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Notification on Distribution of "Some Advice on Promotion of Service Outsourcing in Tianjin"

Document of Tianjin Municipal People's Government
Jin Zheng Fa No.¡²2007¡³012


Notification on Distribution of "Some Advice on Promotion of Service Outsourcing in Tianjin"



District and county governments, committees, bureaus and affiliated institutions:


We are hereby distributing to you "Some Advice on Promotion of Service Outsourcing in Tianjin", please organize the implementation.

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July 26th, 2007


Some Advice on Promotion of Service Outsourcing in Tianjin
Service outsourcing is a new trend of the current international industrial transfer. Undertaking actively the tasks of international service outsourcing and developing the service outsourcing industry is an important part of Tianjin's integration with international economy and fostering international competitiveness, an important way to optimize the economic structure and to transform the growth mode of foreign trade, which bears significant meaning to the development and opening-up of Binhai New Area and to realize the orientation of our city. Tianjin has strong scientific and technological capabilities, rich in human resources, and has an economy that is highly export-oriented. As a result, Tianjin has advantages in undertaking large international service outsourcing projects. In an effort to grasp the opportunity of fast development of international service outsourcing, we hereby give our Advice on in Tianjin:
1.Guiding ideology, targets and focal points of promoting service outsourcing
Guiding ideology.To fully apply the Scientific Outlook on Development, adhere to the development guideline that is led by internationalization, promoted by marketization, supported by informationization, and guaranteed by legalization; taking the opportunity of the development and opening-up of Binhai New Area, and the breakthrough of system and mechanism innovation, to strengthen the guidance of government and focusing of policies, promoted the integration and interaction of service outsourcing with other industries, accelerate the construction of a service outsourcing system that is suitable for the international port city, in an effort to achieve the great-leap-forward development of the service outsourcing industry in Tianjin.
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(1)Targets. Making service outsourcing the focus of economic and social developments in Tianjin during the "Twelfth Five-Year" period. By striving to develop service outsourcing,lift the energy level of service outsourcing,and promote the optimization of economic structure;strive to create a cluster of service outsourcing industry that is concentrated and distinct;introduce a group of Chinese and international large service outsourcing enterprises, foster some leading local enterprises with independent IPR and proprietary brands, and build up Tianjin as a world-class service outsourcing base.
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By 2010, the business volume and export value of service outsourcing in Tianjin will quadruple that of 2005.There will be 160,000 employees in the industry, and 3 to 5 large leading enterprises with sales volume of over RMB 1 billion and 50 enterprises with sales volume of over RMB100 million will be introduced and fostered.
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(3)Focal points.By focusing on developing off-shore service outsourcing, foster a group of enterprises that are capable of undertaking service outsourcing projects from multi-national companies;by focusing on the high-end market, consolidate and develop the service outsourcing for the Japanese and Korean markets, and expand the European and American markets;by focusing on creating demonstration service outsourcing areas with reasonable layout and clear division of labour,promote the construction of service outsourcing clusters like Tianjin Economic and Technology Development Area, Tianjin Hi-Tech Park and Tianjin Port Free Trade Zone, carry out the planning of service outsourcing areas like Tianjin Binhai Hi-Tech Industrial Development Area and Dongjiang Port Free Trade Zone from a high starting point; focusing on the target industries, accelerate the progress of application software development and outsourcing facing industries like shipping, logistics, finance, insurance, education, healthcare,tourism, informationization of city public administration like cyber information security, social credit system,social security system, business process outsourcing of back-office-services like banking, insurance,financing and human resource,outsourcing of system operation services and technical support management services,outsourcing of R&D and designing,outsourcing of game and animation;focusing on improving the quality of service outsourcing employees, accelerate the construction of training bases, expand the scale of participation, and train a group of high-level talents for service outsourcing.

2.To integrate the advantageous resources, and create service outsourcing clusters from high starting points.
¡¡ (4)To make development plans for the service outsourcing industry. Development plans for the service outsourcing industry of Tianjin will be made quickly, specifying the focal areas and procedures, leaving sufficient space for the development of city infrastructure like land, telecommunication, traffic and so on,to realize the high integration of technology, human resource and policy resources. All districts, counties and economic areas should integrate resources according to the overall plans, play full use of the comparative advantages, make individual development plans, and specify the focal points for development.
