IMPLMENTATION REGULATIONS FOR THE ENCOURAGEMENT OF FOREIGN INVESTMENT IN THE ECONOMIC AND TECHNOLOGICAL DEVELOPMENT ZONE OF GUANGZHOU

IMPLMENTATION REGULATIONS FOR THE ENCOURAGEMENT OF FOREIGN
INVESTMENT IN THE ECONOMIC AND TECHNOLOGICAL
DEVELOPMENT ZONE OF GUANGZHOU

(Promulgated on December 15, 1986 by the People's
Government of Guangzhou)

SUBJECT: ENTERPRISES WITH FOREIGN INVESTMENT

ISSUING-DEPT: GUANGDONG PROVINCE

ISSUE-DATE: 12/15/1986

IMPLEMENT-DATE: 12/15/1986

LENGTH: 1238 words

TEXT:

[Article 1] These regulations are formulated in the light of the specific conditions in the Economic and Technological Development Zone of Guangzhou (hereinafter referred to as the Development Zone) in accordance with the Provisions of the State Council for the Encouragement of Foreign Investment and the relevant provisions of Guangdong Province.

[Article 2] All the regulations and provisions the State Council and Guangdong Province for the encouragement of foreign investment (including the investment from Hong Kong, Macao and Taiwan, similarly hereinafter) are applicable to the foreign investment enterprises in the Development Zone.

Export enterprises and technologically advanced enterprises in the Development Zone shall enjoy special preferences after report for the record to the Commission of Foreign Economic Relations and Trade of Guangzhou with the confirmation of the Administration Committee of the Development Zone (hereinafter referred to as the Administration Committee).

[Article 3] For export enterprises and technologically advanced enterprises within the Development Zone, the development fee and the site use fee shall be, when computed and charged together, reduced to five RMB yuan per square meter per year. Subject to approval of the Administration Committee, more Preference shall be given to The enterprises with respect to the development fee or the site use fee when the development fee or the site use fee when the development fee is computed and charged on a one-time basis or when the enterprises develop the areas themselves (in a way of part division).

[Article 4] The fund for social labour insurance of the staff and workers shall be reduced to 16% of the total amount of wages of the enterprises (among which 1% is relief fund for unemployment). which shall be paid to the labour administration agency of the Development Zone used as living allowances for the staff and workers during the uncontractual period (including the periods of retirement and resignment and the period waiting for employment).

Fees such as for medical and welfare expenses for the staff and workers of the enterprises may be drawn according to the standards used in the case of the state enterprises, and they shall be under the management of the enterprises.

The enterprises may employ various ways to provide housing subsidies for Chinese staff and workers in accordance with the contract.

[Article 5] Unreasonable levy of charges shall be strictly fordidden. The items and standards of executive fees must be subject to relevant regulations of the State Council.

[Article 6] The basic framework of the six utilities and one level (roads, water supply, power supply, communication, drainage, discharge of waste water and land leveling) shall be provided in the Development Zone for enterprises within the industrial, commercial and residential districts connected with the harbour. Export enterprises and technologically advanced enterprises shall be given priority in obtaining water, electricity transportation services and communication facilities needed for their production and operation. The fees shall be computed and charged in accordance with the standards for the state enterprises of Guangzhou.

[Article 7] Subject to approval of the tax administration agency in the Development Zone, foreign investment enterprises may apply for refund of the Consolidated Industrial and Commercial Tax paid for the materials and parts which have been produced in Guangzhou and have been processed for export by the enterprises.

Foreign investors may use the profits distributed to them by the enterprises to purchase goods produced in Guangzhou for export after going through necessary procedures in accordance with the relevant rules of the State for export administration, and they may apply to the tax administration agency for refunds of the product tax that have already been paid for the goods.

[Article 8] Those Chinese consumers who are exempted from customs duties when importing goods shall still enjoy the preference when they purchase products from the foreign investment enterprises which are made from imported materials and parts exempted from uctoms duties.

Foreign investment enterprises in the Development Zone producing the import-substitution products described in the first paragraph of this article may enjoy all the preferences given by the State to encourage export, and they may change foreign exchanges for the selling.

[Article 9] Under the supervision of the exchange control agency in the Development Zone established by the Guangzhou Office of the State General Administration of Exchange Control (hereinafter referred to as the Exchange Control (hereinafter referred to as the Exchange Control Agency of the Development Zone), foreign investment enterprises in the Zone may adjust their foreign exchange surplus and deficiencies at the foreign exchange adjustment market of the Development Zone or of Guangzhou. The implmentation rules for the adjustment shall be formulated separately.

[Article 10] The Exchange Control Agency of the Development Zone shall open a special acount for adjusting foreign exchange which shall be centrally managed by the functional department concerned under the authorization of the Administration Committee in order to reach the balance of foreign exchange for the enterprises within the Zone. Priority to get exchange shall be given to the technologically advanced enterprises.

For the purpose of expanding export, foreign investment enterprises may use their legal income of foreign exchange in accordance with the objective of business stipulated in the contract and the articles of association.

[Article 11] Foreign investment enterprises may use by themselves their foreign currency remitted abroad and transfer abroad according to the contract their trust deposit of foreign currency and trust investment of foreign exchange in the Development Zone.

[Article 12] Foreign investment enterprises having foreign exchanges (including loan of foreign exchanges) under the examination and confirmation of the Exchange Control Agency of the Development Zone may apply for RMB loan mortgaged by foreign exchange to the Bank of China in the Zoneor other financial organizations authorized to engaged in foreign exchange business.

[Article 13] Enterprises in the Development Zone may employ staff and workers in the city and the suburban towns of Guangzhou and, subject to approval of the labour and personnel administration of the Zone, also in the countryside and other places of the country. Their employment plans and labour contracts shall be reported for the record to and be under the supervision by the labour and personnel administration of the Zone.

[Article 14] The Investment Service Center shall be set up in the Development Zone to provide investment advice, manage as agent various investment affairs and go through the procedures to pay various investment fees for foreign investors.

[Article 15] These regulations shall apply as reference to those inland-foreign associated enterprises and state enterprises in the Development Zone that are export enterprises and technologically advanced enterprises.

[Article 16] These regulations shall come into force on the date of promulgation.