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1986.12.20
JIANGSU PROVINCE
ADMINISTRATIVE PROVISIONS OF JIANGSU PROVINCE ON ECONOMIC AND
TECHNOLOGICAL DEVELOPMENT ZONES
(Approved 20 December 1986 by the 23rd Session of the Standing
Committee of the 6th Jiangsu Provincial People's Congress)
CONTENTS
CHAPTER I GENERAL PRINCIPLES
CHAPTER II ADMINISTRATION
CHAPTER III REGISTRATION AND BUSINESS OPERATIONS
CHAPTER IV PREFERENTIAL TREATMENT
CHAPTER V SUPPLEMENTARY PRINCIPLES
CHAPTER I GENERAL PRINCIPLES
@@ Article 1. These Provisions are formulated in accordance
with the Constitution of the People's Republic of China and other
relevant laws and statutory regulations.
@@ Article 2. These Provisions shall apply to any
Economic and Technological Development Zone (hereinafter referred
to as Development Zone) approved by the State Council for
establishment within the borders of Jiangsu Province.
@@ Article 3. A Development Zone shall come under the jurisdiction
of its local Municipal People's Government, shall have its
boundaries clearly defined and shall implement certain specials State
policies.
A Development Zone shall aim at developing economic and
technological co-operation with foreign parties, attracting foreign
investment, advanced technology and scientific management know-how,
advancing newly established industries, expanding exports,
opening up international markets, strengthening economic and
technical relations and co-operation with areas both within the
province and outside and accelerating the development of the
Development Zone.
@@ Article 4. Foreign companies, enterprises and other economic
entities or individuals (hereinafter referred to as foreign
investors) shall be encouraged to invest in and establish
exporting enterprises, technologically advanced enterprises,
scientific research bodies, basic installation facilities etc., in a
Development Zone.
Foreign investment may be in the form of:
(1) a joint equity or co-operative project with a company,
enterprise or other economic entity from within the province or outside;
(2) a sole foreign investment project;
(3) another form of co-operation authorised under State law.
@@ Article 5. Companies, enterprises, scientific research
units and universities and colleges of higher education, both
from within the province and outside, shall be encouraged to
invest in and develop new technology, new techniques, new products and
new materials in a Development Zone, to establish Sino-foreign
joint equity enterprises, co-operative enterprises and co-operative
scientific research bodies and to co-operate in the construction of
basic installation facilities in a Development Zone.
@@ Article 6. All units and individuals in a Development Zone shall
abide by the laws and statutory regulations of the People's Republic
of China and all their property in the Development Zone and
other legal rights and interests shall receive the protection of the
law.
@@ Article 7. Projects which pollute the environment and
contain no realistic measures to combat the problem and projects
which produce State prohibited or restricted products shall not be
permitted to be established in Development Zone.
CHAPTER II ADMINISTRATION
@@ Article 8. The Development Zone Administrative Commission
(hereinafter referred to as the Administrative Commission) shall be
the representative of the local Municipal People's Government in the
region of the Development Zone and shall administer Development Zone
affairs.
@@ Article 9. The powers and functions of an Administrative
Commission shall be to:
(1) formulate overall plans and development plans for the
Development Zone and organise the implementation of these plans after
their submission to a higher level authority for approval;
(2) carry out overall planning and examine and approve investment
Projects in the Development Zone within the jurisdiction designated by
the Municipal People's Government;
(3) uniformly handle the inspection and allocation of land
within the Development Zone and collect land use fees and land
development fees;
(4) implement State policies and decrees and supervise and inspect
import and export operations in the Development Zone;
(5) administer the financial income and expenditure of the Development
Zone;
(6) establish public welfare institutions in the Development Zone;
(7) supervise and co-ordinate the operations of the branch offices
of the various relevant Municipal departments established in the
Development Zone;
(8) formulate rules and regulations for the administration
of the Development Zone and inspect their implementation;
(9) handle foreign related maters concerning the Development
Zone in accordance with the law;
(10) execute other powers and functions authorised by the local
Municipal People's Government.
@@ Article 10. An Administrative Commission may, in accordance
with work requirements and following approval by the local
Municipal People's Government, establish administrative bodies
to be responsible for administrative matters in the Development Zone.
