These opinions are formulated for the purpose of speeding up the development of high-tech industries of Fuzhou, giving play to the leading role of high-tech industries, optimizing economic structure, fostering tax revenue sources and developing local financial strength.
1. Classified guidance shall be adopted and measures in accordance with the phase and category of enterprise shall be taken to facilitate the development of high-tech enterprises (high-tech enterprise as mentioned in these opinions refers to the high-tech enterprise recognized by Fujian Science and Technology Commission). Supportive services shall be well provided for enterprises featuring strong economic strength, regularized operation and stable development. Besides optimizing the external environment for business operation, various national and provincial preferential policies for high-tech enterprises shall be well implemented. For enterprises with good strength, promising perspective and scaled development, financial supports can be increased if required, while incubation services shall be provided to small-sized high-tech enterprises and necessary venture investments shall be made to shorten the incubation period.
2. Financial supports to high-tech enterprises shall be further strengthened. The municipal fund for supporting industrial development, three kinds of science and technology funds and retrieved working fund for science and technology parks shall be used in accordance with unified planning, so that all financial resources can be gathered to support high-tech enterprises and high-tech achievement transformation & industrialization projects.
3. The income tax of high-tech enterprises will be collected at the rate of 5%, while newly established high-tech enterprises will be exempted from income tax for the first two years and half payment (15%) for the following three years, starting from the year of profits.
4. Basing on the figure of last year, high-tech enterprises will be refunded with 30% of local retained portion of newly added income tax for three years starting from the year of 1999 (or the year of recognition for newly recognized high-tech enterprises and high-tech projects).
5. Projects using high and new technologies to improve traditional industries shall be supported with corresponding preferential policies and investments. In case an enterprise adopts high and new technologies recognized by a provincial-level competent department of science and technology to reconstruct traditional industrial projects, the enterprise can retain its land revenues obtained from asset reorganization and incomes received form the transfer and leasing of idle equipments, so that those funds can be used for technological transformation.
6. Instruments and equipments of high-tech enterprises for high-tech development and production can accelerate depreciation upon the approval of taxation department. The depreciation expense can be used as the renovation and reformation fund.
7. Under the following circumstances, the financial department shall refund full sum of local retained portion of income taxes paid for newly increased profits of the product, and refund 50% of local retained portion of new increased value added taxes: product listed in the national plan for trial production of new products, and patent product (patent of invention) firstly manufactured in Fuzhou (the period of preferential treatment will last for three years starting from the date of product sales); product listed in the provincial plan for trial production of new products, and patent product (patent of utility model) firstly manufactured in Fuzhou (the period of preferential treatment will last for two years starting from the date of product sales).
8. Establish high-tech venture foundation. The foundation can be invested by the municipal national asset operation company, scientific and technological enterprises, social institutions and individuals, and will mainly be used as the investment on high-tech enterprises and the circulating fund for the transformation of scientific and technological achievements (paid use).
9. Actively introduce high-tech projects at home and abroad. In case a high-tech enterprise or a high-tech project planning to settle in five districts or eight counties of Fuzhou Municipality requires to use lands, it will be exempted from the fee for complete-set of urban infrastructure that charged by the local government (exclusive of the compensation fee for land acquisition and settlement). The land use fee will only be charged after the enterprise has been established for three years. Large-scale high-tech projects capable of driving the development of supplementary industries will enjoy preferential treatments on land use, and will be exempted from land-transferring fees and all other fees charged by the local government. However, the land use right must not be further transferred, leased or mortgaged.
10. Such preferential policies as low-rent or free factory building will be provided to high-tech enterprises or projects settled in science and technology parks of Fuzhou, Mawei Guangda Technology Park, Mawei Biyi Electronic Town, Fuqing Baiyi Electronic Base, Cangshan Nantaidao Industrial Park, Taijiang Taixi Industrial Park, Straits Software Park, New Land Scientific Park of Fuzhou University, Minhou Shuangfu Industrial Park, Shangjie Bioengineering Park, Cross-straits Experimental Zone of Agricultural Cooperation and Minhou Jingxi Agricultural Demonstration Zone. In case a high-tech enterprise or high-tech achievement transformation project builds or purchases a business domicile, the local retained portion of housing property tax or urban real-estate tax paid within five years starting from the completion date or purchasing date will be refunded to the enterprise by the financial department.
11. High learning institutes and scientific institutions are encouraged to establish high-tech enterprises and projects in Fuzhou, which will enjoy priorities offered by the high-tech venture foundation and preferential treatments for enterprises operated by high learning institutes.
