Ⅰ.Enjoyment of the Direct Import & Export Right

All the approved enterprises with foreign investment enjoy the direct import and export right . Except for items the import and export of which the state has set a restriction on , they are , upon approval , allowed to directly import machines , equipments , spare parts , other articles and raw material necessary for the production and directly export their own products within the ratified business scope.

Ⅱ.Preferential Treatment in Taxation

1. Enterprises with foreign investment officially approved for the establishment before March 31,1996 and confirmed after having been put on file shall be allowed exemption of importing equipments and raw materials for their own use and within total invested capital and the exemption shall be valid until the said import have been completed .When enterprises with foreign investment approved for the establistment in accord with state - stipulated procedures between April 1,1996 and December 31,1997 and projects with foreign investment which underwent capital increase during thisperiod import equipments , the said equipments shall be free from import duties and value- added tax in import link except for goods listed in the "Catalogue of Import Commodties of Project with Foreign Investment not Allowed to Enjoy Tax Exemption." When enterprises with foreign investment approved after January 1,1998 which fall under the encouraged categories and restricted category(B) of "catalogue for the Guidance of Foreign Investment Industries" and which involve transfer of technolgy import equipments for their own use and within total invested capital shall be allowed exemption of import duties and valus - added tax in import link except for goods listed in the " Catalogue of Import Commodities of Projects with Foreign Ivestment not Allowed to Enjoy Tax Exemption " .
2. Enterprise with foreign investment approved for the establishment before December 31,1993 shall be allowed exemption of value - added tax and consumption tax when exporting directly their own products . If tax burden is increased due to the levying of valueadded tax , consumption tax and business tax according to the new regulations in 1994, the amount of tax overpaid due to the increase of tax burden shall be reimbursed when application by enterprises is approved by a tax authority . Starting from January 1,1999,a new policy shall take effect , namely " exemption , compensation and reimbursement . " The taxation policy of "exemption , compensation and reimbursement " shall be applicable to products directly eported by enterprises with for eign investment approved for the establishment after January 1,1994. " Exemption " of tax means that when enterprises directly export or entrust foreign trade agents for the export , the said enterprises shall be allowed exemption of value - added tax arising from their own production and sale links . By " compensation " it is implied that the amount of tax to be levied on goods marketed domestically shall be compensated with the amount of tax already levied on the raw materials and components and parts involved in the production of goods exported either directly by enterprises themselves or by their entrusted foreign trade agents which should otherwise be exempted or reimbursed . By " reimbursement " it is inteded that when enterprises directly export or entrust foreign trade agents for export and the goods being exported exceed 50% of the total sales of goods of the enterprises in a same period , the amount of tax not yet used for compensation shall be reimbursed with an approval from a tax authority in charge of reimbursement affairs if during a quarter of the year , the compensation of tax have not been entirely used owing to the fact that the amount of tax usable for compensation is larger than the amount of tax to be levied .
3. When enterprises with foreign investment import raw materials , elements and spare parts , packing material etc in order to fulfill the expout contracts of products , these materials shall be supervised and administered as bonded goods at first and import license exempted upon examination and approval by a foreign trade and economic co - operation institution , upon checking and issuance of "Entry Book " by the Customs and after an earnest money account is opened at a bank . The Customs shall make verification of comtracts of import and export contracts of the enterprises . After that , the import duty and value - added tax reduction or exemption shall be allowed when verification of export sale has been made.
4. The income tax on enterprises with foreign investment which engage in production and technical research shall be levied at the reduced rate of 24% as is the case in the economic opening zones . Enterprises with foreign investment which engage in production and operate for a period of over 10 years shall be exempt from income tax for the first two profit - mating years and allowed a 50% reduction for the following three years when applications by them are approved by a tax authority . Technology advanced enterprises shall be allowed 50% income tax reduction for another three years after the stipulated income tax exemption and reduction period expires . Export - oriented enterprises shall further be allowed a 50% income tax reduction for the year when the output value of products exported surpass 70% of the output value of the products of the same year after income tax exemption and reduction period expires
5. If foreign investors invest in technology - intensive and knowledge - intensive projects , invest in projects of which the investment exceeds USD30 million with a long investment payback period or invest in infrastructure projects such as energy and communication , the income tax on the enterprises shall be levied at the reduced rate of 15% .
6. If enterprises with foreign investment pay local income tax amounting to 10% of the required income tax , they shall enjoy the same preferential policies concerning income tax and be given the preferential treatment of a same reduction and exemption rate (as provided by the foregoing article 3, chapter 2) .
7. If losses occur to enterprises with foreign investment , profits of the following year are permitted to be allotted for making up . If profits are not sufficient for the making up, profits of the following years are permitted to be allotted . however, the longest making - up period is 5 years.
8. If profits obtained from the invested enterprises by enterprises with foreign investment are reinvested in the original enterprises or other enterprises which operate for a period of over 5 years , 40% of the income tax already levied on the amount of reinvestment shall be reimbursed . If the reinvestment are made in export oriented enterprises or technology advanced enterprises which operate for a period of 5 years or over , the income tax already levied on the amount of reinvestment shall be totally reimbursed and , in case the said investment are withdrawn when5 -year operation period has not been reached , the reimbursed income tax on the amount of investment withdrawn should be handed back. .
9. Profits obtained by foreign investors from enterprises with foreign investment are permitted to be remitted abroad free of duty .

Enterprises with foreign investment established in the industrial quarters of Keqiao Economic Development Area , Chengnan Development Area and other foreign investment areas approved by the county government enjoy the following preferential treatment :

1.Once an actual foreign contribution ranging from USD100,000 to less than USD 500,000to an enterprise with foreign investment is made , arrangement shall be permitted for one quota of changin farmer's registerd card into non-farmer's registered card accordin to regulations . If the actual foreign contribution exceeds USD 500,000 , arrangement for two quotas shall be permitted .

2.If a foreign partner of an enterprise with foreign investment invests USD 500,000 or more than USD 500,000and the actual contributions by both the Chinese and foreign partners of their subscribed capital have been totally made and upon verification by certified public accountant (s) , a piece of land of certain area shall be amortized to the foreign partner on preferential terms and construction of residence house ofr villa permitted .