(5)To accelerate the innovation of service outsourcing system.Basing on the thorough implementation of comprehensive innovation test scheme of Binhai New Area, and combining with the development direction of the service outsourcing in Tianjin, the relevant departments are to issue new innovative measures in market-access, customs supervision, foreign exchange control,planning and security,protection of IPR,tax incentives, talent training and so on, and to create a policy system to promote the development of service outsourcing in a way that is easy and efficient, and is up to international practice.
¡¡ (6)To create and define service outsourcing demonstration areas. Standards are to be set for the outsourcing demonstration demonstration areas and parks, so as to guide enterprises in this industry to cluster in such places. The goal is to help establish 5 service outsourcing demonstration areas within 3 years,and the districts and counties are encouraged and guided to exploit their own regional advantages,to build 10 service outsourcing park with different characteristics.The relevant departments under the Municipal Government are to define such service outsourcing clusters as demonstration areas and parks.
¡¡ (7)To raise funds in Tianjin to support the service outsourcing industry.From now till the year 2010, the total annual capital invested to the service outsourcing industry shall be no less than RMB200 million, among which a special fund for the development of service outsourcing will be allocated from the fiscal funds by the Municipal Government every year, focusing on supporting the training of fresh university graduates and college students on service outsourcing; while special funds given by departments like Tianjin Commission of Commerce, Tianjin Commission of Reform and Development, Tianjin Science and Technology Committee, Tianjin Information Office,Tianjin Bureau of Intellectual Property Rights are to be partly used for supporting the international certification of service outsourcing enterprises,certification of enterprises and products, market development, establishing public service platforms for information,technical support and IPR for such enterprises, as well as rewarding IPR projects in service outsourcing business that have brought significant social or economic benefits.
3.To support the development of the industry, and increase the competitiveness of enterprises.
(8)To relax the market-access for the service outsourcing
enterprises. Service outsourcing enterprises are to get easier approval and registration with industrial and commercial authorities, in order to facilitate them to undertake service outsourcing business according to international practice.
(9)To provide supportive policies like fiscal policies for the service outsourcing enterprises.
¡¡¡¡A. For the service outsourcing enterprises established in Binhai New Area that are accredited by the municipal science and technology authorities as hi-tech enterprises, the business income tax rate is reduced to 15%.
B.For the service outsourcing enterprises established in Tianjin Hi-Tech Park that are accredited by the municipal science and technology authorities as hi-tech enterprises, the business income tax rate is reduced to 15%; for the newly established domestic enterprises and joint ventures of such kind will be exempted from business income tax for 2 years since the profit-making year.
¡¡C.For the newly established domestic enterprises in the field of outsourcing of application software development, the regulation in "Notification on Some Preferential Policies of Business Income Tax"(Cai Shui Zi No.¡²1994¡³£±)can be applicable ¡ª¡ª "For the newly established enterprises or business units that are financially independent, and are doing business in consultation, information or technical services, since the opening day, the enterprises or business units are exempted from business income tax for the first and second years."
D.For the headquarters or regional headquarters of service outsourcing enterprises that are newly set up in Tianjin, for the first 2 years since opening, the business tax paid will be fully refunded by the fiscal department of the same level, and for the following 3 years, 50% of the business tax will be refundable;for 2 years since the profit-making year, the local reserve of the business income tax will be refunded by the fiscal department of the same level, and 50% will be refunded for the following 3 years.For the newly purchased or constructed office space for self-use, no contact tax needs to be paid, and the exemption of property tax will be granted for 3 years.
E.For the famous domestic and international talent agencies for the service outsourcing industry that are newly established in Tianjin, for 2 years since the year of opening,the business tax will be fully refunded, and 50% will be refunded for the following 2 years;for 2 years since the year of opening,the local reserve of business income tax will be fully refunded, and 50% will be refunded for the following 2 years
F.For the newly established enterprises in Tianjin that are accreditedas providers of professional information services,for 3 years since the year of opening,the business tax will be fully refunded, and 50% will be refunded for the following 3 years; for 3 years since the profit-making year,the local reserve of business income tax will be fully refunded, and 50% will be refunded for the following 3 years.
G.For the training institutions newly established in Tianjin that are providing professional technical training for the service outsourcing industry, for 3 years since the year of opening, 50% of the business tax will be refunded;and 3 years since the profit-making years, 50% of the local reserve of business income tax is refundable.
