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Investment Policy

The Main Preferential Policies of Qingdao to Encourage Foreign Investment

2017-11-21

Qingdao Municipality enjoys the economic management authority of provincial level and is one of the Chinese regions that enjoy the most preferential policies of the state. Qingdao municipality has established the following main preferential policies:
  To persist in the principle of hi-tech in priority. To encourage investment in new technologies, new materials, new processes and new products; to encourage hi-tech transformation of traditional industries.
  1.Export of hi-tech products enjoys export tax rebates according to the VAT rate. The identified municipal production enterprises, scientific research institutions and business enterprises that export products with high technology and high added value enjoy relevant preferential policies for income tax of hi-tech enterprises. Since 2000, the VAT of their produced and exported hi-tech and high value added products newly paid on the basic value of the previous year and reserved for local financial revenue will be returned to the enterprises in full within 3 years.
  2.The product export enterprises and the hi-tech enterprises established by foreign businessmen in Qingdao and the foreign invested enterprises in industrial parks along “there lines” are exempt from income tax.
  3.To choose large and middle-sized enterprises for contract operation or lease operation by international enterprises or consortiums. To choose middle and small-sized state-owned, collective or township enterprises for public sale, lease or transfer on domestic or overseas markets. The foreign businessmen who contract, lease or purchase middle and small-sized enterprises of Qingdao will enjoy preferential policies according to the regulations for domestic enterprises.
  To persist in the principle of expanding demand and increasing export in priority. To encourage investment in industries with market potential, big volume and possibility of increasing export as well as some service trade fields.
  To encourage more foreign banks to establish branches in Qingdao. The wholly foreign owned banks and joint venture banks are exempt from income tax. In addition, to actively encourage the establishment of Sino-foreign joint venture or cooperative travel agencies.
  To encourage investment in construction of infrastructure:
  1. Foreign businessmen who invest in transport infrastructure and public utility projects can operate various service businesses supporting the projects according to relevant regulations, can operate the projects by BOT, TOT or other means and can enjoy various preferential policies for reduction and exemption of corporate income tax according to national regulations. For the highway and bridge projects compliant with national regulations for charges, investors can propose charging schemes according to reasonable ROI period to competent authority for approval in accordance with price management authority. The charging standard is adjustable according to the variation of social prices and can be executed after approved by original authority. Foreign businessmen investing in infrastructure projects are exempt from income tax.
  2. Foreign-invested enterprises that specialize in transformation construction of old city as well as development and construction of affordable housing projects can enjoy the treatment equivalent to Chinese enterprises. The land for constructing national affordable housing projects can be supplied by means of administrative allocation and enjoy reduction and exemption of relevant costs and reduction by half of urban infrastructure supporting fees. 20-30% of the affordable housing community can be reserved for commercial residential buildings to increase the ROI of foreign investors.
  To encourage investment in agricultural field
  1.The foreign-invested comprehensive agricultural development enterprises are exempt from income tax. The foreign investors of foreign-invested agricultural enterprises who reinvest his profit from these enterprises into agricultural projects of Qingdao for five years or above can be exempt from 40% of the income tax he has paid for the reinvested part.
  2.For all kinds of foreign-invested agricultural development projects making use of water and land resources such as barren mountains, barren slopes, deserted mudflats and unused water, the agricultural tax and tax on agricultural and forestry specialties can be refunded in full for the first five years from the first profitable year and refunded by 50% during the following five years after approved by municipal or district people’s governments.
  3.Land used for agricultural project shall be allocated in priority. The agricultural, forestry and pastoral development and production projects that occupy large uncultivated area can enjoy reduction by half of land use fee for the first five years and can pay lower land use fee from the fifth year. The projects for agricultural development and transformation of farmland with medium and low productivity are exempt from land use fee for ten years. For the construction land with a total investment of 10 million US dollars and above, after approval of financial and land management departments, the reserved land for the invested project can be exempt from deposit of land transferring fee. Investors are allowed to pay land price by installment. Foreign businessmen who invest in reclamation of shoal and mudflat can get 100% right of use of the reclaimed area in precondition that the property right should belong to the state and according to the principle of who invests who uses. The right of use is valid for 30 years and free of land transferring fee.
  To persist in the principle of sustainable development. To encourage investment in comprehensive development and use of resources and in environment protection industry.
  Preferential policies in land use
  Foreign-invested enterprises specializing in product export or advanced technology can enjoy a 30% discount in land use fee. Foreign-invested enterprises obtaining land use right by means of transfer are exempt from land use fee since 1st September, 1999.
  Introduction of talents
  Qingdao Municipality absorbs and introduces Chinese and foreign excellent talents and overseas students to work in Qingdao and give preferential treatment to them in life, work and family. We also actively encourage Chinese and foreign excellent talents to create enterprises in Qingdao. The hi-tech fruit transformation projects which introduce excellent talents can enter into the Overseas Students Business Incubator of Qingdao, China in priority and can enjoy all preferential policies of the Business Incubator.

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Management Committee of Qingdao National High-tech Industrial Development Zone ICP:09087849