Related policies and regulations for encouraging foreign 　　　　　　　　　　　　　　　investment of Hunan
Comprehensive
1. The province is in the middle west of China. Loose the control of foreign investment field, the condition for setting foreign investment and the stock holding of the foreign trader in the foreign investment enterprise and the “guide book for foreign investment industry” which is published by the nation, and the restrain of stock control by chines part and not allowing single investment for foreign traders. (The specific method is under making)

2. The foreign investment enterprises invest again in the province, if the rate is above 25%, it can treat as foreign investment enterprises. The register procedure of foreign investment enterprises can be made in the industry and commercial bureau, and in customers, the procedure of reduce the tax or tax-free.

3. Welcome and encourage the foreign investment enterprises of the coastal cities come to our province to contract, run and manage the foreign investment enterprises and internal capital enterprises.

4. The foreign investment enterprises, which are belonged to the encouraging group and without the need of national comprehensive balance, are not restrained by the investment total. They can be approved in the province, and only put on record on national Planning Committee, national trade committee and foreign trade department. Make the procedure of reducing and free tax according to the regulation for encourage group.

5. After the legal approvement according to the national regulation, making experiment joint-venture and cooperative business and enterprises to take up business wholesale and retail (sell on a commission basis, sell in secondhand shop). Co-running business and enterprises can organize the export for internal goods and import of self-sell commodity.

6.The foreign investment enterprises, which get the using right for land by selling method, will not pay for the using fare for the land.

7. In order to convenience the foreign investors, the new system of “one outside window, one-station approvement, and one series of service” is carried on in the provincial attracting cooperation bureau. 14 provincial direct committees, bureaus, offices and departments are solving the problem of consultant, approvement, and adjustment together in the provincial attracting cooperation bureau regularly. There are complaint centers in the province and cities to accept and adjust the problems that complained by foreign traders.

Tax and finance
1. Productive foreign investment enterprises which is run more than 10 years, begin from the year when get profit, in the first and second year is free of enterprise income tax, in the third and fifth year hand in half of the income tax (“two free three reduce” for short in the following). The enterprises fall to the encourage group according to the “guide book for foreign investment” by national economy and trade committee and external trade cooperation department and national planning committee through the approvement of the State Council and the second kind of restrained program and the advanced industries and programs approved by the State Council pay 15% of the income tax in the three years after the fulfillment of the two free three reduce.

2. The enterprises on agriculture, forestry and stock raising and the enterprises in the poor area, after the treatment of two-free three-reduce, can reduce 15% to 30% of the income tax in the following ten years through the application of the enterprises and the approvement of the national tax bureau.

3. The product exported enterprise if the exported output gets to the 70% of the product output of the enterprise pay half of the income tax according to the existing tax rate after the treatment of two-free three-reduce. But the tax after reducing can’t lower than 10%.

4. The advanced technology enterprise can pay half of the income tax for three years after the fulfillment of the two-free three-reduce, but the half tax can’t be lower than 10%.

5. The foreign investors in the foreign investment enterprises, put the profit form the enterprises to re-investment of the enterprises directly, and adding registered capital or open other enterprise by the capital with more than 5 years running, can be returned 40% of the paid tax for re-investing through the application of the investors and the approvement of the tax organs. If invest to build, extend exported enterprises, advanced technology enterprise again with more than 5-year running, can be returned of all the paid income tax for the re-investment. 6. The foreign investors get profit from the foreign investment enterprises is free of tax.

7. The approved high-tech foreign investment enterprises in the high-tech developing zone with the approvement of the State of Council can reduce 15% of the income tax.

8. The foreign investment enterprise in Changsha, Yueyang can get the treatment of the tax favor policy for coastal economy zone. The productive foreign investment enterprises in Changsha, Yueyang pay 24% of the income tax. ?In Changsha, Yueyang, run the enterprises belong to:
　　 a. The program of intensive technology and intensive knowledge
　　 b. The program with the investment over 30,000,000 USD and long recover time can pay 15% of 　　　　the income tax through the approvement of the national tax bureau.

9.The productive foreign investment enterprises with over ten-year running, can be free of local tax (including local income tax, tax for city and house, the license tax for cars and ships, and the tax on slaughtering animals, the same for the following) for ten years. Non-productive foreign investment enterprises with over ten-year running can be free of local tax for five years.

10.the basic industry enterprise on energy, transportation, basic facilities and raw material and the foreign investment enterprises in the economy developing zone and high-tech industry developing zone can be free of local tax.

11. To the foreign investment enterprises who purchase internal machinery in the total investment, can be returned all the increment tax of the internal machinery and free or compensate for the income tax according to the regulations.