12. In case a high-tech enterprise makes investments on a high-tech achievement transformation project with its after-tax profits, the local retained portion of business income taxes paid within three years will be refunded by the financial department. In case an enterprise reinvests its profits to establish or expand high-tech enterprises, projects or products, the local retained portion of business income taxes paid for the reinvestment will be refunded if the operation period is beyond five years.
13. For high-tech enterprise with general R&D expenses on new product, new technology and new process of this year exceeding 10% of that of last year (including 10%), besides getting actual expenses listed and paid in accordance with rules, the enterprise may further have its 50% of actual expenses to offset taxes payable of the current year, upon approval of the competent taxation authority at the end of the year.
14. Positive efforts shall be made to support the development of software industry and help software industry become the leading industry of high-tech industries of Fuzhou. Besides enjoying related preferential policies set forth in "Rong Zheng Zong [1998] No.177", software enterprises will also enjoy the following favorable policies:
1) Basing on the figure of last year, software enterprises will be funded 50% of local retained portion (newly increased) of value added taxes paid for supporting the development of those enterprises. The support period will be five years.
2) Software enterprises of the software park shall pay product value added taxes for profits and other revenues received from the sale of hardware products, as well as technological trade business taxes for incomes received from the installation and maintenance of its independent software products.
3) Software enterprises with export products (either through independent operation and entrusted exportation) will enjoy the preferential treatment of tax exemption, tax offset or tax refunds.
4) Software products are allowed to be priced and converted into shares, while the maximum proportion must not exceed 35% of company's registered capital.
5) In view of the fact that software products require long-time testing after being exported, and can only be delivered with product quality being accepted, the time of acceptance will be the starting time for cancellation after verification of export exchange of software products.
6) New identification methods other than those for general industrial products shall be applied to high-tech products during exportation. For the exportation of software products, the approach of "online monitoring and independent declaration of enterprise" can be adopted, while the value of software products can be identified according to the contract value or actual value in transaction.
15. In case a high-tech enterprise and project related personnel need to travel abroad on business, they can apply 3 multi-entry & exit passports for entering Hong Kong Special Administrative Region, and choose 5 (or less) technical personnel or business personnel according to actual demand for handling simplified procedures for traveling abroad (or Hong Kong, Macao). Such a preferential treatment allows multi-entry & exit upon approval of once only.
16. During the process of high-tech achievement transformation carried out by enterprises and public undertakings, 5-10% of newly increased profits of the year with the highest profits during three years after the project has been put into production, shall be extracted and used as the costs for encouraging principal decision makers and contributory technical personnel. The enterprise accomplishing high-tech achievements can extract 25-40% of its net incomes received from technology transfer to encourage its technical personnel specialized in research works and project development, while technical personnel engaged in agricultural technology transfer, technology service and technology contracting can be encouraged with 30-50% of net incomes. Those who have introduced patent technologies will be encouraged in accordance with actual profits.
17. Encourage high-tech enterprises to introduce talents. Professional technicians (with bachelor degree of above) employed by high-tech enterprises, in accordance with provisions set forth in "Rong Zheng Zong [1998] No.199" and "Rong Zheng Zong [1998] No.222", can transfer their grain and oil rationing registration without being limited by the growth figure of urban population. Accompanying spouse, minor children and dependent parents can become urban dweller from the countryside if they are registered as an agricultural household.
18. Actively propel the property right institutional reform and structure adjustment of high-tech enterprises. The enterprise shall establish a modern business system according to demands of social market economy, and allow the adoption of such approaches as technical shares and equity participation by employees within the enterprise, so as to straighten out property right relations. The reform of joint stock system and cooperative shares system shall be carried out, while the system and mechanism catering to market competition shall be established. Advantageous high-tech enterprises can establish limited liability companies and enjoy the priority of public listing.
19. More favorable environment shall be provided to facilitate the development of high-tech enterprises, and legitimate rights and interests of high-tech enterprises shall be protected in accordance with the law. Ordinary examinations and duplicate inspections that will influence regular production and business operation of high-tech enterprises, as well as arbitrary quotas and unjustifiable charges, shall be prohibited. A support system shall be established for high-tech enterprises to provide such services as information, technology, management and talent introduction, while related policies shall be well implemented, certificate issuing procedures shall be simplified, processes for examination and approval shall be reduced, and taxes shall be refunded in time.
20. These opinions shall come into effect as of the date of promulgation, and shall prior if conflicting with existing provisions. These opinions are also subject to further revision in accordance with the adjustment of state policies on high-tech enterprises.
CPC Fuzhou Municipal Committee
Fuzhou Municipal People's Government
March 2, 1999
