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REGULATIONS ON SPECIAL ECONOMIC ZONES
IN GUANGDONG PROVINCE

(Approved by the 15th Session of the Standing
Committee of the Fifth National People's
Congress on August 26, 1980)

 



SUBJECT: SPECIAL ECONOMIC ZONES

ISSUING-DEPT: GUANGDONG PROVINCE

ISSUE-DATE: 08/26/1980

IMPLEMENT-DATE: 08/26/1980

LENGTH: 1801 words

TEXT:

CHAPTER I GENERAL PROVISIONS

[Article 1] In order to develop economic co-operation and technical exchanges with foreign countries and to promote the socialist modernization programme, certain areas are to be delineated in the three cities of Shenzhen, Zhuhai and Shantou in Guangdong Province for the establishment of special economic zones (hereafter referred to as "special zones").0 The special zones shall encourage foreign citizens, overseas Chinese and compatriots from Hongkong and Macao and their companies and enterprises (hereafter referred to as "investors") to set up factories and establish enterprises and other undertakings, with their own investment or in joint ventures with our side, and shall, in accordance with the law, protect their assets, the profits due them and their other lawful rights and interests.

[Article 2] Enterprises and individuals in the special zones must abide by the laws, decrees and pertinent provisions of the People's Republic of China.0 Where there are special provisions in these Regulations, they shall be carried out accordingly.

[Article 3] A Guangdong Province Committee for Administering Special Economic Zones shall be set up to exercise unified administration of the special zones on behalf of the People's Government of Guangdong Province.

[Article 4] The special zones shall provide investors with a wide scope of operation, create favourable operating conditions, and guarantee them stable business sites.0 Investors may establish with their own investment, or in joint ventures with our side, all projects that have positive significance for international economic co-operation and technical exchanges, including those relating to industry, agriculture, animal husbandry, aquaculture, tourism, housing and construction, and research and manufacture involving advanced technology, as well as other businesses of common interest to investors and to our side.

[Article 5] The Guangdong Province Committee for Administering Special Economic Zones shall be responsible for undertaking land-levelling projects and building various public utilities in the special zones such as water supply, drainage, power supply, roads, wharves, communications and warehouses.0 When necessary, foreign investment may be also accepted to participate in these undertakings.

[Article 6] Each of the special zones shall invite domestic and foreign experts and relevant personages who are enthusiastic about China's modernization programme to form an advisory committee that will serve as a consulting body for that special zone.

CHAPTER II REGISTRATION AND OPERATION

[Article 7] Investors wishing to set up factories or to establish various economic undertakings in the special zones with their own investment shall apply to the Guangdong Province Committee for Administering Special Economic Zones which, after examination and approval, will issue a registration certificate and a land use certificate.

[Article 8] Investors may open accounts and conduct relevant foreign exchange transactions with the Bank of China or with other banks established in the special zones with the approval of our side.

Investors may obtain various kinds of insurance coverage from the People's Insurance Company of China or from other insurance companies established in the special zones with the approval of our side.

[Article 9] Products of the enterprises in the special zones are to be sold on the international market.0 If their products are to be sold within our country, they must have the approval of the Guangdong Province Committee for Administering Special Economic Zones and go through procedures for the payment of unpaid Customs duties.

[Article 10] Investors may independently operate their own enterprises in the special zones and employ foreign personnel for technical and managerial work.

[Article 11] If an investor wishes to terminate operations in the special zones before their scheduled expiration, it shall report the reasons to the Guangdong Province Committee for Administering Special Economic Zones, go through termination procedures and settle claims and debts; after termination of operations, the assets may be assigned, and the funds may be remitted abroad.

CHAPTER III PREFERENTIAL MEASURES

[Article 12] Land in the special zones is owned by the People's Republic of China.0 The land to be used by investors will be provided according to actual needs; the duration of its use, the amount of the use fee and the method of payment will be given preferential consideration according to the different types of business and uses, and specific measures will be separately provided.

[Article 13] Machinery and equipment, spare parts, raw and semi-processed materials, means of transportation and other capital goods required for production imported by enterprises in the special zones shall be exempted from import duties.0 Articles required for daily use may, in accordance with the specific situation, either be subjected to import duties or allowed a reduction or exemption therefrom.0 Importers of the above-mentioned goods and exporters of products of the special zones shall all go through Customs application procedures.

