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Interim Procedures on Supporting and Encouraging the Investment and Financing of SMEs by Tianjin Port Free Trade Zone /Airport Economic Area

  To: all relevant departments,enterprise and public institutions

  In order to provide actual help with the SMEs to overcome the difficulty of financing, the Directer Office of the Administration Committee has discussed and decided to publish and implement the "Interim Procedures on Supporting and Encouraging the Investment and Financing of SMEs". Weare distributing the file to you, please comply with it, and provide your help to SMEs to solve the various difficulties they have during the process of development, and create a sound business environment for their development.

  Attachment: "Interim Procedures on Supporting and Encouraging the Investment and Financing of SMEs"

  August 24th, 2011

  Attachment:

  Interim Procedures on Supporting and Encouraging the Investment and Financing of SMEs

  Chapter I General Provisions

  Article 1:This document is formulated in an effort to provide actual ahelp to SMEs to solve the prevailing financing difficulties, urge the SMEs to raise fund through multiple channels, integrate the industries and finance, and help the SMEs to grow and flourish.

  Article 2: The supportive policies are applicable to SMEs registered in our area, and those who have paid their taxes; meanwhile, one of the following standards should be met:

  (1) The industrial output or business revenue of the previous year is no less than RMB100 million, and the taxes paid of the year is more than RMB5 million;

  (2) The industrial output or business revenue of the previous year is between RMB 50 and 100 million, and the taxes paid of the year is more than RMB2 million, and the yearly growth is over 20%;

  (3)The industrial output or business revenue of the previous year is between RMB 1 and 5 million, with a growth rate of over 30%;

  (4)The technological content is on a leading position in China, or of advanced level in the world; the R&D investment is not lower than 15% of the year's business revenue. In such cases, after evaluation and demonstration,relevant subsidies can be given according to the circumstances.

  Article 3:The Financial Bureau is responsible for the organization and implementation of the procedures.

  Chapter II Financing Guarantee

  Article 4:The Investment Guarantee Center of our area will take the lead and join efforts with other capable guarantee agencies to establish a guarantee association, and provide financing guarantee service to the SMEs in our area.

  Article 5: Favorable guarantee fee will be adopted.The guarantee rate of the guarantee center invested by our are is 1.2-2%.

  Article 6: The guarantee agencies are encouraged to cooperate with banks and jointly introduce new products and services, such as inventory pledge guarantee, accounts receivable pledge guarantee, equity pledge guarantee, intellectual property rights (IPR) guarantee, and so on, so as to relief the problem of insufficient pledge of the loans for SMEs.

  Article 7: The guarantee agencies are to be granted rewards.To the agencies that have provided guarantee service to the SMEs in our area, a 0.3% subsidy is granted for the part of daily average balance over the year between RMB50 and 100 million; a 0.5% subsidy is granted for the RMB100-300 part; and a 0.8% subsidy for the part exceeding RMB300 million;the yearly subsidy should be no more than RMB5 million.

  Article 8:For the compensatory losses occurred while providing guarantee service to the SMEs in our area, the guarantee agencies will receive a subsidy of 15% of the compensatory amount, and the highest subsidy amount for a guarantee agency is RMB1 million;for the guarantee services for the technological SMEs chosen by Tianjin "Little Giant" program, the subsidy is 30% of the compensatory amount, and the top subsidy amount for a guarantee agency is RMB1.5 million.

  Article 9: For the guarantee services for the technological SMEs chosen by Tianjin "Little Giant" program,a special subsidy of 0.5% of the guarantee amount is granted to the guarantee agency,and the top subsidy amount of each transaction is RMB 500,000.

  Article 10: Subsidies equalling to 100% of the disposable financial resources of our area which was brought by PEs and VCs' investing in SMEs in our area shall be granted for three years since the registration;and 50% subsidy of the disposable financial resources of our area which was brought by the total profit shall be granted.

  Article 11:At the application for equity exit of PEs and VCs' providing equity financing for SMEs in our area, they shall be compensated for 10% of the actual investment of the equities in cases where the actual losses is more than 20% of the actual investment, and the maximum compensation is RMB1 million, among which 80% shall be compensated to the equity funds, and 20% shall be for the technological enterprises.

  Article 12:SMEs financed by PEs or VCs shall be entitled to subsidies equalling to 20% of the bank loan interest rate of the same period within three years since the completion of equity financing, and the maximum yearly subsidy is RMB500,000;for the technological SMEs financed by PEs or VCs that are included in the "Little Giant" program, the maximum yearly subsidy is RMB1 million.

  Article 13:If SMEs financed by PEs or VCs have independent IPR for the their projects or products, domestically advanced technologies and product advantages,prominent status in the industry and broad market prospects,shall there be additional investment after evaluation and affirmation,the amount of additional investment shall be 10-30% of the original PEs and VC investment. For the same SME, the additional investment shall not exceed RMB 3 million on principle every time.

  Article 14:Technological SMEs financed by PEs and VCs shall be entitled to "student"loans of not more than RMB100,000 to cover the upfront expenses like audition and legal due diligence, etc., if the intentional investment agreement has been signed, and and the amount of equity financing is not lower than RMB1 million, and the loan shall be accounted for separately in the financial supervision accounts.After the equity financing if completed, the amounts shall be deducted from the subsidies or rewards from the local fiscal departments.For the equity financing that can not be completed, the subsidies shall be returned by the enterprises within one year; if this cannot be accomplished, deduction shall be made from the other enterprise development funds supported by the Administrative Committee.