H.The senior managers hired by service outsourcing headquarters or regional headquarters from abroad, 50% of the local reserve of the managers' personal income tax paid will be rewarded to them, and the maximum reward period is 5 years.¡¡¡¡I.For the office space purchased or constructed for self-use by newly established service outsourcing headquarters or regional headquarters in Tianjin, a one-time subsidy of RMB1,000 per m2 is given;for the leased office space for self-use, 30% of the rent will be granted as a subsidy for the first three years.In cases where the rent is higher than the market guidance rent, the base number should be the market guidance rent.
¡¡J.For the office space purchased or constructed for self-use by newly established famous domestic and international talent agencies for the service outsourcing industry in Tianjin, a one-time subsidy of RMB1,000 per m2 is given£»for the leased office space for self-use, 10% of the rent will be granted as a subsidy for the first three years.In cases where the rent is higher than the market guidance rent, the base number should be the market guidance rent.
K.A one-time subsidy will be given to service outsourcing headquarters or regional headquarters established in Tianjin that are mainly undertaking off-shore service outsourcing projects.The amount of subsidy is RMB20 million for registered capital of RMB1 billion and above; RMB15 million for registered capital of RMB500 million (incl.) to RMB 1 billion;and RMB10 million for registered capital of RMB100 million (incl.) to RMB 500 million.
¡¡L.A one-time subsidy will be given to financial service outsourcing enterprises established in Tianjin.The amount of the subsidy is 3% of the registered capital (or operating capital), and the maximum amount is RMB5 million.For those without independent legal person qualification and whose registered capital is above RMB200 million, a subsidy of RMB5 million is given; RMB3 million is given for registered capital of RMB100 (incl.) to 200 million; and RMB1 million is given for registered capital of RMB50(incl.) to 100 million.
¡¡M.The depreciable life of fixed assets of service outsourcing enterprises in Binhai New Area, (not including houses or buildings) can be reduced by no more than 40% of the regulated.
N.The amortization of intangible assets vested or invested by service outsourcing enterprises in Binhai New Area can be reduced by no more than 40% of the regulated.But in cases where there is a service life of the intangible assets that is stipulated in contracts or agreements, what has been agreed shall prevail.
O.The technical cost is deductable pretax for the development of new products, technologies and techniques with independent IPR by service outsourcing enterprises.For the actual cost for new product design, process regulations,equipment adjustment, trial production of raw material and semi-finished products,technical materials,intermediate experiments that are not included in the state plans, salary of research staff in relevant institutions,depreciation of equipment used for R&D,charges for entrusting other institutions or individuals for the research and trial production,and other cost directly related to the trial production and technical research, on top of the 100% pretax deduction, another 50% of the actual cost is allowed to be deducted pre business income tax.
P.The cost of equipment used by domestics service outsourcing enterprises, which is lower than RMB300,000, can be entered into the account as cost in a lump sum or by several times, and is subject to pre business income tax deduction.The equipment that is up to the standards of fixed assets should be managed separately, and there will be no extraction of depreciation;for those worthing more than RMB300,000,accelerated depreciation is allowed by double-declining-balance method or sum-of-the-years-digits method.
¡¡For the purchase of software by foreign-invested service outsourcing enterprises, if the cost is up to the standards for fixed assets or makes them intangible assets, the depreciation or amortization can be shortened reasonably, and the minimum period is 2 years.
¡¡Q.For the revenue realized by qualified service outsourcing enterprises over technology transfer, and the technical consultation,services and training during the process, if the yearly net revenue is below RMB300,000, the enterprises shall be exempted from business income tax.
R.For the employee education expenses extracted and used at the service outsourcing enterprises, if the expenses are not more than 2.5% of the gross salary, they are deductable pre business income tax.
In cases where two or more preferential policies are applicable to an enterprise, a selection can be made according to the benefits, but no double preference shall be allowed.
(10)To provide supportive funds for the service outsourcing enterprises. All relevant departments shall further optimize the expenditure structure of all special funds, and increase year by year the proportion of support for the development of service outsourcing;the service outsourcing enterprises from Tianjin shall be helped to get supportive funds from relevant state departments, whom should have priority for the application;service outsourcing enterprises shall also have priority with the international market development fund for SMEs.
(11)To provide service outsourcing enterprises with financing support.Service outsourcing enterprises shall be encouraged to accelerate their development and growth through asset restructuring, acquisition, merger and listing domestically and abroad.
