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Interim Provisions for Promoting Foreign Investment in Hi-Tech Research and Development and Industrialization Projects in Tianjin
Article 1: This document is formulated in an effort to accelerate the development of hi- techs, promote foreign investment in hi-tech research and development and industrialization projects, and in accordance with the relevant laws, regulations and policies, and also taking into consideration the reality in Tianjin.
Article 2:The hi-techns in this document are referring to the hi-tech studies and industrialization projects that are complying with the development plans of hi-tech industry in Tianjin, and accredited by hi-tech accreditation institutions, which include the on-going studies and projects and those that are planned to be started.
Article 3: The foreign investors in this document are referring to economic organizations or individuals like financial institutions,foundations, companies, etc. from other countries, Hong Kong, Macao, and Taiwan, and domestic economic organizations or individuals who are possessing lawful capitals that can be invested as foreign capitals.
Article 4:Foreign investors shall establish according to the law R&D institutes or business entities to invest in hi-tech R&D studies or industrialization projects. After getting the approval, the foreign investors shall be allowed to set up joint ventures, cooperative enterprises with domestic schools, scientific research institutes, enterprises or other economic organizations or wholly foreign-owned enterprises, to set up R&D institutites or business entities.Such R&D institutes shall be examined by scientific authorities, and approved according to the relevant regulations, and file with Tianjin Bureau of Finance.The business entities shall be examined and approved according to the prevailing regulations on foreign-invested enterprises.
Article 5:The foreign-invested R&D institutes or business entities have autonomy in management, and shall not be intervened by any department or individual.
Article 6:On results of foreign-invested hi-tech studies,applications shall be submitted the the municipal science and technology authorities, whom will entrust qualified institutions for the evaluation.The research results can be transferred domestically or overseas.The results to be transferred overseas can also be evaluated in the transferee countries according to the international practices.
Article 7: The results of foreign-invested hi-tech studies are entitled to equal IPR and other lawful rights and interests as the domestic study results of the same kinds.All parties shall abide strictly by the duty of confidentiality stipulated in the contracts.
Article 8:Foreign-invested hi-tech R&D institutes are entitled to the following preferential policies:
(1)Exemption from business income tax and business tax over the technical service income by transferring technological achievements, and technical trainings, consultation, services and contracting.The exemption of business income tax shall be carried out on an reimbursement basis.The long-term investment income gained from technology investment shall be excluded from the taxable income.
(2)Should products of expanded intermediate experiments be accredited as new products of state level or patent products by municipal science and technology authorities,(those are subject to special regulations shall be accredited by the relevant authorities), the institutes shall be exempted from business income tax over the profit brought by the products for three years since the date of sale;over the profit gained by those accredited as new products of municipal level, institutes shall be exempted from business income tax over the profit brought by the products for two years since the date of sale.
(3)As the equipment for expanded intermediate experiments are more frequently used, after getting the approval from tax authorities, depreciable life can be shortened by 30%-50% of the state regulated standards.
(4)Imported equipment, instruments, chemical reagents and technical materials to be directly used in the hi-tech studies, no tariffs or import duties shall be levied.
(5)The income realized by foreign-invested hi-tech R&D institutes from transferring tangible and intangible assets can be invested as capital in China and abroad after the taxes are paid according to the law.The parts for domestic investment shall be entitled to the relevant prevailing preferential policies for the reinvestment of profits by foreign-invested enterprises. The parts that are to be remitted overseas shall be allowed to be honoured by designated banks after getting the approval from foreign exchange authorities, and no income tax on profit shall be levied during the process of remittance.
(6)The land-transferring fees for the projects of accredited foreign-invested hi-tech R&D institutes paid locally shall be refunded within 3 years since the day of accreditation; no transaction fess or property right registration fees for the purchasing of space for production and operation purposes are needed to be paid. There shall be no charge for increasing the capacity of water supply and drainage as well as gas and power supply; the other lawful charges shall be according to the minimum standards.
