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Interim Measures of Tianjin Port Free Trade Zone and Airport Economic Area on Encouraging SMEs Investment and Financing Development
Notice on Issuing the Interim Measures on Encouraging SMEs Investment and Financing Development
 
All relevant departments, enterprises and public institutions:
   
To effectively help SMEs solve financing problems, it is resolved to issue Interim Measures on Encouraging SMEs Investment and Financing Development after consulting with the Director Office Meeting of Economic Management Committee. The documents are hereby issued to you for implementation. You are expected to actively and effectively help solve various problems existing in SMEs development and create favorable operation environment for SMEs.
Notice is hereby given.
 
Appendix: Interim Measures on Encouraging SMEs Investment and Financing Development
 
 
August 24, 2011
Appendix:
Interim Measures on Encouraging SMEs Investment and Financing Development
 
Chapter 1 General Provisions
Article 1 These Measures are hereby formulated to effectively help solve financing problems prevailing in SMEs development, promote multi-channel funds raising of SMEs, achieve organic integration of the industry and financing and support the SMEs to be more excellent and stronger.
Article 2 The SMEs enjoying support of applicable polices must register and pay taxes in the Area and meet one of the following standards:
(1) The industrial output (operation income) for last year is not less than RMB 100 mn, and all taxes paid during the year are over RMB 5 million;
 (2) The industrial output (operation income) for last year is not less than RMB 100 mn but higher than RMB 50 mn and all taxes paid during the year are over RMB 2 mn, with an annual increase of over 20%;
 (3) The industrial output (operation income) for last year is not less than RMB 50 mn but higher than RMB 10 mn, with an annual increase of over 30%;
 (4) The technological content leads China or ranks among the best in the world, and the R&D input for the year is not less than 15% of the operation income for the year, for which proper subsidy may be granted as the case may be on basis of assessment and analysis.
Article 3 The Bureau of Finance shall be responsible for the organization and implementation of these Measurers.
 
Chapter 2 Financing Guarantee
Article 4 Establish guarantee association, initiated by the Investment Guarantee Center of the Area together with other powerful guarantee institutions in the Area, and jointly provide guarantee and financing services to SMEs in the Area.
Article 5 Adopt preferential guarantee rate. The annual guarantee rate of Investment Guarantee Center in the Area is 1.2%-2%.
Article 6 Encourage the guarantee institutions and banks to jointly issue a series of innovation products and businesses, e.g. inventory pledge loan guarantee, receivables pledge guarantee, equity pledged loan guarantee, intellectual property guarantee, etc. and ease the shortage of SMEs loan mortgage and pledge.
Article 7 Provide guarantee awards to the guarantors. 0.3% of subsidy will be granted to the part of RMB 50 mn 每 RMB 100 mn of daily balance of annual guarantee by guarantors to SMEs in the Area; 0.5% of subsidy to RMB 100 mn 每 RMB 300 mn and 0.8% of subsidy to over RMB 100 mn; and the maximal annual subsidy is not more than RMB 5 mn.
 
Article 8 Provide the guarantors with subsidy of compensable losses incurred by guarantee to SMEs in the Area. The subsidy amount shall be 15% of the compensable amount, no more than RMB 1 mn each year for each guarantor; and 30% of the compensable amount for the high-tech SMEs listed in Tianjin ※Junior Giant Enterprise Growth Program§, with no more than RMB 1.5 mn each year for each guarantor. 
Article 9  Special guarantor subsidy shall be 0.5% of the guarantee amount, up to RMB 500,000 for each case, for the guarantee to the high-tech SMEs listed in Tianjin ※Junior Giant Enterprise Growth Program§.
 
Chapter III PE and VC Financing
Article 10 100% subsidy will be granted within three years since the year of registration to the PE and VC for the part that disposable financial strength of the Area has been formed from the operation income during investment of the SMEs in the Area; 50% of subsidy will be granted within three years since the year of profitability, to the part of disposable financial strength of the Area from the total profits.
 
Article 11 When PE and VC conduct equity financing for SMEs in the Area and apply for exit, for actual investment loss over 20% of investment amount, compensation will be made at 10% of actual investment amount of the funds, no more than RMB 1 mn, including 80% of equity investment fund compensation and 20% of high-tech enterprise compensation.
Article 12 For SMEs engaged in equity financing through PE and VC, subsidy will be granted at 20% of the current bank loan rate within 3 years after the completion of equity financing, up to RMB 500,000 each year; for high-tech SMEs engaged in equity financing through PE and VC and listed in Tianjin ※Junior Giant Enterprise Growth Program§, subsidy will be granted up to RMB 1 mn each year.
Article 13 In the event that for the SMEs engaged in equity financing through PE and VC, the projects or products have independent intellectual property rights, have leading domestic technologies and product advantages, outstanding industrial position and bright market prospect, the amount of follow-up investment after assessment and verification shall be about 10-30% of the investment amount of the round by PE and VC. For the same SME, the follow-up funds only have one follow-up investment in principle, up to RMB 3 mn.
Article 14 In the event that high-tech SMEs engaged in equity financing through PE and VC have entered into intent investment agreements with equity financing amount of the funds is not less than RMB 1 mn, then up to RMB 100,000 of ※educational§ loana will be granted to cover the incurred earlier expenses in auditing, legal due diligence, etc. and separately calculated in the accounts supervised by the financial authorities. On completion of equity financing of the funds, the amount will be discounted from the subsidy, allowance or the award funds granted by the district financial authorities. The amount that fails to complete fund equity financing will be returned by the enterprises within 1 year, or otherwise will be discounted from development funds of other enterprises supported by the Management Committee.
 
