Current Page£ºSurvey of Hunan > Changsha


Invest in Changsha

Hunan Provincial Bureau of Statistics         Update Time£º2004-7-30

¢ñ. General Information about Changsha

Changsha, the famous city in the Chu and the Han with a history of over 3000 years, is the provincial capital of Hunan. It is the political, economic and cultural centre in Hunan as well as the backing centre to develop Dongting Lake area of Yangtze River Development Zone in China.

Changsha has jurisdiction over Furong, Tianxin, Yuelu, Kaifu and Yuhua districts, Changsha, Wangcheng and Ningxiang counties and Liuyang city. The total area is 1,800 square kms including 554 square kms of city proper are. The total population stood at 5,720,000 of whom 1,640,000 were not connected with agriculture.

It is located in the beautiful and richly endowed river-valley plain in the central part of Hunan Province, bordering on Luoxiao Mountain on the east, Wuling Mountain on the west, adjaining Dongting Lake on the north and boundered on the south by Hengshan Mountain. It has a moist monsoon climate of the subtropical zone. The average annual air temperature is 17.2¡æand the rainfall 1361 mm. The frostiness period lasts 275 days and the yearly duration of sunshane amounts to 1600 hours.

Changsha, with a long history, rich natural resources, scenic beauty and outstanding personalities, is a famous place investing and initiating enterprises, engaging in business, thuring and spending holidays.

   

Changsha has achieved greater successes in the economic contraction and social development understanding along with economic reform and opening to the outside world since 1979. In 1998 total output value of the city reached RMB £¤54.243 billion, and the proportion of the primary industry, secondary industry and tertiary industry was 12.96 percent, 42.93 percent and 44.11 percent respectively. Changsha ranks the 19th among the 50 strongest cities in the comprehensive economic strength in China, which was published by the state.

Changsha is an important production base of commodity grain and pigs in China. Its grain and pig production ranks at the forefront in our country. The staple agricultural products and by-products such as aquatic products, vegetables, fruits, tobacco, Hunan lotus seeds, edible mushroom, tea etc. have evolved a distinctive style of agriculture in Changsha. In the agriculture Changsha concentrates its efforts on the commodity grain and pigged improvement of quality, and makes the traditional agriculture shift to market-oriented agriculture, outskirts-type agriculture and ecotype agriculture along with market development. In 1998 the gross value of agricultural output topped RMB£¤11.38 billion.

In the industry Changsha takes food, light industry, textile, electronics and machinery industries as mainstay. Its chemical, building materials, medical, automobile and metallurgical industries etc. have better foundation. These products of cigarette colour kinescope, popped food, directly-combustion type air conditioning machine, refrigerators, electric appliances for automobile, machine tools, pumps, blowers, automobiles, diesel fittings; potentiometers etc. occupy important position in our country. A batch of traditional exporting products such as Hunan embroideries, eider-down products, firecrackers, fireworks, ceramics, granite etc. enjoy good reputation in the international markets. Baisha cigarette, Baisha Liquor, Baisha Beer and Baisha Mineral Water series are well-known throughout the country. The gross value of industrial output amounted to RMB£¤67 billion in 1998.

Changsha has well-developed commerce. It has served as the gathered place of merchants and the collecting and distributing centre of commodities since ancient times. There are more than 12,000 commercial service networks with different type. The total retail sales of social commodities reached RMB £¤22.652 billion in 1998. T has formed large commercial pattern taking state-run commerce as main channel and combining collective and individual commerces. Youyi Group and Dongtang Department Emporium have entered among the 100 largest retail emporiums in China. The quantity of commodities and the volume of trade have occupied important position both in Hunan Province and central South China region.

Changsha is the financial centre in Hunan. The financial network point is more than 1000. Up to the end of 1998 the balance held on deposits was RMB £¤59.46 billion, and the balance held on loan RMB£¤48.69 BILLION. Besides, the insurance market, trust and investment, dealing in future, stock dealing, foreign exchange business etc. are becoming brisk day by day. Itis closing to the international finance.

Education, science and technology in Changsha are developing rapidly. At present Changsha has 3361 schools of different kinds with 1,137,000 students including 23 colleges and universities with 72,000 students. The National Defence University of science and Technology, Central South Technology University, Hunan University, Hunan Medical University, Hunan Normal University etc are well known both at home and abroad. Changsha is one of the cities with strong scientific and technical forces in China. It has 129 scientific research institutes covering various fields and 200 thousand scientific and technical personnel. Among them some specialists and scholars enjoy high reputation in the world. 200 scientific research achievements have won the national natural science awards, invention awards and scientific and technical progress awards. Changsha ranks the first place in the quantity of patent application in all provincial capitals. The hybrid Rice, Milk-Way computer system with 100 million times, the genetic engineering of test-tube baby etc. come up to advanced world level.

