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| Preferential policies for foreign investment In Wuhan |
Wuhan has issued a series of policies to attract large multinational corporations and in particular those of the top 500 which have not yet settled their office at Wuhan. Meanwhile, the government encourages and guides the investment expansion of the already located multinational corporations to establish their R&D center and scientific research organs.
Ⅰ Manufacturing Industry
1. 2% interest reduction for the loan of key programs
2. Special fund of 120 million RMB per year for the development of key industries
3. Land price based on the principle of “one issue, one negotiation” and eligibility for preferential regulations and charges
4. Preferential corporate income tax at the rate of 15% for high and new technology enterprises
5. Reduction of 50% of the R&D cost from the corporate income before taxation
6. Reward for foreign investment and investment expansion
Ⅱ Headquarters Economy
1. Joint subsidies from the municipal and district governments for the headquarters set up by foreign enterprises
2. Special fund for the development of the headquarters economy
3. Land use guaranteed for the headquarters enterprises
4. Green corridor for talents of the headquarters enterprises
Ⅲ Service Outsourcing Industry
1. Certain reward for the offshore business of advanced outsourcing enterprises
2. Preferential policies including special taxation on high and new technology as well as software export for service outsourcing enterprises
3. Interest reduction for loans of service outsourcing enterprises with orders abroad
4. Subsidies for the lease of office and land use cost
5. Preferential policies related to talents introduction, training and rewarding for service outsourcing enterprises
6. Talent training
7. Encouragement for the exploration of international market
8. Protection for intellectual property right, etc.
Ⅳ Preferential Policies to Attract Foreign-funded Banks
1. Certain fund reward for newly settled or immigrated financial institutions, with 10 million RMB at most
2. Reward with 50% of the municipal retention of business tax at most in certain years since the commencement of an enterprise
3. Reward with 100% of the municipal retention of corporate income tax at most in certain years since the profit year
4. Recommendation of local quality financing programs
5. Assistance for family location and children education of senior executives
6. Priority on visa obtaining
7. “One-stop” service for issues including register and entry of financial institutions
The Opinions on the Promotion of the Development of the Financial Industry promulgated by Hubei provincial government in April 2010 stipulates that the government of the municipality or the state where the headquarters, regional headquarters and background service centers of financial institutions newly established or settled in Hubei province as well as newly established municipal institutions are located shall make corresponding incentive policies.
Policies to Introduce Foreign Financial Institutions
The Opinions on the Promotion of the Development of the Financial Industry promulgated by Hubei provincial government in April 2010 stipulates that the government of the municipality or the state where the headquarters, regional headquarters and background service centers of financial institutions newly established or settled in Hubei province as well as newly established municipal institutions are located shall make corresponding incentive policies.
Financial institutions that have built the office occupancy in Hubei province for their own use will, after making full payment of the land transferring fees, obtain a one-time subsidy equivalent to the amount paid for the self-use occupancy from the local government.
Financial institutions that have purchased the office occupancy can get a one-time housing subsidy for the floor area of the self-use space. The Opinions on the Policies to Promote the Development of Foreign Financial Institutions in Wuhan issued by Wuhan municipal government in 2006 stipulates that as of 2007, the municipal financial department shall allocate RMB 100 million Yuan to be exclusively used for encouraging and supporting the development of foreign financial institutions.
Preferential Taxation Policies
1. Business tax: Business tax will be exempted for the income gained by foreign-invested enterprises, research and development centers established with foreign investment, foreign enterprises and foreign individuals from the transfer and development of technology as well as other related businesses such as technical consultation and services (from (1999) C.S.Z. Circular 273).
2. Enterprise income tax: Enterprise income tax imposed on a foreign-invested enterprise may be reduced to a rate of 15% after it has been identified as a high-tech enterprise; Unless otherwise specified by the State Council treasury or the competent tax departments, if the eligible advertising expense and business promotion cost incurred by an enterprise has not exceeded 15 percent of the sales (business) revenue of the same year, it may be deducted; and the amount exceeding the prescribed 15% can be carried over to future tax years for deduction.
