Article 1  These PROVISIONS are formulated with a view to expediting the development of high and new technology in the Municipality and encouraging overseas investors to invest in projects of high and new technology research and development or industrialization in accordance with relevant laws, rules and regulations, and policies in the light of actual of actual conditions of the Municipality of Tianjin.

Article 2  High and new technology mentioned in these PROVISIONS refer to high and new technology research and development tasks and industrialization projects in line with the development plans of high and new technology industries in the Municipality of Tianjin and recognized as such by the Municipal recognition agency for high and new technology, including tasks and projects currently in progress or new ones intended.

Article 3  Overseas investors mentioned in these PROVISIONS refer to such economic organizations as financial institutions funds and companies or individuals from overseas or HongKong, Macao and Taiwan as well as local economic organizations or individuals that are eligible for investment as overseas capital by law.

Article 4  Overseas investors investing in high and new technology research and development tasks or industrialization projects shall set up research and development institutions or enterprises as legal persons. Upon approval, overseas investors may set up research and development institutions or enterprises as legal persons in the form of Sino-foreign equity or contractual joint ventures or solely foreign funded institutions or enterprises. For the establishment of research and development institutions, applications shall go through the Municipal authority in charge of science and technology for examination and approval according to relevant regulations and reported to the Municipal Bureau of Finance for the record. For the establishment of enterprises, examination and approval shall follow current regulations governing the establishment of oversea funded enterprises.

Article 5 Overseas funded high and new technology research and development institutions and enterprises shall have the right to run its business entirely on its own without interference from any department or individual whatsoever.

Article 6  Assessment of achievements of overseas funded high and new technology research and development tasks shall be applied for to the Municipal authority in charge of science and technology with assessment work to be entrusted to qualified agencies. The achievements may be transferred to parties in the country or overseas. In case of achievements to be transferred overseas, assessment may also be carried out overseas in accordance with international practices and the relevant rules and regulations of the transferee country.

Article 7  Achievements of overseas funded high and new technology research and development tasks shall enjoy the same intellectual property rights and other legal rights and interests as enjoyed by similar achievements of domestic work in research and development. Parties to the cooperation arrangements shall strictly fulfill security liabilities as prescribed in contracts.

Article 8  Overseas funded high and new technology research and development institutions shall enjoy the following preferences:

(1) Exemption from enterprise income tax and business tax in income from technical service in transfers of technological achievements, technical training, technical consultancy, technical service and technical contracting. Exemption from income tax shall be realized in the form of refundment by finance departments. Long term investment revenue obtained through contribution of shares by technology shall not be counted in the taxable income.

(2) Profits realized from products of expanded intermediary experiments confirmed as new products by the Municipal authority in charge of science and technology (or corresponding administrative authority for products subject to specific control regulations) shall be exempt from enterprise income tax for 3 years counting from the date of sale, in case of a state level new product and patented product of invention, and for 2 years counting from the date of sale, in case of a municipal level new product.

(3) for equipment used in expanded intermediary experiments, in view of the increased wear, the period of depreciation may be shortened by 30-50% on the basis stipulated by the state upon approval of the taxation authority.

(4) Imported equipment, instruments, chemical reagents and technical materials used directly in high and new technology research and development tasks shall be exempt from customs duties and import-link taxes in accordance with relevant stipulations of the State.

(5) Income of overseas funded high and new technology research and development institutions obtained from transfers of visible and invisible assets may, after payment of taxes according to law, be used for investment as capital either in the country or overseas. Such investment in the country shall enjoy preferences applicable to reinvestment of profits of overseas funded enterprises currently in force. Remittances abroad may be exchanged at appointed banks by approval of foreign exchange control authorities and the amount remitted shall be exempt from profit income tax.

(6) Recognized overseas funded high and new technology research and development institutions shall, within 3 years from the date of recognition, be refunded the land assignment fee collected by the local government for the land used by the project; be exempt from transaction fees and property registration fees in the purchase of housing for use in production and operation; be exempt from capacity increasing fees for water supply, drainage and gas supply and subsidies for power supply and distribution in the course of construction of the project; and be eligible for the lowest rates stipulated in the collection of other legal fees.

Article 9 Overseas funded high and new technology industrialization projects may take the form of newly established overseas funded enterprise, or share participations in, acquisition and purchase of existing enterprises through formalities in accordance with laws and regulations and procedures currently in effect.

Article 10  Overseas funded high and new technology enterprises shall enjoy the following preferences:

(1) Income tax to be collected at reduced rate of 15% for high and new technology enterprises registered in the Tianjin New technology Park; local income tax to be collected in reference to policies applicable to the New Technology Industry Park in the case of high and new technology enterprises recognized by the recognition authorities for high and new technology but registered outside the New Technology Part; and in the case of enterprises undertaking major projects of high and new technology industrialization, a 50% shall be drawn by the Municipal Bureau of Finance for 3 years in succession from the local share of the increased part of value-added tax paid by the enterprises to substantiate the municipal science and technology development fund for use chiefly in development of technology, absorption of talents and awarding of entrepreneurs by the enterprises.