@@ Article 11. Such matters as the registration of
industrial and commercial enterprises, foreign exchange control,
banking, Customs, commodity inspection, taxation, culture and
education, public security and insurance shall be handled by the
relevant departments of the local Municipality or the relevant
administrative bodies in the Development Zone.
CHAPTER III REGISTRATION AND BUSINESS OPERATIONS
@@ Article 12. An investor which wishes to invest in and
establish an enterprise or other type of institution in a Development
Zone shall submit an application to the Administrative Commission
and provide the necessary documents and, after their examination
and approval, procedures for the issue of a Land Use Certificate
and a Business Licence and for tax registration shall be undertaken.
@@ Article 13. An enterprise or public institution in the
Development Zone shall open an account with the Development Zone
Branch of the Bank of China or any other bank in the Development Zone
authorised by the State and shall carry out matters concerning foreign
exchange.
The various insurance policies required by a company, enterprise or
other economic entity in the Development Zone shall be
underwritten with a Chinese insurance body established in the
Development Zone or with another insurance company authorised by the
State.
@@ Article 14. A Development Zone enterprise shall establish
books of account in the Development Zone and shall submit
quarterly and annual accounting statements to the Administrative
Commission and other relevant departments in charge in accordance
with regulations. Annual accounting statements shall be subject to
verification by a public accountant registered in China and a
certificate of verification shall be provided by the accountant.
@@ Article 15. If a Development Zone enterprise terminates its
operations, it shall report the reason to the Administrative
Commission in accordance with legal procedure and shall complete
procedures for termination. Liquidation of the property of the
enterprise shall be handled in accordance with the provisions
of relevant State laws and, after tax liabilities and other debts
have been cleared, the remaining assets may be transferred and the
funds of foreign investors may be remitted abroad.
CHAPTER IV PREFERENTIAL TREATMENT
@@ Article 16. Foreign investment production-type enterprises
established in the Development Zone shall pay Enterprise Income Tax
at a reduced rate of 15%. If the operational period of such an
enterprise is 10 years or more, payment of Enterprise Income Tax
shall be exempted for two years from the first profit-making year and
reduced by one half of the prevailing rate in the third to the
fifth year, subject to the enterprise obtaining the approval of the
local Municipal taxation organ.
After the expiry of the period of reduction of and exemption
from Enterprise Income Tax in accordance with the provisions of
the previous paragraph, an exporting enterprise with an export
value for the year amounting to 70% or more of the value of its
product output for that year may pay Enterprise Income Tax at
a reduced rate of 10% and a technologically advanced enterprise
may pay Enterprise Income Tax at one half the prevailing rate for a
further three years.
Exporting enterprises and technologically advanced enterprises
shall also be exempt from payment of local income tax during the
period of exemption from Enterprise Income Tax as stipulated in
the first paragraph of this Article. After the expiry of this
exemption period, payment of local income tax shall be exempted for
another three years and paid at one half the prevailing rate for a
further three years. An exporting enterprise which after the expiry
of the period of exemption from local income tax has an export value
for the year amounting to 50% or more of its product output for that
year shall be exempt from local income tax.
@@ Article 17. A foreign investor shall be exempt from paying
income tax on dividends received from an enterprise in the
Development Zone when the dividends are remitted abroad.
@@ Article 18. If a foreign investor reinvests, for no less
than five years, the dividends received from an enterprise in the
Development Zone in the establishment or expansion of an
exporting enterprise or technologically advanced enterprise
within Chinese territory, the total amount of Enterprise Income
Tax already paid on the reinvested dividends shall be returned,
subject to the enterprise obtaining the approval of the local
Municipal taxation organ If this reinvestment is withdrawn before the
expiry of the five year period, the tax payment already refunded
shall be returned. If the dividends are reinvested in something
else, the matter shall be handled in accordance with the relevant
provisions of the Income Tax Law of the People's Republic of China
for Sino-foreign Joint Equity Enterprises.