Article 15  In the event that high-tech enterprises engaged in equity financing through PE and VC are listed at Tianjin Equity Exchange and Binhai Equity Exchange with trading amount of over RMB 100 mn and the funds remain holding the shares after equity transfer, RMB 500,000 of award will be granted to the listed enterprises.
Article 16 In the event that high-tech enterprises engaged in equity financing through PE and VC are listed, RMB 1 mn of award will be granted to PE and VC funds for every such enterprise.
 
Chapter IV Direct Listing Financing
Article 17 Encourage qualified enterprises to seek financing by listing. For the successfully transformed enterprises, each will be awarded with RMB 500,000; for the enterprises successfully listed both at home and abroad and with over RMB 1 bn of financing amount, each will be awarded with RMB 3 mn; such enterprise with RMB300 mn 每 RMB 1 bn of financing amount, each will be awarded with RMB 2 mn; such enterprise with RMB 50 mn - RMB 300 mn of financing amount, each will be awarded with RMB 1 mn. The back-door listing enterprises or the listed enterprises transferring their registered address to the Area will be awarded with RMB 2 mn by a lump sum; each sponsor securities company, by recommendation of the enterprises in the Area have successfully listed, will be awarded with RMB 500,000.
Article 18 During the restructuring and listing of the enterprises, the share-holding system transformed enterprises with all the payable taxes and fees arising from the assets assessment increment, capital increase by undistributed profits and change to land, real property and other assets will be compensated and 100% of subsidy will be granted to the dispensable financial strength in the Area.
Article 19 The high-tech enterprises that have passed examination procedures and been successfully listed in Tianjin Equity Exchange will be granted with special subsidy, up to RMB 500,000 equal to 50% of the earlier expenses incurred from accounting, lawyer, sponsor, registered custody, etc.
Chapter V Petty Loan
Article 20  For the petty-loan companies registered in the Area, the operating income that forms the disposable financial strength in the Area will be granted with 100% of subsidy within two years after registration and 50% of subsidy within three years thereafter; and the total profits that forms the disposable financial strength in the Area will be granted with 100% of subsidy within two years after registration and 50% of subsidy within three years thereafter.
Article 21 The petty-loan institutions that provide loans to SMEs in the Area shall be granted corresponding risk compensations. The part of annual loan with average daily balance of RMB 50 mn 每 RMB 100 mn will be granted with 0.3% of subsidy; the part of RMB 100 mn 每 RMB 300 mn with 0.5% of subsidy; and the part of over RMB 300 mn with 0.8% of subsidy. The max annual subsidy amount is not over RMB 5 million.
 
Chapter 6 Loan Interests
Article 22 The SMEs in line with the industrial orientation of the Area will be granted with 3-year loan interest with certain ratio at the rate set by loan contract (up to the current benchmark rate of the bank, excluding penalty interest and other irregular expenses), up to RMB 3 mn of interest subsidy for the same SME.
Article 22 Enterprises with large amount of receivables are supported to liquidize the receivables through credit insurance institutions and acquire loan financing from the bank through the receivables policies and provided with 50% of credit investigation fees subsidy and 50% of premium subsidy as well as 20% - 40% of interest subsidy at benchmark rate.
Article 23 The part of average loan balance provided by banks and other financial institutions in the Area for the high-tech enterprises in the Area, a YoY increase of 15% will be awarded at some percentage, up to RMB 2 mn.
 
Chapter VII Enterprise Bonds, R&D Liabilities Insurance and Financing Lease
Article 24 The qualified enterprises are supported to finance by issuing short-term financing bills, medium-term notes, corporate bonds, SME collected debt, etc. and granted with 20% of subsidy, up to RMB 1 mn, for management fees, guarantee fees, consulting fees and other comprehensive costs incurred in providing service to the third party during the financing according to effective financing size.
Article 25 The enterprises are encouraged to purchase product R&D liabilities insurance, key R&D facilities insurance, operation interruption insurance, credit insurance, health insurance of senior officers and key R&D personnel, accident insurance and other insurance services. Premium subsidy will be granted to enterprises for test of the first major technological equipment researched and developed, with the subsidy amount no more than 60% of the total premium. The maximal term of one-time insurance of the enterprises is two years, renewed every year or every 2 years.
 
Article 26 It is encouraged to use the first (set) major technological equipment product made in the Area. For the first (set) major technological equipment product which has gone through successful test, demonstration project application and verification, users in the City may apply to the Management Committee for risk subsidy, with the subsidy amount no more than 10% of the equipment price.  
Article 27 The SMEs are encouraged to conduct lease-after-sale of factories and purchase the R&D production equipment, etc. through financing lease; and 1%, up to RMB 1 mn, of award for expenses incurred from financing lease will be provided.
Article 28 The credit rating institutions will be awarded with RMB 100,000 for rating over 20 SMEs in the Area and each with over RMB 100 mn of financing amount for the year; and the credit rating institutions will be awarded with RMB 200,000 for rating over 50 SMEs in the Area and each with over RMB 200 mn of financing amount for the year.
 
Chapter VIII Supplemental Provisions
Article 29 To verify filing and apply for various subsidies and awards, relevant enterprises and institutions shall submit materials factually. In case of cheating for funds with fraudulent materials, the Management Committee will claim relevant funds, persecute by law for relevant liabilities and cancel the qualifications of enjoying these Measures.
Article 30 Any inconsistency with the former promulgation vision by the Management Committee shall be subject to these Measures.
Article 31 These Measures shall be interpreted by the Finance Bureau of Tianjin Port Free Trade Zone.

Article 32 These Measures shall start operation from the date of promulgation.

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