Regulations of Jiangmen Municipality on Encouraging the Development of Software and Integrated Circuit Industries (Provisional)

Document No. [2001]18 of Jiangmen Municipal Government

These regulations are stipulated in the spirit of The State Council’s Notice on Circulating Policies on Encouraging the Development of Software Industry and Integrated Circuit Industry in order to direct capital and talents to the development of software industry and integrated circuits industry and to lend impetus to the upgrading of the industrial structure of Jiangmen Municipality and to promote a rapid development of the city’s national economy.
Part I  Preferential Policies in Software Industry
  I. Financial Supporting Measures
  Article One  The municipal government shall plan to establish Jiangmen Municipal Software Industrial Park Zone to encourage investment and development in software industry in Jiangmen Municipality.
  For software enterprises established in the city’s software park zone, the land use right sale price shall be reduced to a minimum of 50% of the current price standard of the park zone.
  Foreign and domestic investors are encouraged to establish software enterprises and to development software industry in cooperation with related enterprises, institutions of higher learning and scientific research institutions. Investors who invest a minimum of 10 million yuan (or foreign capital $1 million) may apply for the status of an honorary resident of Jiangmen Municipality.
  Article Two  Invigorating the Development of Software Industry by Governmental Policies and Financial Measures
   In the “Tenth Five-year Plan” period, the municipal finance shall arrange a certain amount of fund for software enterprise loan interest subsidy, key software project establishment subsidy, software industrialization project subsidy and for software enterprises’ bank loan with the assitance of small and medium enterprises guarantee fund. Projects which use this special fund shall make application through relevant enterprises in the software park to the Municipal Planning Bureau and, after joint examinations by the Planning Bureau, the Information Bureau and the Financial Bureau, shall be listed in the city’s annual plan and submitted to the municipal government for implementation.
   Article Three  To prepare software enterprises for listed enterprises at securities markets at home and abroad, governmental departments concerned should, in their recommendation, give priority to those enterprises that are qualified for the securities market and those that are creating conditions for the market.  
II. Preferential Treatment in Fees and Charges
 Article Four  Encouraging software enterprises to congregate in the software park by giving them preferential treatments in fees and charges.
   Telephone and special line material installation charge and wire TV initial installation fee shall be reduced by 50% and communication line rent shall be 30% lower than that outside the park and electric power increase fee payment shall be defered in 2 years.
   Dam maintenance fee shall be levied at the provincial minimum rate. Software enterprises shall be exempted worksite municipal supportive construction fee, civil defense supportive engineering fee and urban district vehicle price adjusting fund.
  The government shall, according to the scale of software enterprises, provide a reasonable area of land (within 250 square meters) free of charge for 3 years for constructing development office houses. 3 years after the establishment of a software enterprise, free living houses shall be provided in the software park for major managerials and software developing workers and after the expiration, enterprises which purchase development houses and supportive living houses shall be exempted house property transaction service fee and property right registration fee.
 III. Preferential Taxation
Article Five  General value-added taxpayers who sell their own software products (including localized imported software products for export) shall, before 2010, be levied value-added tax at the legal rate of 17%, and if the part beyond the legal rate is over 3%, it shall be levied and refunded to the enterprises for their softeware products development and production expansion.
Article Six  Software enterprises shall be given preferential policies in enterprise income tax. Newly established software enterprises, when confirmed, shall enjoy the “two exemptions and three reductions” enterprise income preferential policies, beginning from the profiting year.
   Article Seven  Imported equipment used by software enterprises and techniques (including software) , supportive facilities and spare parts, except those specified in Catalogue of Foreign Investor Imported Commodities That Are Not Tax-exempted and Catalogue of Domestic Investor Imported Commodities That Are Not Tax-exempted, are exempted tariff and import value-added tax.  
Article Eight  Software enterprise managerials and technicians enjoy a deduction of 4000 yuan as subsidies and expenses before their monthy personal tax is levied. Shares and dividends awarded as bonus or benefits to employees of enterprises confirmed by authorities or provincial local tax authority, when reinvested in enterprise production and operation, shall not be calculated as personal income tax taxable wages.
Article Nine  Software enterprise’ salaries, wages and training expenses can be excluded factually from enterprise taxable income.
   IV. Export Trade and Entry-Exit Preferences
    Article Ten  Governmental departments concerned should provide software enterprises with quick and convenient service to facilitate their production and development and foreign trade departments should give priority to software enterprises in obtaining their own export right.
   Article Eleven  To facilitate communication between software enterprises at home and abroad,  investors, senior managerials and senior technicians in this city’s software enterprises can obtain Hong Kong and Macao visas free of charge and can enjoy priority in procedures of visa for investigation, study and academic exchange abroad.
Article Twelve  Public security authority, foreign affair departments and labor departments shall give priority to software investors, foreign employees and oversea students in their formalities of entry, exit, residence and employment.
Article Thirteen  Export-oriented software enterprises are encouraged to pass GB/T19000-ISO9000 quality attestation and CMM (Capacity Maturity Model) attestation. Foreign trade and economic relation departments should make every effort to obtain support from the central government’s foreign trade development fund to bear the attestation fee. Besides the effort to gain the aforementioned support, the city’s finance shall give a certain amount of subsidies to export-oriented software enterprises in the software park.
  V. Income Allotment and Awards