¢ò. Investment Environment

In recent years the CPC Changsha City Committee and the People¡¯s Government of Changsha City adhere to the strategy strengthercing the city through opening to the outside world, and put the foreign investment promotion work in the first place of economic work. Investment environment for foreign investors is improving day by day.

1. Advantageous geographical position

Changsha is located at convergence place of Yangke Riverside Economic open and Development Zone and South China economic circle. It is an important point of regional economic developmentstrategy along Beijing-Guangzhou Railway line, Bounded on the north by Hubei, on the south by Guangdong and Guangxi. The state encourages foreign investors to invest for inland region in centre and West China in order to reduce the difference in economic development between East China coastal region and centre and West China inland region. Changsha, as a place connecting coastal region with inland, has become a new hot spot of foreign investment with its exceptional geographical position.

2.Transportaiton and Communications

¡÷Aviation: Changsha Huanghua International Airport is a first-grade airport which was built in 1980¡¯s. Where large-and medium-sized airliners can land and take off day and night. 39 airlines are available for direct flight to Beijing, Shanghai, Guangzhou, Shenzhen, Hong Kong, Bangkak and other large and medium cities.

¡øRailway: The Beijing-Guangzhou railway line runs through from north to south, and the Xiang-Qian and Zhe-Gan railway lines connect east and west. The Changsha-Shimen railway is nearing completion. So that Changsha will be a larger hub of railway transportation in China when the railway is completed.

¡øHighway

The highway networks of Changsha stretch in every direction. The national and provincial highways are the main arteries for transportation, with the county and township highways as the subordinates. The traffic mileage amounts to 910 km. The No. 107 state highway from Beijing to Shenzhen and the No. 319 highway from Xiamen to Chengdu run across the city. Changsha-Xiangtan expressway has been into transport service. Changsha-Yiyang expressway is nearing completion, so that Changsha will have good transport facilities to all cities in the whole province.

¡øCommunications: The program-controlled telephone exchange capacity in Changsha has reached 881.000 channels. Telephone subscribers are up to 578,000 and mobile phone subscribers 224,000, which are in program controlled and numeraliced comprehensive communication capacity is in the leading position in the country. Direct dial is available to any countries and regions in the world. Fax and express mail can send to every part of our country and the world.

3. Infrastructure

Power Supply: There are 68 substations with over 35 KV each in Changsha. The main transform capacity reaches 3.02 million KVA and the peak load 830 thousand KW. A thermal power plant with 1.2 million Kw is under construction.

Water Supply: Changsha has 6 waterworks with water supply capacity of 1,04,000 tons a day, averaging 0.69 tons a man. It is higher than the average level of the provincial capital cities in China.

Urban Traffic: Up to now 12 bridges, tuned and 20 main roads have been completed in the city proper, averaging 6.1 square metres road per man. There are 52 bus lines here. Urban traffic will form the pattern with three ring roads. The No.1 ring road has been competed, and the No.2 and No.3 ring roads are under construction.

4.Soft Environment for Investment

In order to optimize the soft environment for investment the CPC Changsha City Committee and the People¡¯s Government of Changsha city have adopted the following measures:

(1)Changsha Foreign Economic Cooperation Bureau ahs been established. It has introducted a new system, namely, one organization in Charge, one-stop examination and approval and one complete package of services. It can examine and approve the foreign-funded project which total investment is not more than USD 30 million, and the projects using Chinese and foreign investment and cooperative project which total amount of investment is less than USD 5 million. So long as forms are filled in, the proposal for setting up the project and feasibility study repot should not be reported to the higher authorities for approval. Therefore, the for a lilies of examination and approval shall simplify and working efficiency shall raise.

(2)Establishment of fee-charging supervision card. In order to build excellent investment environment and safeguard legitimate rights and interests of foreign-funded enterprises, the government functional departments concerned jointly established the fee-charge supervision card. Any organization should not charge other expenses from the foreign-funded enterprises except the expenses receivable specified in the Management Regulations of Hunan Province on Administrative Fee Charging.

3.Establishment of economic court concerning foreign affairs

Economic court concerning foreign affairs should safeguard the lawful rights and interests of foreign investors and try economic cases concerning foreign affairs according to the Chinese laws and regulations in effect and international treaty and practice, thus bringing foreign investment promotion work of our city and safeguarding lawful right and interests of foreign investors to advance towards standardized and lawful right track.

4.Foreign investor complain coordinating centre has established.

Its main duties are as follows: accepting and hearing cases of complains, coordinating and settling contradiction, disputes and problems between foreign-funded enterprises and Chinese and foreign investors in all economic activities and other correct behavior.

