(Adopted at the 19th Session of the Standing Committee of the 10th People's Congress of Ningbo Municipality on August 9 1995, approved at the 25th Session of the Standing Committee of the 8th People's Congress of Zhejiang Province on December 26 1995, promulgated by Public Notice No. 9 of the Standing Committee of the People's Congress of Ningbo Municipality on January 15, 1996, and go into effect as of the date of promulgation)
Chapter I
General Provisions
Article 1.These Regulations are formulated in accordance with the 'Law of the People's Republic of China on Protection of Investment by Compatriots from Taiwan' and relevant laws and regulations and in consideration of the actual circumstances of Ningbo municipality, in order to safeguard and encourage the compatriots from Taiwan to invest in Ningbo, and promote the economic development of both Ningbo and Taiwan.
Article 2.The investment by compatriots from Taiwan stated hereof refers to the investment in Ningbo made by the companies, enterprises, other economic entities established on Taiwan or abroad or individuals of Taiwan compatriots.
Article 3.The investment, investment returns and other legal rights and interests shall be subject to the protection of the law.
Investors of Taiwan compatriots shall abide by the laws, decrees and regulations.
Article 4.The people's government at various levels of Ningbo Municipality and related departments shall handle the matters of investment by compatriots from Taiwan in accordance with the law.
Chapter II
Investment
Article 5.Investors of Taiwan compatriots may obtain ' the certificate of identification of investors of Taiwan compatriots' issued by Taiwan Affairs Office under the local people's government at or above the county (city, district) when investing in Ningbo.
Article 6.Investors of Taiwan compatriots may appoint their relatives or friends as their agents. The agents should hold legally effective letters of authority.
Article 7.The investments made by investors of Taiwan compatriots may take the following forms:
(1)To establish equity or contractual joint ventures , or enterprises with the capital wholly owned by Taiwan compatriots (hereinafter referred to as enterprises with investment by Taiwan compatriots) ;
(2) To participate in the share of stocks or purchase the existing enterprises;
(3) To purchase stocks and bonds of the existing companies and enterprises;
(4) To purchase real estate;
(5) To obtain land use right according to the law and to engage in land development operations under regulated conditions;
(6) To participate in the building of energy, transportation and other infrastructure projects;
(7) To participate in the exploitation and building of places of tourism
(8) to adopt other forms of investment permitted under the laws and regulations.
Article 8.Investors of Taiwan compatriots shall make investments in accordance with Industrial Catalogue for Guiding promulgated by the state. They are encouraged to invest in the following projects:
(1) Projects of infrastructure such as energy, transportation and harbors, and of fundamental industries of key raw materials;
(2) Projects of introduction of new agricultural technology and fine breeds, and of comprehensive agricultural development;
(3) Productive projects that can adopt high-level technology, produce new products, meet market demands, and promote the capacity of exportation;
(4) Projects of new and high technology, and of new industries;
(5) Projects of comprehensive utilization of resources and of environment protection;
(6) Projects of transformation of the existing industrial enterprises;
(7) Projects of public utilities such as medical and public health, physical culture and education.
(8) other projects encouraged by the state, province and municipality.
Article 9.Investors of Taiwan compatriots may make investments by using freely currencies, machinery and equipment or other physical goods, industrial property right, and proprietary technology and profits, dividends or other legal returns.
Article 10.Investors of Taiwan compatriots may be approved to set up commercial institutions in Ningbo to take on commercial practices in accordance with the state laws and regulations.
Article 11.Investors of Taiwan compatriots may be approved to set up intermediary institutions in Ningbo to take on activities such as information and consultant.
Article 12.Investors of Taiwan compatriots may set up seats for products from Taiwan in various exhibitions held in Ningbo in accordance with regulations, or be approved to hold exhibitions and exhibitions for sale of products from Taiwan.
Article 13.Investors of Taiwan compatriots may be approved by People's Bank of China to set up financial institutions in Ningbo in accordance with the state laws and regulations.
Article 14.Investors of Taiwan compatriots may make a deal on interior and exterior trade with the companies and enterprises having the right of self-managed import and export in Ningbo.
Chapter III
Establishment and Management of the Enterprises
Article 15.The proportion of investment contributed by investors of Taiwan compatriots shall in general be no less than 25 per cent among the whole registered capital of the equity joint ventures.
Article 16.With respect to the enterprises with the capital wholly owned by investors of Taiwan compatriots, their period of operation shall be determined by the investors themselves; as to equity and contractual joint ventures their period of operation shall be determined, through consultation, by the various parties to the ventures, they may also choose not to stipulate a period of operation.
Article 17.The composition of the board of directors of equity joint ventures and the appointment of the chairman of the board of directors, the composition of the board of directors or of the joint managerial organs of contractual joint ventures and the appointment of the chairman or the appointment of the director of the joint managerial organs, shall be determined, through consultation, by the various parties to the equity or contractual joint ventures in light of the proportion of investments or the terms of contract.
