerning automobiles and automobile parts, motorcycles and motorcycle parts, aluminum processing, leather and leather shoes, saline gas chemical industry, precision machinery, and information technology.
　　Each industrial chain involves an average of fifteen enterprises, and its critical point for chain development is the introduction and cultivation of the leading industrial enterprises. By now, twenty-three industrial parks have brought in fifty-three leading industrial enterprises, which are able to drive the whole development of the industrial parks. More than twenty of the fifty-three have the cores and elicited the park’s industrial building-up effect.
　　It is estimated that the thirty industrial parks in Chongqing will bring in 1475 enterprises by the end of this year, that, compared with last year, the gross value of industrial output will double and the pre-taxed profit will increase by 45.2%.