3. Tariff and import value-added tax:for foreign investment projects which fall into the encouraged category or the restricted category B defined in the Catalogue for the Guidance of Foreign Investment Industries, tariff and import value-added tax will be exempted for imported self-use equipment with an amount under the aggregate investment, excluding the commodities listed in the Catalogue of Taxable Imported Equipment Used for Foreign Investment Projects. Tariff and import linkage tax will be exempted for imported raw materials and components required by foreign-invested enterprises for the production of export products.
4. Tax preferences for imported equipment: For foreign investment projects which fall into the encouraged category or the restricted category B defined in the Catalogue for the Guidance of Foreign Investment Industries and transfer technology, tariff and import value-added tax will be exempted for imported self-use equipment and its supporting technology, accessories and spare parts with an amount under the aggregate investment, excluding the commodities listed in the Catalogue of Taxable Imported Equipment Used for Foreign Investment Projects. Tariff and import linkage tax will be exempted for imported self-use equipment used for projects with loans from foreign governments and international financial organizations as well as imported equipment which is not priced and provided by the processing trade foreign businessman, excluding the commodities listed in the Catalogue of Taxable Imported Equipment Used for Foreign Investment Projects.
5. Tax refund for reinvestment: Foreign investors of foreign-invested enterprises may directly reinvest the profits gained from the enterprises into such enterprises to increase the registered capital, or use the profits as capital to establish new foreign-invested enterprises. In case the business term of such enterprise is no less than five years, the investor may, upon approval of the application by the tax authority, get a 40% tax refund of the income tax paid on the reinvested amount. Investors who reinvest to establish and expand the export-oriented enterprises or technologically advanced enterprises may obtain a full refund of the enterprise income tax paid on the reinvested amount.
Policies for the Exemption and Reduction of the Land Use Fee
1. Foreign investors who invest to participate in the technical transformation of a state-owned enterprise in which the Chinese enterprise makes a priced investment by transferring the land use right may obtain a refund of up to 70 percent of the paid land transferring fees as state-owned property to make reinvestment.
2. The refund of 70 percent of the land transferring fees paid for the relocation and transformation of the foreign-invested long-established enterprises in urban area, obtained by the Chinese enterprise, may be reinvested as state-owned property to enrich the supporting funds of the Chinese enterprise.
3. For foreign investment projects developed and operated with a land area of over 1,000 mu, a 20 percent discount may be granted for the price of land.
4. A 50 percent discount of land transferring fees may be granted to export-oriented enterprises and technologically advanced enterprises established by foreign investors, but the land cost shall be deducted first.
5. Foreign-invested enterprises that obtain the land use right through land transferring may not pay the land use fee.
6. Administrative and institutional fees will be exempted for foreign investors who invest to transform long-established industrial enterprises. Foreign-invested enterprises in development zones will be exempted from paying administrative and institutional fees as may be determined within the scope of the municipal authority, excluding the price of land.
Policy to encourage foreign investment in Hubei
Encouragement given to foreign-invested enterprises to implement technological development and innovation as well as to enlarge the purchase of homemade equipment.
·Foreign-invested enterprises and research centers will be exempt from import tariff and linking tax of self-application equipment, supporting technology, capital, auxiliaries, replacement parts within the total amount of investment
·The increment value tax of homemade equipment will be fully returned and the income tax of the enterprise will correspondingly cancelled according to relevant regulations provided that the homemade equipment purchased by foreign-invested enterprises are within the total investment amount and are listed in the tax-free directory
·The income of technological transfer of foreign-invested enterprises will be exempt from transaction tax
·The income tax of foreign-invested enterprise will be offset according to 50% of the real amount of technological development that is over 10% higher than last year
Improvement of the management and service of foreign-invested enterprises
·Foreign-invested enterprises that live up to certain terms can be listed in the exchange market of A stock and B stock
·The operation scope of investing agency established by multinational corporations can be enlarged
·The procedures for examination and approval of establishing foreign- invested enterprises will be simplified, namely, all the foreign- invested enterprises not involved in the projects of comprehensive encouragement will be examined and approved by provincial government
·The value appraisal of imported equipment in foreign-invested enterprises will be cancelled
·The policies, regulations and rules against the absorption of foreign investment will be eliminated or adjusted