@@ Article 19. In addition to income tax payments exempted in
accordance with the law, a foreign investor which has no
establishment within Chinese territory and which receives income, such
as dividends, interest, rental or royalties, from the Development
Zone shall have income tax levied at a reduced rate of 10%. If the
terms for the funds or equipment provided are favourable or the
assigned technology is of an advanced standard, further reductions of
or exemptions from income tax may be given, subject to approval
by the local Municipal People's Government.
@@ Article 20. If a foreign investment enterprise in the
Development Zone suffers an annual loss, an equivalent amount may
be allocated from the income of the following year. If the
income of the following year is insufficient to cover the entire
amount, the loss may be recovered gradually over successive
years. but the maximum period shall not exceed five years.
@@ Article 21. Export products manufactured by an enterprise
in the Development Zone shall be exempt from customs duty and
Consolidated Industrial and Commercial Tax, except for those
products which are State restricted exports or to which other
regulations apply.
@@ Article 22. The Development Zone itself or an enterprise
in the Development Zone shall be exempt from Customs duty and
Consolidated Industrial and Commercial Tax on building materials,
production equipment, raw materials, assembly parts, components,
means of transport and office equipment imported for its own use
and raw materials, assembly parts, components and packing materials
imported to manufacture products for export. If products processed
from duty free raw materials, assembly parts or components are
transferred for domestic sale following approval from the relevant
State department, retroactive payment of Customs duty and
Consolidated Industrial and Commercial Tax on the imported
materials and parts used shall be carried out in accordance with
regulations.
Household items and means of transport imported for personal use by
foreign personnel working or residing in the Development Zone shall
be exempt from Customs duty and Consolidated Industrial and
Commercial Tax based on presentation of a certificate issued by the
Development Zone Administrative Commission, provided the amount of
goods is of a reasonable quantity.
@@ Article 23. The water and electricity requirements of a
foreign investment enterprise for production or business
operations shall be entered in the local plan and guaranteed
priority supply. Water and electricity charges for exporting
enterprises and technologically advanced enterprises shall be levied
in accordance with prices stipulated in the plan. Water and
electricity for other foreign investment enterprises shall be levied
in accordance with the rates which apply to local State-run
enterprises. The various foreign investment enterprises whose
approval is within the jurisdiction of the province shall, without
exception, no longer be charged fees for necessary construction
relating to water and electricity or fees for added capacity.
@@ Article 24. The local commodity department shall arrange
priority supply of raw materials required by a Development Zone
foreign investment enterprise for construction and production
operations and charges shall be equivalent to those which apply to
raw materials supplied to State-run enterprises.
@@ Article 25. A Development Zone foreign investment enterprise
may, in accordance with bank regulations, use cash or fixed assets
as collateral when applying for a bank loan. The various banks
with which a foreign investment enterprise holds accounts shall
provide the enterprise with priority loans to meet its liquid
capital and short term revolving fund requirements during the loan
quota period. If the production or business operations of a
foreign investment enterprise so necessitate, the enterprise may
raise funds abroad. The enterprise itself shall be responsible
for the borrowing and repayment of loans.
@@ Article 26. A production-type foreign investment enterprise
which has difficulty paying Consolidated Industrial and Commercial Tax
in the initial period after construction and start up of
operations may be granted a reduction of or exemption from the
Tax, subject to verification and approval by the Municipal
People's Government in the Development Zone region.
@@ Article 27. A Development Zone foreign investment enterprise
shall also enjoy the various items of preferential treatment
prescribed by the relevant laws and regulations of the State and
province.
CHAPTER V SUPPLEMENTARY PRINCIPLES
@@ Article 28. The Municipal People's government in the
Development Zone region shall promptly examine and make decisions on
all matters submitted by Development Zone enterprises and public
institution requiring a response or decision. The Provincial
People's Government shall respond within one month of receipt to
all the various documents submitted by the Municipal People's
Government requiring a response. Procedures for approval
certificates and Industrial and Commercial Business Licences
shall be completed within 10 days.
@@ Article 29. Labour management and land use administration
in a Development Zone shall be handled in accordance with
the relevant regulations of the State and the province.
@@ Article 30. These Provisions shall apply to enterprises invested
in and established in a Development Zone by Hong Kong, Macao
and Taiwanese companies, enterprises and other economic entities or
individuals.
@@ Article 31. These Provisions shall take effect from the
date of promulgation.
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