12. The studying center set by the foreign investment enterprises; the transferred technology is free of business tax according to the internal science and technology institute.

13. The foreign enterprises transfer technology to the province is free of business tax. If it is of advanced technology or of favor conditions, can be free of income tax by the approvement of the tax department of the State Council. The income of the technology transferring for the foreign investment enterprise is free of business tax.

14.The developing fare for the technology is more than 10% (including 10%) than the last year of the foreign investment enterprises, can use 50% of the fare put in use to compensate the income tax through the approvement of tax bureau.
15.The productive foreign investment enterprises, which focus on energy, transportation (freight transport) and the basic facilities building of ports, can pay 15% of the income tax through the approvement of the national tax bureau。

16.The cooperators inside and outside the country who sign the contract that when the contract is fulfilled, the whole fixed capital of the enterprises being to the Chinese part, can let the foreign cooperator take bake the investment in the period through the approvemen of financial organ above the provincial level according to the regulation of the tax of the nation.

17.The advanced technology enterprises and the product-exported enterprises can be free for the price allowances for Chinese staff and the tax for using the land.

Customers, the trade on import, export and processing
1. To the foreign investment enterprises, foreign investment institute of the encouraging group and the second group for restraining, the advanced enterprises and programs with the foreign investment approved by the State Council, the imported self-use equipment, spare parts for completing the sets can be free for tariff and import tax according to the national regulation

2.For the set program above and the technology reform of the advanced technology and productive foreign investment enterprises use self capital out of the investment total to import self-use equipment and the technology, spare apiarist within the running range approved before ca be free of tariff and import tax according to the national regulation

3.To the building land for developing processing trade can get favor on the price and tax. On the area with fast processing trade developing, the related department gives great support on exported volume, the management of the license, the approvement on stand in the exhibition, store of protective tax, and protective facotry, the put on record of the processing trade contract, the opening of the bail of the processing trade and the certificate on the free tax.

4.The income gets from the external processing trade of the import and export enterprises is free of value added tax.

5.The profit from the processing trade of the enterprises can draw 3% of the bonus from the net profit after paying for the income tax.

6. Process materials supplied by custumers: The raw material, assistant material, spare parts, and package material which are used to process and sell back provided by the foreign trader wholly or partly are free of tariff and the value added tax.

7. The imported material for processing exported production can be free of tariff and the value-added tax on customers according to the actual number for exported goods. ?Some chemical commodity such as catalyst, and detergent which is consumed in the producing for processing the exported goods are free of tariff and value added tax. The things that imported for processing is not forced to get the import license apart from special regulations of the nation. For process material which has the contract of exporting product can be free of the tax for the imported things through the approvement of the customers.

8.To the enterprises suited for the processing trade ,for a group’s management, can not carry on bank bail system, and simplify the management procedure.

9.If the running unit and the processing enterprises are the special processing exported enterprises, and are with the strike condition of supervising of the customers, with the special store, special account, with certain person to manage and guarantee to follow the rules of the customers, can approved to set tax protective factory through the application of the enterprises. If the processing enterprises are of processing exported products with large amount of imported material with different kinds, can apply to build a tax protective store in order to reduce the cost.

10.In order to fulfil the contract, the exported enterprises are supplied the assistant material freely or with money by the foreign traders can not make the handbook for processing trade if the material is in the 78 kinds which is regulated and with the value under 5000USD, and also not get into the bank bail. If the value is above 5000USD and under 10,000USD, and it is in the 78 regulated material, it will not get into the bank bail , but it have to register.

11.The exported processing area approved by the nation carries on the managing system . It regards the things transport into the area from other area as export, and return tax as regulation. It regards the things transport out of the area as import, and takes tariff and imported tax suited to the products. The processing value increasing in the area is free of value added tax.

12.Pause the fixed volume of processing imported grain, oil, rubber and wool, and put them into managing list of restrained processing commodity.

13. Reduce the range of the forceful value appraisement to the imported equipment for the foreign investment enterprises gradually, and improve the appraising method, get rid of the forceful value appraisement tot he imported equipment of the single foreign investment enterprises.

Finance and foreign charge
1.when the foreign investment enterprises collect capital inside the country, the commercial ban can receive the guarantee from the foreign stockholder. Allow the foreign investment enterprise loan from the fixed foreign charge bank with RMB with the method of foreign charge mortgage. All the foreign charge of the foreign investment enterprises can be mortgaged. Under the title of RMB loan with the mortgage of foreign charge, internal financial organ and internal financial organ for foreign charge can guarantee it. Get rid of the register procedure and special restrain to the credit level of the foreign charge banks under the title of foreign charge mortgage and foreign charge guarantee. The RMB loan with foreign stockholder guarantee and foreign charge guarantee should be suited to the industry policy, and it can be use to meet the need of fixed capital investment and mobile capital, but not in purchasing the foreign charge.

