Q: What sort of tax preferential policies can foreign investors enjoy in pudong New Area?
A: (1) The income tax of foreign-invested manufacturing enterprises shall be levied at a reduced rated of 15%.
(2) Foreign-invested enterprises scheduled to operate for a period over 10 years shall be exempted from income tax in the first two years starting from the profit-making year and be granted a 50% reduction in the next three years.
(3)”High-tech Projects” invested by foreign investors in Pudong New Area can enjoy 10% income tax rate for another three years after the period of tax exemption and tax reduction. Export enterprises with foreign investment shall value amounts to more than 70% of the annual sales value.
(4)The income tax of foreign-invested enterprises in the field of ports ,energy and transportation shall be levied at a reduced rate of 15%.if the operation period of the above-mentioned enterprises is over 15 years, the income tax shall be exempted for the first 5 years starting from the first profit-making year and allowed a 50% reduction in income tax for the next 5years.
(5)The building or houses built or purchased by foreign investors for their own use shall be exempted from house property tax for five years, starting from the date when the transaction is done.
(6)The foreign-invested banks and JV banks with its injected capital over USD 10 million or its operating fund allocated by its headquarters over USD 10 million, after approval, can enjoy a reduced income tax rate at 15%. And starting from the first profit-making year, the above-mentioned enterprises can enjoy income tax exemption for one year and 50% income tax reduction for another two years.
Q: How do you apply for the establishment of duty-free warehouses and duty free processing factories?
A: To apply for the establishment of a duty free warehouse, you will have to submit your application and business license issued by the Industrial and Commercial Administration Office together with relevant documents issued by the competent department of the Foreign Economic and trade Commission to the Customs house will promulgate a Duty-Free warehouse Registration Certificate. Only then can you start the business.
To set up a duty free processing factory, you shall entrust either an authoritative department ratified by the government dealing with import and export businesses or an enterprise engaged in the business of processing registered and ratified by the industrial and Commercial Administration Department to submit your application and relevant documents to the local Customs House. Once the examination result by the Customs House is in accordance with the related laws and regulations, once you have a special factory or workshop and a special warehouse or ground, once you have facilities for supervision and inspection of the customs, once you ensure that you’11 abide by the Customs law of P.R.C. and all regulations concerning duty-free factories drawn by the Customs and once you promise to shoulder the responsibilities which you are supposed to fulfil, the Customs House will approve and issues the Duty-Free registration Certificate.
Q: Are there any difference between cooperative enterprises and joint ventures?
A: The main difference between cooperative enterprises and joint venture lies in the fact that shares are not calculated merely by capital and that profit is divided not according to the proportion of shares but according to the investment-distribution ratio based on the content.
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