5.Project development constancy service company has established. It shall provide constancy services in law, policy and project, help seek cooperative partner and handle various examination and approval formalities for foreign investors.

¢ó. Utilization Foreign funds

Changsha has become a hot spot of foreign investment in the mainland of China along with improvement of investment environment. In 1998 directly utilized foreign funds were USD315 million and had increased by 7 percent as compared with that of 1997. By the end of 1998, Changsha had approved 1700 foreign-funded projects, the contract value of foreign investment amounted to USD 2240 million and the actually utilized amount of foreign fund to talled USD 1600 million, amounting to over one-thirds of total utiliced amount of foreign funds in Hunan Province, second only to Wuhan, Chongqing and Chengdu and ranking fourth in the cities of centre and West China.

Changsha has the following features in utilization of foreign funds: (1)More optimized structure. In 1998 amount of foreign funds for infrastructure projects amounted to 46 percent, for manufacturing industry projects 43 percent and entertainment, restaurant and real estate projects only 5 percent in 99 foreign-funded projects newly approved.

(2)Raised qudity some groups of foreign-funded enterprises with high technology has emerged, e.g. Guangnan motorcycle, LG Shuguang colour kinescope, Wang want foodstuffs, Broad Beltecno sanitary utensils etc. Their technical level ranks leading position in the same trade in Hunan and the whole country. (3)More enlarged projects. A lot of large comprise and financial groups such as America Pepsi Restaurant, Sweden Electrolux, Japan Hitachi, Heiwado, Korea LG, Malaysia lion Group, Thailand Chia Tai Group, Taiwan Kwang Yang, Hong Kong Changjiang Infrestructure Construction Company etc. have settled in Changsha. Large customers bring large projects. At present average investment amount of foreign-funded projects is USD 2.78 million and the project which investment amount is more than USD 10 million has amounted to 26. (4)More diversified fields. In the investment fields agriculture, infrastructure and commerce projects have greater breakthrough in utilization of foreign funds. Foreign-fund banking institution also begins set up office in Changsha. New investment ways such as BOT, TOT, property right transaction, lease operation etc. have appeared except joint venture, cooperation and wholly foreign-owned ways. (5)Tangible benefits. 900 foreign-funds enterprises which have put into production have realized income from sales of RMB £¤8 billion, foreign exchange earned through export of USD 113 million, taxation paid RMB£¤320 million.

¢ô. The Guidance of Investment

(1)Overall objective of economic development of Changsha in the period of 9th Five-Year-Plan

In the period of the 9th Five-Year-Plan Changsha shall take Deng Xiaoping theory on building socialist with the Chinese features as guide, implement the basic line of Party in an all-round way, hold the principles ¡°grasping the opportunity, deepening economic reform, expanding open to the outside world and keeping political stability¡±, maintain a proper balance in the relationship between the economic reform, development and political stability, put the strategy ¡°making our city more powerful through open to the outside world, changing out city more prosperous through development of science, technology and education, enlivening the economy of our city through circulation and administering our city according to the laws¡±, bring two basic changes of economic structure and economic increase way and thus realize the objective of a struggle that per capita total output value shall be three times more than 1980. While completing the second step strategic plan of realization of modern construction in economic and social development. The total domestic output value shall be RMB£¤64 billion in current price in 2000, increasing by an average of 14.9 percent a year. Among them, the increase value of primary industry shall be RMB£¤6.4 billion, secondary industry RMB£¤28.1 billion and tertiary industry RMB£¤29.5 billion, increasing 6.4 percent, 16 percent and 16.4 percent respectively.

(2)Major fields encouraging foreign investment

Agriculture: taking grain, meat, bamboo, wood, fruits, vegetables, green food, flowers and plants as priorities, encouraging development of agricultural products combining processing selling and scientific and technical development and bringing fine processing, deep processing and serial development.

(2)Industry: Our city shall conduct technical transforms for the state-owned Large and medium enterprises and confine technical transformation and utilization of foreign funds to speed up regulation and optimization of industry, product and enterprise¡¯s organization structure, enhance the overall quality and interests of the enterprises. It also shall quicken the steps for the medium and small enterprises in open to the outside world, and implement policies according to the requirements of enterprises, and introduce foreign investment adopting various ways of merger, lease, contract, trust operation sales etc.

(3)Infrastructure: Our city shall encourage all districts and counties vigorously create conditions for introducing foreign funds in the road construction, while continuously paying attention to utilization of foreign funds in water, power and urban ring line projects. It shall encourage investors participate in those projects of urban rubbish non environmental pollution disposal and sewage treatment etc.