2.Set the special industry investment fund, and ease the problem of not enough Chinese stock capital while the capital increasing of the foreign investment enterprises. At the same time, permit internal commercial banks supply stock capital which is not over 50% to the Chinese stockholder with the premise of the foreign stockholder’s increasing stock capital gets to the point of the joint-venture and cooperation enterprises. The time is within 10 years. The banks according to the loan principal decide the specific ratio.

3.Permit the internal foreign investment enterprises ask for mortgage to the branch banks of the Chinese capital banks with the overseas capital of the foreign investors, and loan form the external branch banks or internal banks of the Chinese capital banks。

4.The foreign investment enterprises, which are fulfilling the standard, can publish A stock or B stock.

5.According to the pineapple of active and steady supply insurance services such as political risk insurance, fulfilling insurance and guarantee insurance to the foreign investors in the encouraging fields such as energy and transportation.

6. In the business of imported material for processing, the capital of the material paid by the foreign traders which should be returned because of the lack of the capital, permit it to get the capital back from the total value of the exported goods directly through the approvemetn of the foreign investigating bureau, and get the money by the declaration form of the imported material.

7.Perfect the annual check of the foreign charge of the foreign investment enterprises. To some enterprises, which are not making annual check in time because of time or not understand the policy, make the annual check according to different situation to guarantee the right order for the management of the foreign investment enterprises.

8.Put the right of approving the foreign charge income of the foreign investment enterprises to the lower units. Get rid of the put on record system of closing the foreign charge. Permit the foreign investment enterprises make the purchase and pay charge procedure under the title of imported technology by technology transfer agreement and approvement when the enterprises were set. Permit the foreign charge saving in the closing foreign charge account of the foreign investment enterprises turn to fixed deposit only if it is within the highest volume.

9.Simplify the internal producer, adjust the approvement right of closing and purchase charge business under the title of foreign debt. It adjusts form report to the Changsha branch bureau of every item over 2,000,000 USD to less than 5,000,000USD. The legal and normal closing and purchasing charge the local foreign charge bureau approves business. At the same time, the closing and purchasing of the charge over 2,000,000USD should put on record on Changsha branch bureau. It must put on record and get approvement on illegal ones and ones that is over the existing regulation and documents.

10. Get rid of the put on record of closing foreign charge account under the title of foreign debt.

The management on leaving and getting into the country
1.The enterprise with over 150,000 Yuan tax volume for the last year, over 50,000 USD of foreign charge creation volume, and the personal run enterprises with over 20,000 Yuan for tax or over 10,000 USA of creation of exported charge, can apply to HongKong, and Macao for business without the restrain of the volume of registered capital and the owning system 。

2.The Chinese employee of the international organization in Hunan, the Chinese employee of the Hunan office of foreign enterprises, the working staff of the high-tech enterprises and other tax free staff of the enterprises can apply to HongKong and Macao on business without the offering of the volume of tax, the certificate for making charge and invitation.

3.The time limited for business trip to HongKong and Macao: it should be finished in 7 work day in the police organs in Changsha, Xiangtan, Zhuzhou, Hengyang, Yueyang, Changde and Yiyang. It should be finished in 10 workday in other cities and prefectures. It should be finished in 3 workday in the management department of leaving or getting in the country of provincial public security bureau.

4.Put the approved right of getting in and leaving the country for many time to the city and prefecture public security bureau. The people from Taiwan invest in Hunan, buy houses, make trade and other economy activities and come to the mainland several Tim for business can apply to the local public security for the book of several comes and leaves which is available to use in 1 to 5 years directly. It should be finished in 2 workday for the applying of making the book of several comes and leaves, adding time for resident if they get to the standard.

5.To the foreigners whose investment is of large sum or who makes great contribution to the development of economy, can apply to the local public security bureau for the “settle right in China”, and it must be checked by local public security organs and approved by the provincial public security bureau. The foreigners who get the right will not apply for the settle extended not hand in the papers to the public security organ to be check regularly. The once apply can get a visa with servile times for 5 years (not including the one that the effective time on passport is not enough), and is free of fare. Their spouse and children can settle in Hunan.

6.To the foreign experts, technology working staff working in the national enterprises, and the foreigners work in the three capital enterprises who apply for the return visa can get a return visa with several effective in one year according to the need of the applicant and the idea of the enterprises. It should be finished in 1 workday. All above favor policies are suited to the investor from Taiwan, HongKong and Macao.