(12)To provide financial support to service outsourcing enterprises to obtain international certification. The obtaining of international certification includes getting the certification or upgrading within the year, and maintaining and improving the certification during the 2 years that follow, and financial support can be applied for after getting each level of certification; on principle, the amount of subsidy shall be no more than 50% of the cost of getting the certification, and the maximum amount is RMB500,000.The international certifications include: Capability Maturity Model Integration(CMMI), Capability Maturity Model(CMM),People Capability Maturity Model (PCMM),Information Security Management System (ISO27001£¯BS7799),IT Service Management£¨ISO20000£©,Service Provider Environment Safety (SAS70) and so on.
(13)To support service outsourcing enterprises to develop international markets."Bohai Rim Service Outsourcing Fair" will be held.Financial support for service outsourcing enterprises to participate in international investment promotion meeting and professional exhibitions,and on principle, that more than 50% of the participation expenses shall be compensated.The existing overseas channels shall be utilized, especially the overseas Chinese and students shall be organized to established the international service outsourcing network.
(14)To support the brand building of service outsourcing enterprises.Such enterprises are encouraged to build their own brands. For those complying with the relevant regulations of state and municipal level, brand building subsidies from the state and municipal level shall be granted.Service outsourcing enterprises are also encouraged to build their own IPR, and financial support shall be given to their patent application.
(15)To provide better infrastructure for service outsourcing enterprises.Service outsourcing demonstration areas shall strive to be able to provide double circuit power supply, house generators,double backup network system and international data ports with sufficient bandwidth.Conditions shall be actively created for establishing public bonded test centers or bonded laboratories under the customs supervision in service outsourcing demonstration areas, or public bonded test centers in large enterprises.
(16)To provide easy foreign exchange services to service outsourcing enterprises.According to the needs, services to service outsourcing enterprises can open foreign exchange current accounts.The authorities shall relax the administration over such accounts, and the foreign exchange earnings shall be allowed to be fully retained;when there is not enough foreign exchange funds, basing on the needs, foreign exchanges can be purchased and be deposited to the foreign exchange current accounts.
(17)To give preferential social security policies to service outsourcing enterprises.For the newly established service outsourcing enterprises, under the conditions of social security registration being finished within the time limit, and the declaration and payment of social security fees done monthly, a policy of preferential social security fee shall be granted to the enterprises for 3 years. There shall be a 3% discount for the first year, and 2% for the second year, and 1% for the third year.For those service outsourcing enterprises buying working injury insurance,the rate can be set at the baseline rate for first-class enterprises.
4.To enhance the education,train and introduce talents for the service outsourcing industry.
(18) To accelerate the construction of service outsourcing courses at universities.The advantages of having a lot of universities and experts shall be brought into full play,and the relevant academic resources shall be consolidated, and the research direction of service outsourcing shall be set up.In the relevant university courses, there shall be more lecturing about service outsourcing, and more training of such skills.The construction of high-level courses like international trade, international finance, business administration, designing art,development and application of computer software, medication and foreign languages, in an effort to provide intellectual support to the service outsourcing industry.
(19)To build training bases of service outsourcing.Training funds shall be allocated from the special funds of the local governments for the training of talents in the filed of service outsourcing; the function of Tianjin talent development fund shall be expanded, in order to support the establishment of service outsourcing comprehensive training and test bases that are connecting schools and enterprises;the existing public training bases will be fully utilized and improved for the training of talents with practical skills and entrepreneur spirits, whom are urgently needed by service outsourcing enterprises;world-famous training institutions and large enterprises shall be encouraged to give service outsourcing trainings in Tianjin, focusing on training high and medium level talents specialising in R&D, management and market development, which are facing the Japanese, Korean, European and American markets.
(20)To encourage various kinds of trainings for service outsourcing talents.Enterprises shall be encouraged to give pre-job training for new employees and tailored training,personnel qualification, international certification, relevant laws, industrial standards and IPR trainings.The employment project of university graduates shall be combined with the development plans of service outsourcing, and effective measures shall be taken to encourage university graduates'participation in the service outsourcing trainings, vacation internships and work-study programs, so as to increase their employment opportunities.Joint training programs between universities and enterprises, after getting the recognition of relevant departments,subsidies of no more than 85% of the training fees shall be given to fresh university,junior college graduates and the graduates who are not yet employed;other newly employed staff who have participated in service outsourcing trainings shall be subsidized with no more than 50% of the training fees. The remaining 15% of the training fees for fresh university graduates and graduates who are not yet employed shall be refunded by the local governments after their passing the exams.