Article 18.With respect to equity and contractual joint ventures to be established in Ningbo with investments by investors of Taiwan compatriots , the application for the establishment of the aforesaid enterprises shall be filed by the mainland party; as to the enterprises to be established with capital wholly owned by investors of Taiwan compatriots, the application shall be filed directly by the investors themselves, or they may entrust their relatives or friends residing on the mainland, or entrust the institution providing advisory services, with the application.
The applications for the establishment of enterprises with investments by investors of Taiwan compatriots shall be accepted and handled, in a unified manner, by the competent department in charge of foreign economic relations and trade in Ningbo Municipality.
With respect to the examination and approval of the application for the establishment of enterprises with investments by Taiwan compatriots , the competent departments in charge of foreign economic relations and trade in Ningbo Municipality shall, within forty-five days dating from receipt of complete application documents, make the decision on whether the said application is approved or disapproved.
The applicants shall, within thirty days dating from receipt of the written approval, file an application for registration to Ningbo Administration for Industry and Commerce, and obtain business licences, in accordance with the relevant provisions on registration and administration.
Ningbo Administration for Industry and Commerce shall inform the applicants of the list of all the documents needed and requirements at the first time when they ask for registration , and within fifteen days dating from receipt of complete application documents, make the decision on whether the said application is approved or disapproved.
Article 19.Enterprises with investment by Taiwan compatriots may be approved by customs to set up bonded factories, and bonded warehouses.
Article 20.Enterprises with investment by Taiwan compatriots may employ managerial persons and staffs on or outside china's mainland. The relevant departments shall handle the matters of procedures for employment in accordance with the law.
Article 21.If investors of Taiwan compatriots or their appointed agents employ their relatives on China's mainland in the enterprises invested by themselves, the household registers of their relatives may have priority in being shifted to the locality of the enterprises and changed into the non-agricultural ones. With respect to the enterprises with investment by Taiwan compatriots whose actual total investment is more than 100,000 USD but less than 50,000 USD, one of their relatives on China's mainland may be arranged, and to those with actual total investment more than 50,000 USD, two may be arranged.
Article 22.Enterprises with investment by Taiwan compatriots may obtain loans from financial institutions of China's mainland or from financial institutions outside China's mainland, and may use their assets as well as their rights and interests as mortgage or security.
Article 23.The net profits , dividends , bonus , the funds after liquidation gained by the investors of Taiwan compatriots and their other legal income may be remitted out of China's mainland according to the law.
The salaries and other legal income of the staff employed in the enterprises with investment by Taiwan compatriots may be remitted or carried out of China's mainland according to the regulations.
Article 24.Enterprises with investment by Taiwan compatriots shall conduct their managerial and operational activities in accordance with the laws ,regulations and articles of association. The decision-making power for business operations and management of the enterprises shall not be interfered with by any unit and person.
Article 25.Investors of Taiwan compatriots may apply for patents and do other affairs related to patents , and apply for trademark registration and do other affairs related to trademark.
Article 26.Without the backing of laws, regulations, provisions and clear stipulation by people's government of Zhejiang Province, any department or unit should not invent other items of charge or raise the standards of charge on the enterprises with investment by Taiwan compatriots.
Article 27.Without the backing of laws, regulations , provisions and clear stipulation by people's government of Zhejiang Province, any department or unit should not make an inspection of the enterprises with investment by Taiwan compatriots ,nor force them to take part in various kinds of training, competition and patronage.
Article 28.The legal rights and interests of Ningbo enterprise association of Taiwan compatriots which is set up according to the law are subject to the protection of the law.
Chapter IV
Preferential Treatment
Article 29.The projects of encouraged Taiwan compatriots investment shall enjoy the following preferential treatments, in addition to those provided by the laws and regulations:
(1) To be given priority in obtaining land, water, electricity, transportation services and telecommunication facilities needed;
(2) To be given priority in receiving loans from bank for revolving funds needed for production and operation on the same terms and conditions;
(3) To be given priority in obtaining the license for production and operation in related fields;
(4) The productive enterprises with investment by Taiwan compatriots
scheduled to operate for a period of 10 years or more may, be exempted
from local income tax in the first five profit-making years ; and if they
meet the requirements of exemption from local income tax regulated by
the people's government of the province, they may also be exempt from the said tax in the sixth to tenth profit-making years.
(5) To be exempt from land use fees in five years dating from running.
Article 30.Investors of Taiwan compatriots who reinvest their shares of profits from their enterprises located in Ningbo in the enterprises themselves or other enterprise for a period of operation of not less than five years, after approval by the tax authorities, shall be refunded forty percent of the total amount of enterprise income tax already paid on the reinvested portion; when reinvesting in order to establish or expand product-for –export enterprises or technologically advanced enterprises, they shall be refunded the total amount of enterprise income tax already paid on the reinvested portion.
Article 31.The projects with total investment more than USD10 million invested by
Taiwan compatriots and belonging to the encouraged productive projects shall enjoy the following preferential treatments at the same time by approval:
(1) To expand the scope of business operation concerned;
(2) To enjoy the preferential treatments provided for enterprises located in the economic and technological development area by the province and municipality;
(3) Proper preference on price of demising the land.