(2) In the case of expanded investment by overseas funded high and new technology enterprises with their own profits, including directly increasing their registered capital of investing in other overseas funded enterprises in the Municipality whose remaining duration of operation is not less than 5 years, the income tax paid on the reinvestment part in the current year shall be refunded to the overseas  investor at a rate of 100% , if the enterprise invested in is of the technologically advanced type or product-for-export type, and 40%, if  the enterprise does ged at appointed banks by approval of foreign exchange control authorities and the amount remitted shall be exempt from profit income tax.

(6) Recognized overseas funded high and new technology research and development institutions shall, within 3 years from the date of recognition, be refunded the land assignment fee collected by the local government for the land used by the project; be exempt from transaction fees and property registration fees in the purchase of housing for use in production and operation; be exempt from capacity increasing fees for water supply, drainage and gas supply and subsidies for power supply and distribution in the course of construction of the project; and be eligible for the lowest rates stipulated in the collection of other legal fees.

Article 9  Overseas funded high and new technology industrialization projects may take the from of newly established overseas funded enterprise, or share participations in, acquisition and purchase of existing enterprises through formalities in accordance with laws and regulations and procedures currently in effect.

Article 10  Overseas funded high and new technology enterprises shall enjoy the following preferences:

(1) Income tax to be collected at reduced rate of 15% for high and new technology enterprises registered in the Tianjin New Technology Park; local income tax to be collected in reference to policies applicable to the New Technology Industry Park in the case of high and new technology enterprises recognized by the recognition authorities for high and new technology but registered outside the New Technology Part; and in the case of enterprises undertaking major projects of high and new technology industrialization, a 50% shall be drawn by the Municipal Bureau of Finance for 3 years in succession from the local share of the increased part of value-added tax paid by the enterprises to substantiate the municipal science and technology development fund for use chiefly in development of technology, absorption of talents and awarding of entrepreneurs by the enterprises.

(2)In the case of expanded investment by overseas funded high and new technology enterprises with their own profits, including directly increasing their registered capital, or investing in other overseas funded enterprises in the Municipality whose remaining duration of operation is not less than 5 years, the income tax paid on the reinvestment part in the current year shall be refunded to the overseas investor at a rate of  100%, if the enterprise invested in is of the technologically advanced type or product-for-export type, and 40%, if the enterprise does not belong the above-mentioned two types.

(3) Recognized overseas funded high and new technology enterprises shall, within 3 years from the date of recognition, be refunded the assignment fee collected by the local government for the land used by the project; be exempt from transaction fees and property registration fees in the purchase of housing for use in production and operation; be exempt from capacity increasing fees of water supply, drainage, gas supply and subsidies for power supply and distribution in the course of construction of the project; and be eligible for the lowest rates stipulated in the collection of other legal fees.

(4) No ratio is set between product sales in the local market and for export unless otherwise stipulated by the State.

(5) For capital contribution with achievements in high and new technology as invisible asset, the ratio of invisible asset in the registered capital of the enterprise may be up to 35%. In case other arrangements are reached between the parties of cooperation, such arrangements shall prevail.

(6) The value of the achievement of high and new technology contributed in investment as invisible asset shall be appraised by a qualified appraising agency; it could also be recognized by the investors through consultation whereby a written agreement shall be produced and registered with the administrative authority for industry and commerce.

(7) Enterprises receiving the title of Technologically Advanced Overseas Funded Enterprise of Tianjin shall enjoy preferences accorded technologically advanced enterprises not in duplication with these PROVISIONS. Enterprises qualified as product-for-export enterprise shall enjoy preferences accorded produce-for-export enterprises not in duplication with these PROVISIONS.

Article 11  Overseas funded high and new technology research and development institutions and enterprises stationed in the TEDA International Pioneering Center, Tianjin New Technology Industry Park Pioneering Center and Science and Technology Park in Tianjin Port Free Trade Zone, shall enjoy rent-free for offices and housing rented for experiments and production for the first year and reduced rent at a certain percentage of the standard rent for the second and third years.

Article 12  Overseas funded research and development centers importing for their own use within the total amount of their investment equipment and supporting technology, components and spare parts not produced domestically, or the properties of which do not meet their needs, are exempt from import duties and import-link taxes in accordance with the relevant stipulations of the State. Their technology transfers shall be exempt from business tax as in the case of domestic science and technology institutions.

Article 13  Overseas funded research and development institutions and enterprises engaging in the development of technology whose actual cost of technology development in China in the current year exceeds 10% (including 10%) over the pervious year shall, by approval of the taxation authorities, be allowed to off-set a further portion of the taxable income at a rate of 50% of the actual cost of technology development in the current year.

Article 14 Overseas investors are encouraged to set up such intermediary service agencies as high and new technology consultancy and information services or funds. The legitimate rights and interests of these agencies are duely protected.

Article 15  Should the preferences listed under Articles 8 and 10 of these PROVISIONS be in duplication with current stipulations for the encouragement of overseas investment, the more favorable ones should be chosen but no duplicated preferences shall be accorded.

Article 16  Detailed rules for implementation in relation to these provisions shall be enacted and executed by the relevant functional departments of the Municipality.

Article 17  These provisions shall go into effect as from the date of promulgation.