Preferential Policies for Foreign Investment
2004-03-01 18:00
Legal Guarantees The regional government give
foreign-invested projects priority through each step of the
formation process in planning, project approval, provision
of capital, construction start-up, establishment of the
business itself and registration. The regional government
protects the legitimate rights of foreign businessmen
according to law. Foreign businesspeople with an interest in
a wholly foreignowned enterprise or a joint venture may
empower friends or relatives in China to act as their agent
regarding that interest provided that they have legally
valid power of attorney; likewise, they may transfer
possession or distribute in succession said interest When a
foreign businessperson decides to cede his interest to the
Chinese government for compensation or when the state
proceeding from public interest requires the appropriation
of that interest, such actions will be taken through legal
procedures and appropriate compensation given.
In disagreements arising during the
performance of a contract or other contract related disputes
involving a foreign businessperson, the concerned parties
should make their best efforts to seek a negotiated
settlement If any of the concerned parties refuse the
negotiated settlement or if a settlement can not be reached,
the foreign businessperson may petition the Trade
Arbitration Committee of the Tibet Autonomous Region for
arbitration.
With the consent of all parties
to the contract, application may be made to national or
provincial-level arbitration organizations in China or to
international arbitration organizations. Land Use Foreign
businesspeople who invest in Tibet can buy building property
and land use rights for terms ranging from 50 to 70 years.
A wholly foreigninvested enterprise with a
period of operation exceeding ten years is exempt from city
land use tax during the approved construction period if it
occupies state-owned land and from cultivated land
occupation taxes if it occupies cultivated land.
During the eight years following the start of
operations it will pay half of normal land use taxes.
Enterprises with a period of operation less than ten years
occupying cultivated land are exempt from cultivated land
occupation taxes and from city land occupation taxes during
the period of construction joint ventures, Sino-foreign
cooperative enterprises and other joint operations using a
site currently under the control of a Chinese partner or
newly occupying approved state-owned land, are exempt from
city land use taxes during the approved construction period
and, if they occupy cultivated land, from cultivated land
occupation taxes.
They are further exempted
from land use taxes for eight years following the start of
operations. Production-type foreign-invested enterprises
receive preferential treatment regarding land use fees.
Mining in Tibet is non-gratuitous Compensation is to be
given according to law With the approval of the regional
government, all mineral resources not specifically excluded
by state statute can be exploited by foreign businesspeople.
The foreign entity may participate in a joint
venture or a cooperative enterprise or operate as wholly
foreign-owned enterprise in prospecting and mining. China's
"Mineral Resources Law" and "Provisions for
Mineral Resources Compensation Levies and Their
Management" state that resources tax and resources
compensation are to be collected from all miners regardless
of their economic status or form of operation or the type of
mineral resource exploited (including, e.g., geothermal
energy, sandstone used in brick and tile making, sandshale
used in building, clay, granite and marble).
Import-Expert Trade the government encourages
and supports Tibetan enterprises and joint ventures which
choose to set up sole proprietorships or joint operations in
neighboring counties to produce goods for sale exclusively
outside of China using raw materials, semi-manufactured
goods or technical facilities from within or without the
region.
Foreign trade enterprises are
permitted to swap imported goods with other provinces and
regions in China for materials needed for engineering
construction, production or daily life in Tibet. The Foreign
Economic Relations and Trade Bureau of the Tibet Autonomous
Region is authorized to issue permits setting import and
export commodity quotas with approval of the responsible
state-level department, in addition to commodities exported
under unified state management through tender offer and
commodities imported by state-stipulated specialized
companies.
Border Trade All goods, whether
produced by enterprises in Tibet, other provinces of China
or other countries, can be sold in border markets Permits
for import and export commodities can be obtained from local
border trade administrative departments author ized by the
Foreign Economic Relations and Trade bureau of the Tibet
Autonomous Region.
Commodities imported at
border markets can be sold elsewhere in China after approval
by the government of the Tibet Autonomous Region. Taxation
Industrial and commercial taxes, income tax and customs tax
are reduced or remitted to varying degrees depending on the
amount invested by the foreign businessperson, type of
product produced and length of investment.
Earnings from a production-type enterprise set
up by a foreign businessperson in Tibet are subject to a ten
percent business earnings tax beginning the first year the
enterprise shows a profit: the enterprise is exempt from
local taxes on earnings. Production-type enterprises working
in energy, trans portation, agriculture or animal husbandry
with a period of operations in excess of ten years are
exempted from business earnings taxes for the first five
years after they show a profit; business earnings taxes are
then paid at a 50 percent discount for the subsequent three
years.
Enterprises engaging in processing
agricultural or animal by-products or other processing or
the manufacture of traditional handicrafts and tourist
commodities with a period of operation in excess of ten
years are exempted from taxes on earnings from the first
four years after showing a profit: taxes on earnings then
receive a 50 percent discount for the next two years.
Tour smelted enterprises capitulated with an
investment of over US$ five million or RMB Y30 million with
a period of operation in excess of ten years are exempted
from taxes on earning for three years after showing a
profit, receiving a 50 percent discount on taxes on earnings
the following year. Enterprise that do not meet the above
descended standards are exempted from taxes on earnings for
the first two years of operation and receive a 50 percent
discount on taxes on earnings for their third year.
Foreign business entities that do not maintain
a physical presence in Tibet but receive stock dividends,
interest, rents, proprietary right use fees or other
revenues from Tibet pay a seven percent tax on earnings,
unless legally exempt If a foreign businessperson reinvests
profits earned from a business in Tibet in another operation
in Tibet or use profits to expand production for a period no
less than five years, he will be returned all his tax
already paid on earnings from his investment He pays all
other taxes than those on earnings as other enterprises of
the same type in Tibet do.
Foreign
businesspersons are permitted to use RMB in place of foreign
exchange for tax payments. When a foreign businessperson
remits his profits or when a foreign staff member remits his
personal income outside of China he will be exempted from
income tax on the remitted amount. Any enterprise with
exports revenue accounting for more than 50 percent of sales
revenue in a given year will receive a 50 percent discount
on taxes on earnings for that year, in addition to the above
exemptions and reduced rates.
That portion of
a foreign business entity's investment that goes for
machinery, equipment, building materials, miscellaneous
parts and components used in the enterprise is exempt from
import taxes and the industrial and commercial consolidated
tax Likewise, reasonable quantities of imported office
appliances, household items and vehicles for the foreign
businessperson's own use are exempt from import taxes and
the industrial and commercial consolidated tax; such
articles do not require an import permit, only customs
inspection.
Imported raw materials, accessory
materials, packing materials, miscellaneous parts and
components used in manufacturing or processing products
exclusively for export are exempt from import taxes and the
industrial and commercial consolidated tax. If only a
portion of such goods produced are for export, that portion
of imported materials and parts used for export production
is exempt from import taxes and the industrial and
commercial consolidated tax, while the remaining portion
used U1 goods sold m China receives a 50 percent discount on
import taxes and the industrial and commercial consolidated
tax.