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£¨21£©To attract high-level service outsourcing talents to serve or start businesses in Tianjin.Such talents shall be listed as as main targets to be attracted all around Tianjin, and convenience shall be given to them in the control of census registration, immigration control, education of children and healthcare, and so on.Senior talents starting service outsourcing enterprises in Tianjin are allowed to apply for the support of Tianjin venture capital fund, start-up funding and discount loans from financial institutions entrusted by Tianjin Talent Development Fund. The residence permit system for talents shall be introduced. The conditions for getting residence permits for talents introduced to Tianjin: persons hired by service outsourcing departments with bachelor's degree or a background of higher education, or persons who have obtained intermediate or higher professional and technical titles;or persons who have won national patents as the result of their research, and the patents have been adopted by Tianjin; or talents from home and abroad who are urgently needed by the potential employers, specializing in certain industries or fields,and who have been co-certified by relevant departments or trade associations that are organized by Tianjin Bureau of Personnel. The talents who have got the residence permit will be able to enjoy the preferential policies in Tianjin in professional title assessment £¨examination),talent rewards, commercialization of research findings, social insurance, payment for provident fund, admission into kindergartens and schools of children, purchases of houses and automobiles, taxation, and so on.The function of recruitment agencies shall be brought into full play, and they should provide to the service outsourcing talents services like personnel agency, talent dispatch, talent assessment, talent recommendation, headhunting and human resource management consultation, etc.
5.To strengthen organization and leadership, and create high-quality environment for the development of service outsourcing¡¡¡¡
(22)To organize the leading group of service outsourcing promotion. The deputy mayor in charge shall be the group leader, deputy secretary general of the Municipal Government and chief leading comrades of Tianjin Commission of Commerce shall be deputy group leaders. The group members shall be composed of leading comrades from Tianjin Commission of Commerce, Tianjin Commission of Development and Reform, Tianjin Economic Committee, Tianjin Committee of Science and Technology, Tianjin Committee of Education, Tianjin Administrative Committee of Binhai New Area, Tianjin Information Office, Tianjin Bureau of Finance, Tianjin Local Tax Bureau, Tianjin Bureau of Industry and Commerce, Tianjin Bureau of Personnel, Tianjin Bureau of Labour and Social Security, Tianjin Planning Bureau, Tianjin Bureau of Land Resources and Housing Administration,Tianjin Public Security Bureau,Tianjin Banking Bureau, Tianjin Intellectual Property Bureau,Tianjin Copyright Bureau, Tianjin Bureau of Quality Supervision, Tianjin Statistics Bureau, Tianjin Customs, Tianjin State Tax Bureau, Tianjin Administration of Foreign Exchange, Tianjin Communications Administration, Administrative Committee of Tianjin Economic and Technology Development Area, Administrative Committee of Tianjin Port Free Trade Zone, Administrative Committee of Tianjin Hi-Tech Park, and so on.There is an office under the leading group, which is located in Tianjin Commission of Commerce.The leading group and its office shall hold regular meetings to study and coordinate the major issues of the development of service outsourcing in Tianjin.
£¨23)To innovate the governmental administration mode. An operation mode in which the government guides and promotes, the industry self-discipline and self-supervises, and the enterprises operate according to the law. Policies and regulations on promoting the development of service outsourcing shall be formulated and improved, industrial standards shall be set up and completed,the market order shall be standardized, and the service quality shall be improved.Industrial associations shall be established in service outsourcing enterprises, which shall provide information consultation,market development and talent training, and so on.
£¨24)To better protect IPR of service outsourcing.IPR protection shall be strengthened, and infringement of IPR shall be fought against according to the law, in an effort to create a sound business environment for the service outsourcing enterprises.The formulation of a series of policies and regulations for the patent protection in Tianjin is to be accelerated. We will bring the function of Tianjin Report and Complaint Service Center of IPR Protection into full play, utilize effectively the report and complaint hotline of IPR protection, step up efforts to fight against IPR infringement, and help and guidance the service outsourcing enterprises to establish IPR management systems.
£¨25)To provide high-efficiency information services for the service outsourcing enterprises.Service outsourcing information network and exchange platforms are to be established, and more studies will be carried out on the subject, so as to get informed of the needs of the service outsourcing enterprises in a timely manner.Various media channels like government websites, TV and radio broadcast shall be utilized to provide information services for the service outsourcing enterprises.
£¨26)To establish the statistical indicator system for service outsourcing.The system shall be studied and established, and a statistical system for service outsourcing shall be implemented step by step, to provide reliable basis for the decision-making on the development of service outsourcing in China and Tianjin.

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