Article 32.The projects of construction of infrastructures such as energy and transportation invested by Taiwan compatriots may obtain the franchise of operating the project or the right of operation of the project which is of coordination with and compensation for the said project.
Article 33.The proportion of the export products may not be imposed on the productive projects invested by Taiwan compatriots which are compatible with the direction of encouraged industries and can achieve by themselves the balance between revenues and expenditures in foreign exchange.
Article 34.The projects invested by Taiwan compatriots at Trade with Taiwan Processing Zone located at Shipu, Ningbo shall be given priority in being examined and approved, and enjoy preferential treatment provided in NO.29 of these regulations after approval.
Chapter V
Entry into and exit from the country
Article 35.Investors of Taiwan compatriots enter into and exit from Ningbo with 'the pass for entry into and exit from China's main land for Taiwan residents' and other valid visas. They may apply for and be approved to get the valid visa for multiple-journey travels and go through the additional registered procedure of provisional residence when they need multiple-journey travels.
Article 36.Investors of Taiwan compatriots may apply for common passports of Chinese citizenship at the public security authorities, if they need to go to other countries on business .
Chapter VI
Civil treatment
Article 37.Investors of Taiwan compatriots, their family dependents coming with them and the employees from Taiwan hired by their enterprises invested who have gone through the additional registered procedures of provisional residence (hereinafter referred as Taiwan compatriots residing in Ningbo in short ) shall enjoy the same treatment as Ningbo citizens concerning the consumption on house purchasing, accommodation, medical service, traffic, telecommunication and the other issues.
Article 38.The children of Taiwan compatriots residing in Ningbo who need to enter primary schools or middle schools shall enjoy the priority in the matter in accordance with the relevant regulations.
Article 39.Taiwan compatriots residing in Ningbo who have obtained the valid license for driving small car from Taiwan shall be issued the license of the same type after they have been qualified through examinations of physical, laws and regulations on traffic and common knowledge on safety driving by the administrative department in charge of cars under the municipality public security authorities according to the relevant regulations.
Article 40.Taiwan compatriots may be exempt from health examination, when the valid certifications for health (the original) which they have obtained from the health and quarantine office of Taiwan, other countries and regions or public hospitals are identified by the health and quarantine office at Ningbo frontier port.
Chapter VII
Disputes and Handling of Complaints
Article 41.With respect to the disputes arising during the economic activities in connection with investment, trading, loaning, leasing, real estate, intellectual properties, management of the enterprises, relationship of labor and wages and other issues between one party as investors of Taiwan compatriots and another party (counting enterprises, business entities and individuals), the parties concerned may settle the disputes through consultation or mediation.
Where the parties concerned are unwilling to settle the dispute through consultation or mediation, or the consultation or mediation has failed, the parties concerned may, in accordance with the stipulation of the arbitration articles in the contract, or in accordance with the written arbitration agreement reached by the parties concerned after the dispute has arisen, submit their dispute to the arbitration authorities for settlement.
In the event that the parties concerned do not include an arbitration article in their contract, nor has written arbitration agreement been reached after the dispute has arisen, then the dispute may be brought before the people's court.
Article 42.The competent institution in charge of accepting complaints from investors of Taiwan compatriots shall be established by Ningbo Municipality People's government to accept the said complaints. Investors of Taiwan compatriots shall lodge the complaints in written form which contain the objects of the complaints, the claim, factual basis, reasons and other contents.
The said institution exercises the following functions and powers :
(1) To carry out the investigations into the matters concerned in the complaints;
(2) To organize and coordinate the relevant departments to deal with the actions to infringe upon the legal rights and interests of investors of Taiwan compatriots;
(3) To suggest the relevant competent departments to impose administrative responsibility on those responsible persons who have committed the administrative actions against the legal rights and interests of investors of Taiwan compatriots;
(4) To transfer the said complaints to judicial organs when finding that the actions infringing upon the legal rights and interests of investors of Taiwan compatriots should be under jurisdiction of judicial organs.
The competent institution in charge of accepting complaints from investors of Taiwan compatriots shall inform the complainant of the results within 30 days dating from the receipt of the complaints. The deadline of replying may also be properly prplonged when the matters of complaints are complicated and can't be dealt with in time.
Article 43.Investors of Taiwan compatriots may directly lodge complaints with the relevant administrative departments and judicial departments, as well as with the competent institution in charge of accepting complaints from investors of Taiwan compatriots under Ningbo Municipality.
The relevant administrative departments and judicial departments shall receive the complaints timely, carry out investigations and handle the matters in accordance with the law and justice.
Article 44.Investors of Taiwan compatriots may claim for state compensation in accordance with 'Law of the People's Republic of China on State Compensation', if a state organ of Ningbo Municipality or a member of its personnel, when exercising functions and powers in violation of the law, infringes upon the legal rights and interests of them.
Chapter VIII
Supplementary Provisions
Article 45.Taiwan Affairs Office under the Ningbo Municipality people's government shall be responsible for interpreting the matters emerging during the specific application of these regulations.
Article 46.These regulations shall go into effect as of the date of promulgation.