[Article 14] The enterprise income tax rate in the special zones is 15%.0 Special preferential treatment shall be given to enterprises established within two years of the promulgation of these Regulations, to enterprises with an investment of U.S. $ 5 million or more, and to enterprises involving higher technology or a longer capital turnover period.

[Article 15] The lawful profit that an investor receives after payment of the enterprise income tax, and the wages and salaries and other legitimate income that foreign, overseas Chinese and Hongkong and Macao staff and workers of an enterprise in the special zones receive after payment of the individual income tax, may be remitted abroad through the Bank of China or other banks in the special zones, in accordance with the provisions of the foreign exchange control measures of the special zones.

[Article 16] An investor that reinvests in the special zones, for a period of five years or longer, its share of the profit may apply for a reduction of or an exemption from income tax on the reinvested portion.

[Article 17] Enterprises in the special zones are encouraged to use machinery and equipment, raw and semi-processed materials and other goods and materials produced in our country, and preferential prices will be offered on the basis of our country's current export prices for the same kinds of commodities, using foreign exchange to settle accounts.0 These products, goods and materials may be shipped directly to the special zones with the sales vouchers of the selling units.

[Article 18] Entry and exit procedures will be simplified and conveniences given to the foreign personnel, overseas Chinese and compatriots from Hongkong and Macao who travel to and from the special zones.

CHAPTER IV LABOUR MANAGEMENT

[Article 19] A labour service company shall be established in each of the special zones.0 Chinese staff and workers to be employed by the enterprises in the special zones, whether they are recommended by the local labour service companies or recruited by the investors themselves with the consent of the Guangdong Province Committee for Administering Special Economic Zones, shall all be tested by the enterprises before employment, and labour contracts shall be signed with the staff and workers.

[Article 20] The staff and workers employed by enterprises in the special zones are to be managed by the enterprises according to their business requirements and, when necessary, may be dismissed, after going through the procedures provided in the labour contracts.

Staff and workers of the enterprises in the special zones may submit their resignations to the enterprises in accordance with the provisions of the labour contracts.

[Article 21] The wage levels, types of wages and bonus measures and the labour insurance and various State subsidies for the Chinese staff and workers of the enterprises in the special zones are to be included in the contracts signed by the enterprises with the staff and workers as provided by the Guangdong Province Committee for Administering Special Economic Zones.

[Article 22] Enterprises in the special zones shall take the necessary labour protection measures to ensure that staff and workers work in safe and hygienic conditions.0

CHAPTER V ADMINISTRATION

[Article 23] The Guangdong Province Committee for Administering Special Economic Zones shall perform the following functions:

(1) Formulate development plans for the special zones and organize their implementation;

(2) Examine and approve the investment projects of investors in the special zones;

(3) Handle industrial and commercial registration and land allotment in the special zones;

(4) Co-ordinate working relations among the banking, insurance, taxation, customs, frontier inspection, postal and telecommunications and other organizations established in the special zones;

(5) Provide the staff and workers needed by enterprises in the special zones and protect the legitimate rights and interests of staff and workers;

(6) Establish educational, cultural and health facilities and public welfare institutions in the special zones; and

(7) Maintain public order in the special zones and, in accordance with the law, protect persons and property in the special zones against violation.

[Article 24] The Shenzhen Special Zone shall be under the direct management and administration of the Guangdong Province Committee for Administering Special Economic Zones; necessary offices shall be set up in the special zones in Zhuhai and Shantou.

[Article 25] A Guangdong Province Special Economic Zones Development Company shall be established in order to suit the expanding economic activities of the special zones.0 The scope of business of this company shall include: undertaking to raise funds and carry on trust and investment business; operating, or entering into joint ventures with investors to operate, relevant enterprises in the special zones; acting as agent for investors in the special zones in transactions relating to purchases and sales in trade with the interior; and providing services for business negotiations.

CHAPTER VI SUPPLEMENTARY PROVISIONS

[Article 26] These Regulations shall go into effect after they have been adopted by the People's Congress of Guangdong Province and submitted to and approved by the Standing Committee of the National People's Congress of the People's Republic of China.