Article 9: In order for the foreign investors to invest in hi-tech industrialization projects, they can either choose to set up new foreign-invested enterprises, or choose shareholding, acquisition or purchasing of existing enterprises, and the examination and approval formalities shall be gone through according to the prevailing regulations and procedures.
Article 10: Foreign-invested hi-tech enterprises are entitled to the following preferential policies:
(1)A reduced rate of 15% shall be applied for the business income tax of hi-tech enterprises registered in Tianjin Hi-Tech Park;hi-tech enterprises accredited by relevant institutions that are registered in areas other than Tianjin Hi-Tech Park, the local reserve of their business tax can be handled according to the policies of Tianjin Hi-Tech Park.50% of the local reserve of the newly increased VAT paid by enterprises undertaking major hi-tech industrialization projects shall be extracted by the municipal financial departments for three consecutive years and be added to the municipal science and technology development fund, which will be mainly used for the development of technologies, attracting talents and rewarding business executives.
(2)Should a foreign-invested hi-tech enterprise use its own profits for capital expansion, including increasing directly its own registered capital or investing in another foreign-invested enterprise in Tianjin,if the invested enterprise's remaining operation period is not less than 5 years, the foreign investor shall be refunded of the the business income tax already paid for the re-invested part for the year.If the invested enterprise is a technology-advanced enterprise or export-oriented enterprise, the full amount of the amount mentioned part of tax shall be refunded; in case the invested enterprise does not meet either of the above-mentioned conditions, 40% of the tax shall be refunded.
(3)Within 3 years since the accreditation of foreign-invested hi-tech enterprises, the land transfer fees paid to the local government shall be refunded;no transaction fess or property right registration fees for the purchasing of space for production and operation purposes are needed to be paid. There shall be no charge for increasing the capacity of water supply and drainage as well as gas and power supply; the other lawful charges shall be according to the minimum standards.
(4)The proportions of products sold in China and abroad are not restricted, unless there are relevant state regulations.
(5)In cases where hi-tech achievements are invested as intangible assets, the proportion of the intangible assets can be 35% of the registered capital of enterprises. Should the parties have agreed otherwise, such provision shall prevail.
(6)The value of the hi-tech achievements invested as intangible assets shall be decided by qualified evaluation institutions;or it can be agreed upon between all investing parties,and a written agreement shall be produced for the registration with industrial and commercial authorities.
(7)Enterprises awarded the title of "Advanced Foreign-Invested Technological Enterprise in Tianjin" shall be entitled to favorable treatments for advanced technological enterprises which are not overlapping with provisions of this document.The enterprises up to the standards for export-oriented enterprises shall be entitled to avorable treatments for export-oriented enterprises which are not overlapping with provisions of this document.
Article 11:For the space rented for office, experiment and production purposes by foreign-invested hi-tech R&D institutions and enterprises in TEDA International Incubation Center,Incubation Center of Tianjin Hi-Tech Park and Technology Park of Tianjin Port Free Trade Zone, there shall be no rent for the first year, and discounts on the standard rent shall be offered for the second the third years.
Article 12:In cases where the foreign-invested R&D institutes are to import equipment for self-use and supporting technologies, accessories or parts that are not possible to be produced in China or the those produced in China are not satisfactory,the institutes shall be exempted from tariffs and import duties according to relevant state regulations.And they also shall be exempted from business tax for being transferred of technologies, in accordance with the policies for domestic R&D institutes.
(13)For the technology development of foreign-invested R&D institutes and enterprises, if the actual growth of technology development cost in China of the year over the previous year is 10% or above, with the approval from tax authorities, 50% of the actual cost of the year's technology development shall be deducted from the taxable income of the year.
(14)Foreign investors shall be encouraged to establish intermediary service agencies like hi-tech consultation and information services and foundations, and their lawful rights and interests shall be protected according to the law.
Article 15:In cases where the preferential policies stipulated in articles 8 and 10 are overlapping with the prevailing foreign investment promotion policies, the optimal can be chosen, but no double preference shall be allowed.
Article 16The relevant function departments in Tianjin shall be responsible for the formulation and execution of rule for implementation of the provisions of this document.
Article 17: This document shall go into effect as of the day of release.

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