Preferrential Policies Provided by the Hunnan New Area Major Policies For Encouraging Investment

In order to encourage and support traveling merchants at home and abroad to invest, de­velop and construct at Hunnan New District, the new district has successively formulated poli­cies supporting enterprises entering Hunnan New District, giving the most preferential poli­cies and energetic support nationwide to inves­tors at home and abroad. The main contents are generalized as follows:

1. Enterprises entering the district enjoy national policy about foreign-funded enterprises, policy for supporting high and new technological in­dustries and various other preferential policies.

2.  Capital stock proportion is not restricted for investment field allowing foreign capital to en­ter, trial operation is allowed for investment field restricting and temporarily restricting foreign merchants to enter; foreign capital and private capital are allowed to participate in new district construction by means of various investment mode.

3.  For those going in for high and new techno­logical industrial project development, research and production, infrastructure, social public wel fare project and modern service industrial project development and construction, special favor will be given by new district in land selling price according to project level, project invest­ment amount and land fee payment circum­stance.

4. According to actual investment amount and tax payment circumstance of project entering the district (entering new financial portion), en­ergetic support will be given to enterprises en­tering the district by new district finance by means of fund.

5.  High and new technological industry devel­opment fund is established for mainly being used as creation fund, guarantee fund, discount fund and reward fund of high and new techno­logical enterprises.

6.  High and new technological industrialized project, infrastructure project, social public wel­fare undertaking project and modern service in­dustrial project enjoy treatment of non-fee-area, all administrative charges are exempted.

7. Modes of One Measure For One Matter and Special Measure For Special Matter are adopted for the strongest 500 enterprises of the world and important industrialized project, in­frastructure investment project and social pub­lic welfare undertaking project, more flexible preferential policies are given.

8. Talent introduction fund is established by new district to be specially used for various allow­ances of introducing talent.

9.  Excellent talent award is established in the new district, ample rewards will be given to sci­entific and technological personnel and enter­prise managers with great industrialization

achievement.

10. Preferential and supporting policies will be given to talents introduced to the new district in dwelling, registered permanent residence of family members, finding employment by family members and their children going to school, etc.. Refer to various policies promulgated and imple­mented by the new district for detailed content of above policies.

Preferential Polices About Enterprises In­come Tax

1.  New and high tech enterprises will enjoy areduced tax rate of 15% on enterprise income. Those enterprises scheduled to operate for a period 10 years of wll be exempt from income tax is exempted for 2 years beginning from the year of putting into production.

2. Productive foreign-funded enterprises sched­uled to operate over 10 years will be exempted from income tax for the first and second profitmaking year, and, another 50% reduction of income tax will be offerred from the third to the fifth year.

3.  New and high tech enterprises will enjoy a reduced income tax rate of 10%, if the export value exceeds over 70% of total output value of that year.

4.  For income of high and new technological enterprises performing technical transfer and technical consultation, technical service and technical training related to technical transfer in the process of technical transfer, income tax may be provisionally exempted for annual net income below 300 thousand yuan.

5.  For foreign- funded advanced technological enterprises in the district, after the expiration of the income tax exemption and reduction period, income tax will be halved in another three years.

6.  For foreign-funded enterprises in the district engaged in infrastructure construction of energy source, communication and transportation, tele­communication, etc. with over 15 years opera­tion period since the year of beginning to earn profit, all income tax already paid will be returned to the enterprises by the finance department of the district in 10 years.

7.  For foreign-funded enterprises directly rein­vesting the profit gained from the enterprises to the high and new district or newly established enterprises with no less than five years of op­eration period, 40% income tax already paid for reinvestment portion may be returned; For for­eign-funded enterprises directly reinvesting to sponsor or expand product export enterprise or enterprise with advanced technology, all paid enterprise income tax of its reinvestment por­tion should be wholly returned.

8. For foreign-funded export enterprises and en­terprises with advanced technology, upon ap­proval by tax organization, income tax could be reduced and levied at 10% in the normal tax­able year.

9.  For enterprise engaging in electronic infor­mation production and doing business in the China Software City of Shenyang, income tax paid for the first 5 years may be returned to the enterprises totally in the first 2 years and halved in the latter 3 years.

Preferential Policies for Foreign Investors

1. For foreign or forein enterprises invested in Hunnan Industrial District,water fee for construc­tion shall be exempted and RMB 50/KVA is avail­able for the compensation of power expense for capacity increased

2.pernment assets in foreign-funded enterprises,upon aapproval,may be acceleraled depreciatin in the shortest depreciation year according to national regulations.

(1) 20 years for buildings

(2) 2 years for machines and other production facilities.

(3) 5 years forelectroic

facilities,conveyance,fuiture,and other appliances.

3.For the projects invested in china software city of shenyang,four fees shall be exempted eluding education fee.

4.For buidings new and high-tech development and manutacture, adjustment tax on fixed as­sets investment shall be zero. 5.For foreign-funded enterprises in Hunnan In­dustrial District,building tax already paid shall be retured in 5 years since the buildings have been completed or purchased. 6. Upon customs' approval, New and high-tech district will establish bonded warehouse and fac­tories. The customs shall be in charge of the contral of imported raw and unprocessed ma­terials and components.import tax and import products value-added tax shall are exempted on the basis of actual process and import amount. Export tax shall be exempted for export­ing products. 7.The joint ventures invested by Taiwan busi nessmen within shenyang science and technol­ogy Industrial park for both sides of Taiwan straits enjoy not only preferential policies pro­vided by National New and High-tech Industrial Development Zone but also the special prefer­ential policies provided by shenyang Muniaipal people's Government according to Regulations on ShenYang Science and Technology Indus­trial park for both sides of Taiwan Straits.

Price for Infrastructure Charging Items: Preferential policies for land transference fee

For the projects in Hunnan New District, the land price for industrial is 20 US dollars(excluding license fee) and over 50 years, Preferntial policy is avilable according to the following circum­stances:

1. The transference fee of the land shall be re­duced by 15% if the fee be paid at one fime within 60 days.

2.  For the proj ects with total investment sum of 5 billion US Dollors, the transference fee of the land shall be reduced by 15%.

3. For the new and high-tech projects confirmed by the New and High District with total invest­ment sum of 5 billion US dollors, the transfer­ence fee of the land shall be reduced by 15%.

4.  For establishing foreign-funded financial set­ups, the transference fee of the land shall be reduced by 90%.

5.  For moving enterprises, the transference fee of the land shall be reduced by 30% if the fee be paid off in 60 days.

List of the administrative management fees canceled in regards to foreign investment

1.  Foreign-funded enterprises registration fee

2.  Branches and offices of foreign-funded en­terprises registration fee

3. Companies of foreign-funded registration fee for starting

4. Foreign enterprises contracting management and administration registration fee

5.  Foreign bank establishing branches registra­tion fee

6.  Foreign enterprises establishing resident or­ganization registration fee

7.  Foreign enterprises establishing resident or­ganization deferred fee

8.  Foreign enterprises altering registration fee

9.  Foreign enterprises applying names registra­tion fee

10.  Foreign-funded enterprises annual inspec­tion fee

11.  Foreign-funded enterprises reapplying (changing) license fee

12. Fee to have duplicates of foreign-funded en­terprises registration license

If any of the above -mentioned fees to be charged by the higher authority, it will be born and covered by the administration committee.