  Article 15:To technological SMEs financed by PEs and VCs listed for trading in Tianjin Equity Exchange and Binhai Equity Exchange, if the transaction amounts are exceeding RMB100 million, and the PEs and VCs are still holding shares after the equity is listed for transfer, a one-time reward of RMB500,000 shall be granted.

  Article 16:If the technological enterprises financed by PEs and VCs in our area are successfully listed in the stock markets, the PEs and VCs shall be rewarded RMB 1 million for each of such enterprises.

  Article 17: Qualified enterprises are encouraged to go public. Every enterprise that has restructured successfully shall be rewarded RMB500,000;enterprises successfully listed in overseas markets with financing amounts of over RMB1 billion shall be rewarded RMB3 million; financing amounts between RMB300 million and 1 billion shall be rewarded RMB2 million; financing amounts between RMB50 million and 300 million shall be rewarded RMB1 million.One-time rewards of RMB2 million shall be given to enterprises going public through buying a shell or moving the registration of a listed company of our area;the host brokers who have successfully recommended for the listing of enterprises in our area will be rewarded RMB500,000 for every enterprise recommended.

  Article 18:Subsidies equalling to 100% of the disposable financial resources of our area brought by assets assessment appreciation,share capital increase from undistributed profits, and tax payments during the assets changes like houses changes shall be given to the restructured joint-stock enterprises during the process of restructuring and going public.

  Article 19:Special subsidies equalling to 50% of the upfront expenses like actual accounting, legal, recommendation, registration and custodian expenses to the technological enterprises that have passed the examinations and are successfully listed in Tianjin Equity Exchange, and the maximum subsidy is RMB 500,000 for an enterprise.

  Article 20: Small loan companies registered in our area shall be entitled to subsidies equalling to 100% of the disposable financial resources brought by their revenues for two years since registration, and 50% of the amount for the following three years;and subsidies equalling to 100% of the disposable financial resources brought by their total profits for two years since registration, and 50% of the amount for the following three years.

  Article 21:Small loan companies providing loans for the SMEs in our area shall be entitled to compensations for their risks.A 0.3% subsidy shall be given for the RMB50-100 million parts of daily average loan for the year; and 0.5% for the RMB100-300 million parts; and 0.8% for the parts above RMB300 million.The annual maximum subsidy shall be RMB5 million.

  Article 22: To SMEs that are in accordance with the industrial guidelines of our area, certain discounts shall be given on the the loan interest rate stipulated in the contracts (no higher than the current bank benchmark interest rate and excluding abnormal spedning like for three years punitive interests) for three years, and the the total amount of interest discount for the same SME shall not exceed RMB 3 million.

  Article 23:Enterprises with large amounts of accounts receivable are supported to liquidize the accounts receivable with the help of credit insurance agencies, and they are supported to get bank loans with insurance policies of accounts receivable, and 50% subsidies shall be given for the credit investigation cost, and 50% of the premium, as well as a 20-40% interest subsidy of the benchmark interest.

  Article 24:Rewards shall be given according to a certain proportion to the loans granted to the technological enterprises granted by financial institutions in our area like banks, for the parts exceeding 15% of the year-on-year growth of average loan balances,and the yearly highest reward shall be no more than RMB2 million.

  Chapter VII: Corporate bonds, R&D Liability Insurance and Financial Leasing

  Article 25: Qualified enterprises shall be supported to finance by ways of issuing short - term financing bonds, medium-term notes, corporate bonds, SME debt collection, etc.According to the scale of financial capital funded, a 20% subsidy shall be provided for the composite costs including management fees, guarantee fees, consultant fees, etc paid to third parties during to the process of financing, and the maximum subsidy is RMB1 million.

  Article 26: Enterprises are supported to purchase insurance services like product R&D liability insurance, insurance for key R&D equipment,business interruption insurance, group health insurance for senior executives and key R&D personnel, accident insurance, and so on. Enterprises shall be subsidized for no more than 60% of the total premium for experimenting the first (sets of ) major technical equipment.The insurance period of enterprises shall be no longer than 2 years every time, and the insurance can be purchased every year or every other year.

  Article 27:The usage of first (sets of )major technical equipment produced in our area is encouraged. The users in Tianjin can apply to the Administrative Committee for the risk subsidies for using the first (sets of )major technical equipment that are experimented, successfully used in demonstration projects and affirmed, and the highest amount subsidy is 10% of the equipment prices.

  Article 28:SMEs are encouraged to lease back workshops after selling, purchase R&D and production equipment by way of financial leasing, and they shall be subsidized for 1% of the financial leasing cost, with an maximum amount of RMB1 million.

  Article 30:Rating agencies that have rated more than 20 SMEs in our area within a year, if more than RMB 100 million has been financed for the year by the enterprises rated, shall be rewarded RMB100,000; those who have rated more than 50 SMEs, if more than RMB 200 million has been financed for the year by the enterprises rated, shall be rewarded RMB200,000.

  Article 30: The relevant enterprises and organizations should submit materials faithfully for recognition and filing, as well as applying for all kinds of subsidies. Those who should prepare false materials to defraud the funds, the Administrative Committee shall retrieve the funds; criminal liability shall be investigated for according to law, and the defrauding party shall be disqualified for our procedures.

  Article 31: Shall there be inconformity between this and former documents issued by the Administrative Committee, this document shall prevail.

  Article 32: The Financial Bureau of Tianjin Port Free Trade Zone is responsible for the explanation of the procedures.

  Article 33: The procedures shall go into effect as of the day of issuance.

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