(Adopted at the third session of the Standing Committee of the Seventh People's Congress of Zhejiang Province on May 18, 1988, revised at the fourth session of the Standing Committee of the Eighth People's Congress of Zhejiang Province in accordance with the Decision on the Revision of the Regulations on Ningbo Economic and Technological Development Zone on May 8, 1993, promulgated on the same date and go into effect on May 12, 1993.)
Chapter I General Provisions
Article 1. These regulations are formulated in accordance with the Constitution of the People's Republic of China and the pertinent laws and regulations of the People's Republic of China.
Article 2. As approved by the State Council of the People's Republic of China, Ningbo Economic and Technological Development Zone (hereinafter referred to as ETDZ) ,which lies in the Beilun District of Ningbo, shall be established and shall cover an area of 29.6 sq km.
Article 3. Following the principle of integrating the economic and technological cooperation with both the overseas and the domestic, the ETDZ shall be devoted to attracting foreign capital, importing scientific management, developing technologically high and advanced enterprises and infrastructural enterprises, establishing the tertiary industry and promote the opening and economic development of Ningbo as well as the Province of Zhejiang.
Article 4. Overseas and domestic enterprises, other economic bodies or the individuals are encouraged to invest and establish the export-oriented enterprises, technologically advanced enterprises, scientific research institutions, or to invest and set up infrastructural facilities in the ETDZ.
Article 5. Overseas and domestic enterprises, other economic bodies or the individuals are encouraged to invest, develop and operate tracts of lands in the ETDZ.
Article 6. Overseas and domestic enterprises, research institutions, universities or the individuals are encouraged to carry out various types of technological cooperation in the ETDZ.
Article 7. The following advanced technologies should be imported in priority in the ETDZ:
1.The advanced and high technologies which are decided as the focal points to develop by the state government or the province of Zhejiang,
2.Which can obviously promote the technological improvement of the domestic enterprises or the renewal of their products,
3. Whose products can get exported or can substitute for the import,
4. Whose productive technology is in urgent need in the domestic,
5.Or which is beneficial for certain domestic industry or products to overtake the world's advanced standard.
Article 8. Foreign-trade enterprises can be set up in the ETDZ, and the foreign-trade enterprises outside the ETDZ are encouraged to set up their branches in the ETDZ and operate import and export businesses.
Article 9.The following industrial enterprises are prohibited in the ETDZ:
1.The enterprises with backward technologies or equipments,
2.Causing environment pollution without effective measures of prevention,
3.Or which are prohibited by the Chinese laws or regulations.
Article 10. The investor's property, due profit and other lawful rights shall be protected by the Chinese laws, regulations as well as this document.
Enterprises, organizations and individuals in the ETDZ shall observe the laws, regulations of the People's Republic of China as well as this document.
Chapter II Administration
Article 11.The Administrative Committee of the ETDZ (hereinafter referred to as the ETDZAC) is established by the People's Government of Ningbo Municipality, and shall take the responsibility to direct and administer the ETDZ within the scope of authority on behalf of the People's Government of Ningbo Municipality.
Article 12. The ETDZAC shall take the following functions and powers authorized by the People's Government of Ningbo Municipality:
1.Drafting the overall plan and the plan of the economic and social development of the ETDZ and organizing the implementation upon approval,
2.Formulating the regulations on the administration of the ETDZ,
3.Examming and approving investment projects in the ETDZ,
4.Managing the administrative affairs of finance, revenue, labor ,personnel, public security and industry & commerce in the ETDZ,
5.Managing the land and the real estate business in the ETDZ,
6.Ensuring the enterprises' operational autonomy in the ETDZ
7. Administering the import & export and the economic and technological cooperation with the outside,
8.Cheching, supervising and coordinating the work of the branches or agencies assigned to the ETDZ by relevant departments of the People's Government of Ningbo Municipality,
9.Dealing with the foreign-related affairs,
10.Managing the protection of environments and cultural relics in the ETDZ
11.Initiating and managing the public welfare work,
12.Other functions and powers authorized by the People's Government of Ningbo Municipality.
Article 13. The ETDZAC can set up operating divisions to be in charge of the specific affairs in the ETDZ, if necessary.
The relevant departments of the People's Government of Ningbo Municipality should offer vocational guidance to the operating divisions of the EDDZAC, support and cooperate with the work of the EDDZAC.