  Article Fourteen  Software enterprises, in accordance with the state relevant laws and regulations, may decide the total amount of wages and the average wages of their employees in the light of the enterprises’ economic conditions and the social average wages.
 Article Fifteen  Software enterprises may allow owners of patented techniques and science and technology achievements to become shareholders at a rated price and profits derived from technical achievements shared at a specified proportion.
  Article Sixteen  A stimulating mechanism shall be established in software enterprises to encourage enterprises to give ample award to scientific and technical personnel with outstanding contributions; special and direct award from the municipal government’s science and technology awarding fund shall be given to major contributors in assessed and confirmed software achievements.
   VI. Talents Absorption and Cultivation
   Article Seventeen  With a view to expanding talents cultivation scale to meet the needs of the market, municipal institutions of higher learning and secondary polytechnic schools are encouraged to open up software specialities and software technigue training classes with educational departments’ administrative service in speciality establishment, student recruiting and management and also with subsidies in teaching facility provision. Institutions of higher learning, scientific institutions, enterprises and social organizations are encouraged to establish software talents training bases in Jiangmen.
Article Eighteen  Software system technicians in software development, with software development prospect confirmed by the Municipal Bureau of Science and Technology and the Bureau of Information Industry, recommended by their employers and examined by the personnel authority, together with their spousers and children, shall be Jiangmen residents free of resident registration charge and their children shall be able to study in the city’s key schools. 
Overseas students and foreigners who establish software enterprises in this city shall enjoy the state’s and the city’s preferential policies for software enterprises. Public security departments and foreign affairs departments shall simplify procedures to ensure their free entry and exit. Public security authority approved foreigners and overseas Chinese students who are engaged in this city’s software industry and who apply to be registered as the city’s residents shall enjoy the same preferential policies enjoyed by domestic software personnel.
Article Nineteen  Senior technicians engaged in software development in this city shall enjoy the preferential policies specified in senior talents absorption proposals of the CPC Jiangmen Committee and the municipal government. Outstanding contributors in this field shall be treated as special cases for even greater awards.
VII. Purchases
Article Twenty  Software purchased by enterprises and public institutions, whose purchase cost reaches fixed assets standard or constitutes intangible property, may be calculated as fixed assets or intangible property and, with the approval of the tax authority, assests depreciation or amortization duration may be appropriately shortened to a minimum of 2 years.
Article Twenty-One  In case governmental projects or governmental department invested projects (including internet projects) need to purchase applicable software or its system, purchase priority shall be given to the products and service offered by the municipal software park at the same performance cost ratio.
VIII. Software Enterprise Confirmation and Sectional Management
Article Twenty-Two  The Municipal Bureau of Information Industry is in charge of this city’s software industry administration, supervision, establishment and organization of software industry associations and software enterprise confirmation institution.
Article Twenty-Three  Software enterprises observe confirmation and annual examination systems, in which software enterprise confirmation institution makes a list of enterprises for initial selection and annual examination and submit it to the Municipal Bureau of Information Industry for examination and approval and, after joint examination and approval according to their specified authority of power by the information bureau, the Municipal Finance Bureau and tax authority, enterprises with valid certificates can finalize their formalities at relevant departments and enjoy their legal rights for the relevant preferential policies.
Part II. Preferential Regulations on Integrated Circuit Industry
Article Twenty-Four  Foreign enterprises and domestic enterprises are encouraged to invest in joint ventures or wholly-invested integrated circuit (including basic elements) enterprises. Qualified enterprises shall enjoy even greater preferential treatments from the municipal government, in addition to the preferential treatments given to software industry enterprises in Taiwan Industrial Park and the Hi-tech Industrial Park.
Article Twenty-Five  General value-added taxpayers who sell their own integrated circuit products (including monocrystalline silicon plates) shall, before the end of the year 2010, be levied value-added tax at the legal rate of 17%, and if the part beyond the legal rate is over 6%, it shall be levied and refunded to the enterprises for their integrated circuit products development and production expansion.
Article Twenty-Six  Integrated circuit techniques and sets of production equipment imported by integrated circuit enterprises and separate imported integrated circuit special equipment and instruments shall be handled in accordance with Foreign Investment Industries Guide and Catalogue of State-encouraged Industries, Products and Techniques and shall be exempted tariff and import value-added tax.
Article Twenty-Seven  The minimum depreciation period of productive equipment of integrated circuit enterprises, with approval of tax authority, can be 3 years.
Article Twenty-Eight  Integrated circuit design enterprises and their integrated circuit designs shall enjoy the same preferential treatments given to software enterprises and products.
Article Twenty-Nine  The confirmation of this city’s integrated circuit enterprises shall be effected by the project approving department with the consent of the tax department.
Supplementary Articles
Article Thirty  Software enterprises and integrated circuit enterprises in this city, regardless of the nature of ownership, shall enjoy the state’s software industry development and integrated circuit industry development policies as well as these regulations. Software enterprises in Jiangmen Software Park enjoy the special preferences of the Park specified in these regulations.
Article Thirty-One  The county-level cities and districts can stipulate their own preferential measures in the light of these regulations.
 Thirty-Two  These regulations are subject to Jiangmen Municipal People’s Government interpretation and come into effect upon their promulgation.
All Informations comes from Jiangmen Municipal Government 
Translator:ZhouYubo,JiangMen Translators Association

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