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☆ Usage of land
1.The land needed by enterprise with foreign investment shall be obtained through governmental allocation or buying upon approval by land administrative department of people’s government at levels of municipality, county or above.
Enterprises which invest in the field of industry, commerce, finance, tourism, service trades, commercial housing shall get the right of land use through buying.
Enterprises which invest in agriculture, energy resource, communications and infrastructure construction and other public facilities shall get the right of land use through governmental allocation.
2.The right of land use obtained by enterprises with foreign investment through buying is permitted to be transferred, rented and right of land use is being transferred, tax on added land value shall be levied in accordance with relevant state stipulations. The right of land use is not permitted to be transferred, rented and mortgaged if it is obtained though governmental allocation. If the said land needs to be transferred, the right of land use should be transferred upon approval by corresponding land administration department of county and above level, and after going through the formalities concerning transfer and payment.
3. The land developing fee and land use fee for the enterprises with foreign investment who have obtained the land through governmental allocation shall be determined by local municipal or county government in accordance with stipulations in relevant state and provincial laws.
The export-oriented enterprises and enterprises with advanced technology shall be exempted from land use fee for the initial five years since the possession of the right of land use. On the sixth year, the enterprise shall be exempted from 50% of the lower limit of land use fee dertermined by the municipal or county government. Other enterprises with foreign investment shall be exempted from 50% of the lower limit of land use fee for the initial five years since the possession of right of land use. Enterprises engaged in one of the following projects can be exempted from land use within the using period upon approval by corresponding authorities:
1） Farming, forestry, stock raising and fishery;
2） Communication, energy resource and infrastructure constructions;
3） Projects to develop and make use of river valley or projects to rennovate waste land;
4） Non-profitable projects concerning education, culture, science and technology, health care, physical sports culture and other social welfare cause.
4、The longest time limit of Foreign businessman invest enterprise use land is：
1） industry use land is 50 years;
2） business, traffic public cause use land is 40 years;
3）dwelling use land is 70 years;
4）science, education, culture, health use land is 50 years;
5）other use land is 50 years
If use land is run out, want to continue using land, you must lengthen time limit before it is run out six months ago.
5、The pay of land exploit fee and land use fee Foreign businessman alone invest enterprise who use land must pay on time to enterprise China-Foreign investment and China-Foreign cooperation use land, land belong to Chinese, China must pay fee on time, not so, China-Foreign investment and China-Foreign cooperation pay fee on time.
☆ Tax
1. The manufacturing enterprises with foreign investment to be operated for a period of 10 years or more shall be exempted from income tax in the first and second year and allowed a 50% reduction of income tax in the third to fifth year since the year of profit making.
After the expiration of the legal tax exemption and reduction term, export-oriented enterprises whose exported products value occupying 70% of the total output value of the year can still be exempted from 50% of income tax according to the tax rate stipulated in the tax law. In case the half reduction results in a tax rate less than 10%, the tax shall be paid at a rate of 10%. After the expiration of the legal exemption and reduction term, the technologically advanced enterprises can still be exempted from 50% of income tax according to the tax rate stipulated in the tax for another 3 years. In case the half reduction results in a tax rate less than 10%, the tax shall be paid at a rate of 10%.
If the actual operation term is less than 10 years, the enterprises shall pay back all the income taxes that they have been exempted and reduced.
2. The enterprises with foreign investment shall be exempted from local income tax and municipal real estate tax for 5 years the year of profit making and year of operation respectively. The foreign-invested export oriented enterprises, enterprises with advanced technology and for infrastructure facilities, the primary industries as well as the projects for the development of agriculture, forestry, husbandry and by-products can be expemted from local income tax and municipal real estate tax for 10 years since the year of profit making and year of operation respectively.
3. The income tax of manufacturing enterprises located in urban area of Taiyuan with foreign investment shall be paid at a tax rate of 24%.
However, the manufacturing enterprises engaged in the projects below may be subjected to income tax at the reduced rate of 15% upon the approval of State General Taxation Bureau:
1. Technology and knowledge intensified projects;
2. The projects with foreign investment over USD 30 million and a long return period;
3. Projects of energy resource, communication and harbour constructions;
4. The enterprises with foreign investment engaged in agriculture, forestry, animal husbandry or established in economically less developed areas can still be allowed a 15 to 30 percent reduction of income tax for a period of 10 years following the expiration of the term for exemption and reduction through application to the taxation administrative department.
5. To further deepen the opening-up to the outside world and to attract more investors to Shanxi province, the Shanxi Provincial People’s Government has set up a principle, that is, all the foreign-invested projects will get tax refund which will make the actual income tax not more than 15%.
6. Value-added tax and consumption tax shall be exempted for the export products made by the enterprises with foreign investment, except those specially listed by the state.
7. For export products made by those foreign-funded enterprises registered with the Industry and Commerce after January 1,1994 and those approved to set up before December 31,1993 but developed new products different from the original ones, the consumption tax and the value-added tax shall be refunded or exempted.
8.Foreign business investment enterprise import goods with process coming-meterial and process in-meterial exempt from value-added tax and consumption tax. After coming-meterial process goods import, they exempt from value-added tax and consumption tax of process or entrust process goods fee.