Article 14.The administration concerning finance, insurance, foreign currency, customs, inspection of the import and export of goods, and quarantine of animals & plants shall be administered by the relevant departments of the People's Government of Ningbo municipality or their branches set up in the ETDZ.
Chapter III Investment and Operation
Article 15.The following forms are adoptable in the ETDZ:
1.Sino-foreign equity joint venture,
2.Sino-foreign cooperative joint venture,
3.Exclusively foreign-owned enterprises,
4.Independent operation or joint operation by the domestic investors,
5.Sino-foreign compensation trade,
6.Business operations under lease,
7.To purchase the stocks and bonds of the enterprises in the ETDZ,
8.And other forms been permitted by the laws, regulations of the People's Republic of China.
The enterprises taking the first three forms will be referred to as foreign-invested enterprises hereinafter.
Article 16. To invest and establish enterprises or institutions in the ETDZ, the investor shall make application to the ETDZAC, after receiving approval, obtain the certificate of right to the use of land and register with the industry and commerce administration department and the taxation authorities.
Article 17.With the approval of the People's Bank of China, foreign-capital bank, Sino-foreign joint venture bank or other financial institutions can be established in the ETDZ.
Article 18.A foreign-invested enterprise shall open an account in the Branch of the People's Bank of China in the ETDZ or other banks and financial institutions being licensed to the foreign currency operations by the foreign exchange control office of the People's Republic of China
Article 19.A foreign-invested enterprise in the ETDZ shall procure insurances from the Branch of the People's Insurance Company of China in the ETDZ or other insurance companies being licensed by the state government.
Article 20.A foreign-invested enterprise in the ETDZ shall keep a complete set of account books in the ETDZ, submit accounting statements and statistical reports in accordance with the legal provisions and be subject to the supervision of the ETDZAC.
Article 21.Within the scope stipulated in the approved contract or articles, a foreign-invested enterprise in the ETDZ is entitled to autonomy in formulating its own production or business program, raising and using funds, purchasing raw materials and selling its products, deciding the standards and forms of wage and the rules upon rewards and subsidies, deciding the organization and the size of staff, engaging or discharging operators or managers, employing or dismissing workers.
Article 22.While the operating period expires or the enterprise located in the ETDZ decides to end the business ahead of the due time, the enterprise shall liquidate its assets, credits and debts undergo formalities for closure of business in accordance with legal procedure. After the cancellation of the business license, the investors' asserts can be transferred, and the capital of foreign investors can be remitted abroad in accordance with relevant rules.
Chapter IV Preferential Treatment
Article 23.Production-oriented enterprises with foreign investment in the ETDZ shall be subject to enterprise income tax at the reduced rate of 15%. Among these enterprises, those scheduled to operate for a period of ten years or more, upon approval by the tax authorities in the ETDZ, shall be exempt from income tax in the subsequent two years since the first profit-making year, and be allowed to a reduced tax rate of 7.5% in the third through the fifth years.
Article 24.Export-oriented enterprises with foreign investment shall pay enterprises income tax at a reduced tax rate of 10%, for any year in which the output value of the export products of the enterprise amounts to 70% or more of the output value of the products of the enterprise for that year. Those enterprises scheduled to operate for a period of ten years or more can, after the period of reduction and exemption stipulated in the second section of Article 23 has expired, pay enterprise income tax at a reduced rate of 10% for any year in which the output value of the exports products of the enterprise amounts to 70% or more of the output value of the products of the enterprise for that year.
Article 25.Technologically advanced foreign-invested enterprises in the ETDZ can pay enterprise income tax at a reduced rate of 10% in the subsequent two years since the first profit-making year. Those enterprises that scheduled to operate for a period of ten years or more and remain as technologically advanced enterprises after the period of reduction and exemption stipulated in the second section of Article 23 has expired, the payment of enterprise income tax at a reduced rate of 10% may be extended for a period of three years.
Article 26.Production-oriented enterprises with foreign investment in the ETDZ shall be exempt from local income tax in the subsequent five years since the first profit-making year. Those scheduled to operate for a period of ten years or more, if it can satisfy the conditions the government of Zhejiang province set, may be exempt from local income tax in the subsequent six or ten years since the first profit-making year. If an exemption is still necessary after these periods of exemption expire, it depends on the decision of the ETDZAC.