9.After Foreign business make Coming-meterial and entrust other foreign business enterprise or Chinese enterprise process, they may coming-meterial free-tax testify, exempt from entrust value-added tax and consumption tax of process fee.
☆ Foreign exchange
1. According to the overall requirements for the establishment of the socialist market economy system, People’s Bank of China has decided that: From July 1, 1996 on, enterprises with foreign investment shall sell and purchase foreign exchange at appointed banks. Enterprises with foreign investment shall, in accordance with relevant regulations, submit foreign exchange account to local foreign exchange administrative bureau and divide the opened account according to the sources of the foreign income into current account and capital account. Upon approval by local foreign exchange administrative bureau and verification of highest amount of settlement account of foreign exchange, foreign exchange can be sold or purchased at the appointed bank. The formalities and procedures for enterprises with foreign investment to sell and purchase foreign exhange are the same as Chinese enterprises, i.e., on presentation of commercial documents proving the truth of transaction, the enterprises can sell or purchase foreign exchange.
If enterprises with foreign investment sell and purchase foreign exchange at the regulation centre, the procedures will be the same as before except that the purchase of foreign exchange need not to be approved by foreign exchange administrative bureau.
2. The profit and bonus of the enterprises with foreign investment after tax shall be paid from their foreign exchange account or purchased at the appointed bankand remit out. The foreign employees and overseas Chinese in the enterprises shall purchase foreign exchange with their RMB wages and legal income at the appointed bank and remit out.
3. The banks dealing in foreign exchange may offer following loans in Chinese or foreign currency to the enterprises with foreign investment by priority:
1) Medium and short term loan;
2) Medium and long term loan;
3) Buyer’s credit for import and export business;
4) Temporary loan;
5) Loans based on line of credit for enterprises whose export volume of the year occupying 70% of the total sales revenue;
6) Loans with limit for enterprises with good economic benefits and reliable credit.
4. Medium and long term loans needed by key projects invested by foreigners shall be arranged by competent governmental department with loans from banks and consortiums inside the province or loans from international consortiums.
☆ Labour and Capital
1. The recruitment, resignation, wage, benefits, labour insurance, labour protection, labour discipline etc. For the staffs and workers in the enterprises with foreign investment shall be conducted in accordance with Regulation Concerning Labour Management in Foreign Investment Enterprises.
2. Enterprises with foreign investment may determine by themselves their organizational structure personnel system and plans of labour and wage. Enterprises shall withdraw cash from the special account for total wage sum in the opening bank on presentation of “manual of total wage sum” and report to local labour administrative departments for record.
3. In accordance with production and management, enterprises with foreign investment may determine the amount, time, conditions and form to advertise for employees. The recruitment shall be carried out based on the principle of facing the society, public advertisement, overall examination and selection on merits. If the recruitment shall be from other regions or rural areas, the said enterprises shall contact the local labour administrative department. After recruitment, a labour contract shall be signed on the basis of equality and free will and on unanimity through consultation in accordance with state labour laws, regulations and policies and be testified by local labour administrative department. If the accepted employee has been working for another employer, the former employer shall make no obstacle for the transfer of the employee, and the transfer formalities shall be carried out upon mutual agreement.
Enterprises with foreign investment shall submit their labour and wage statistics regularly to the local statistics and labour administrative departments.
☆ Others
1. The supply of coal, electricity, water, gas and oil consumed by enterprises with foreign investment shall be guaranteed by relevant departments and enterprises.
2. For the transportation of the export products of the enterprises with foreign investment, the concerned enterprise shall submit a transport plan to competent provincial department of foreign trade and economic relations, by whom the plan shall, as a part, be put in the provincial transport plan of foreign trade goods, and shall be guaranteed. The products for domestic market shall be put in the provincial transport plan and be given priority to be transported. The enterprises may purchase special train and set up lorry teams by themselves for the transportation of their products.
3. If the telecommunication termination of the enterprises with foreign investment needs to enter the public net-work, they shall freely select within the State permitted field. If the enterprises need to rent special long distance trunk, they shall also have the right of priority.
4. If the materials required by enterprises with foreign investment for basic constructions, technical rennovations and production can not be obtained sufficiently in the market, they shall be organized by various departments to guarantee supply. The supply for key projects shall be arranged by the provincial corporation dealing in basic construction materials.
☆ Encourage
1. Projects concerning infrastructure facilities, primary industries, energy, transportation and industries for important raw materials, such as rennovation of mines, power industries, local railway, highway as well as coal intensive processing and conversion, metallurgy, aluminium industry, building materials and fine chemical products, etc;
2. Projects with advanced technology. These refer to projects which introduce advanced technology and equipment to improve product properties, save energy and raw materials, enhance technological progress and economic benefits for enterprises and to manufacture new products catering the market.
3. Projects which can earn foreign exchange through export. These refer to projects upgrading products level, expanding export market and increasing foreign exchange earnings through export.
4. Projects concerning the rennovation or graft of state-owned large and medium sized enterprises in the fields of five pillar industries in Shanxi Province including energy, machinery, metallurgy, chemical and building materials;
5. Projects for the development of agriculture forestry, animal husbandry and by products, as well as projects concerning new technology in processing agricultural products and for comprehensive development;
6. Projects for comprehensive utilization of resources and recoverable resources and new technology and equipment for protection of environment and other projects encouraged by state laws and administrative regulations.
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