Article 27.Lossees incurred in a tax year by any foreign-invested enterprise in the ETDZ may be made up by the income of the following tax year. If the income of the following tax year is not ample, the making up may continue no more than five years.
Article 28.At the beginning of the establishment, upon approval, a foreign-invested enterprise in the ETDZ may be exempt from the consolidated industrial and commercial tax if there is difficulty in paying.
Article 29.Any of the foreign investors reinvesting its share of profit obtained from the foreign-invested enterprise to his own enterprise or other enterprises in the ETDZ to operate for a period of not less than five years, upon approval by the tax authorities in the ETDZ, can be refunded 40% of the income tax already paid on the reinvested amount. If the profit is invested to export-oriented enterprises or technologically advanced enterprises, all the income tax paid on the reinvested amount can be refunded. The refunded income tax shall be paid back if the investment is withdrawn within five years.
Article 30.The profit obtained by a foreign investor from the foreign-invested enterprises in the ETDZ can be remitted out of China and is exempt from the income tax within the remitted amount.
Article 31.Excepting those items being free of income tax in accordance with the law, dividends, interests, rentals, royalties and other income derived from sources within the ETDZ by a foreign investor having no establishments in China can be subject to income tax at a reduced tax rate of 10%. Those who provide capital or equipment on preferential terms or transfer advanced technology can enjoy a preferential treatment of further tax reduction or tax exemption upon the approval of the ETDZAC.
Article 32.Building materials, production equipment, raw materials, spare parts, fittings, means of transport and office supplies imported by the foreign-invested enterprises in the ETDZ for their own use shall be exempt from custom duties and consolidated industrial and commercial tax. Where the products made from the imported duty-free raw materials, spare parts or fittings were diverted for sale on the domestic market upon approval, the enterprise shall make up the custom duties and the consolidated industrial and commercial tax in accordance with the relevant rules.
Article 33.The articles for family use and means of transport imported by a foreigner working or dwelling the ETDZAC can, with the verifying documents by the ETDZAC and within the reasonable quantity, be exempt from import tariffs and consolidated industrial and commercial tax .
Article 34.The products of the foreign-invested enterprises in the ETDZ shall be exempt from custom duties and consolidated industrial and commercial tax when export, if there is no otherwise prescription by the state.
Article 35.Upon the approval of the ETDZAC, a foreign-invested enterprise in the ETDZ can enjoy the reduction or exemption of the land-use fee and site-developing fee.
Article 36. With its own property as mortgage, a foreign-invested enterprise in the ETDZ can apply for renmingbi loans from a bank which locates where the ETDZ is, or it can take foreign exchange owned by itself as mortgage to apply for a renmingbi loan from the People's Bank of China or the financial institutions authorized by the People's Bank of China.
Article 37. A foreign-invested enterprise in the ETDZ can adjust the surplus and deficit of its foreign exchange upon the approval of the foreign exchange control office.
Article 38. Foreign-invested enterprises in the ETDZ enjoy right of priority in the supply of water, electricity, transportation and facilities for communication that are necessary for the production and operation. The charge of water and electricity shall take the same standards as other kinds of enterprises in the ETDZ.
Article 39.The independent-operating or joint-operating enterprises invested by domestic investors in the ETDZ may enjoy the preferential treatments stipulated by the Government of the state, the People's Government of Zhejiang Province or the People's Government of Ningbo Municipality.
Chapter V Supplementary Provisions
Article 40.Those foreign-invested enterprises having established in the former Industry Area of Beilun Port, Which are not combines in the ETDZ, shall enjoy the preferential treatments toward the foreign-invested enterprises in the ETDZ, and those established after October 21, 1992 may enjoy the same preferential treatments upon approval by relevant departments, if it belongs to technology-intensive or capital-intensive enterprise.
Article 41.The enterprises invested in the ETDZ or the former Industry Area of Beilun Port by overseas Chinese, individual investors from Hong Kong, Macao or Taiwan, or their enterprises or economic institutions, is subject to the rules concerning the foreign-invested enterprises stipulated in these regulations.
Article 42.The power of construction on these regulations is authorized to the People's Government of Ningbo Municipality.
Article 43.These regulations shall go into effect on the date of promulgation.