(4)High senesce and technology: Our city shall further utilize foreign funds in the fields of new materials, new energy resources, bioengineering, electronic information, electromechanical integration etc.

(5)Capital market: Our city shall vigorously carry the foreign investment work of operation right transfer forward according to the train of thought ¡°exchanging stock for increment and exchanging assets for funds ¡± and win and introduce foreign investment such as funds abroad with different type within the limits permitted by law. At the same time, it shall continuously make a good job of conducing tests at selected points of office which is set up by foreign financial institution in Changsha.

3.Major fields encouraging investment

Changsha New and High Technology Industres Development Zone is a major field encouraging foreign investment in Changsha. This zone founded in Oct, 1998, is a national-level development zone approved by the state council in March, 1991. The planned area of the zone is 18.6 km2. It consists of Yuelushan Science-Based Industrial Park (4km2), Mapoling Science-Based Agricultural Park (3km2), Yuanda seience-Based Park (1km2), and policy district within city proper (3.6km2). The zone has 473 enterprises with new and high technology, 700 projects developing new and high technology and 15,000 scientific and technical personnel in different fields. In 1998 the new and high technology industries realized total income of RMB£¤11 billion, and have become economic pillar and new economic source of increase of Changsha.

The four science-based parks in the development zone are closed-type management industries parks. Their infrastructure is becoming perfected day by day. The functional epartments of economic and construction management in the parks have introduced a new system, namely, one organization in charge. These departments of industry and commerce management, state tax, local tax, finance, land, plan, construction etc. have set up branch institutions in the zone. There are pioneering work service centre, investment consultant centre, foreign exchange centre of science and technology, personnel exchange centre, returned student pioneering park, senior qualified talent office, bonded warehouse, property management company etc. here . There complete service complex can offer good service in an around way for enterprises. Changsha New and High Technology Industries Development Zone enjoys city-rank economic management jurisdiction in the examination and approval of projects and can directly examine and approver the projects whisk total investment is less than USD 30 million. It has become a special economic zone in Changsha and thus it may provide good investment environment for investors.

Changsha New and High Technology Industries Development Zone shall encourage investors to develop new and high technology industries in the science- based parks.

Major development fields of Yuelushan Science-Based Industrial Park include electronic information and electromechanical integration industries, biomedical industry and new material technology industries.

Major development fields of Changsha Science-Based Industrial Park include electromechanical integration and fine chemical industries, electronic information industry and light industry.

Major development fields of Mapoling Science-Based Agricultural Park include gropes seed multiplication industries, high-grade fruits, flowers and plants industries, agricultural biochemical industries and aquiculture and high-efficiency agriculture of processing integration.

Focal points of Yuanda Sience-Based Industrial Park are to develop electromechanical integration and fine chemical products taking centralized air conditioning series products as the core.

¢õ.Preferential Policies

¢ñ. Taxation policies

Foreign-funded enterprises in our city can enjoy the following preferential taxation policies:

(1)Income tax shall be levied on foreign-funded enterprises at the rate of 30 percent. And income tax shall be levied on foreign-funded enterprises of a production nature at the reduced rate of 24 percent.

(2)Local income tax shall be levied on foreign-funded enterprises at the rate of 3 percent. Any foreign-funded enterprises of a production nature scheduled to operate for a period of not less than 10 years shall be exempted from the local tax for 10 years. And nay foreign-funded enterprises of a non production nature scheduled to operate for a period of not less than 10 years shall be exempted from local tax for 5 years. The local tax includes local income tax, urban real estate tax, vehicle and ship use license tax and tax on slaughtering animals.

(3)Income tax shall be levied at the reduced rate of 15 percent on the foreign-funded projects which are technology-or knowledge, intrusive, the projects which have more than USD 30 million of foreign investment and a long payback period and the projects which are engaged in energy, communication and port construction upon approved by the competent department for tax affairs under the state council of an application filed by the enterprise.

(4)Any foreign-funded enterprises of a production nature scheduled to operate for a period of not less than 10 years shall, from the initial year of profit making, be exempted from income tax in the first and second years and allowed a 50 percent reduction in the third to the fifth years. Upon the maturity of tax exemption and reduction period technologically advanced foreign-funded enterprises may enjoy a further 50 percent reduction in enterprises income tax for three more years. Export-oriented foreign-funded enterprises may enjoy a further 50 percent reduction in enterprises income tax if the value of their export products of the year exceeds 70 percent of the total value of products of the year.

(5)Any foreign-funded enterprises which is engaged in agriculture, forestry or animal husbandry and any other foreign-funded enterprises which is established in remote areas may, upon approved by the competent department for tax affairs under the state council of an application filed by the enterprise, be allowed a 15 to 30 percent reduction of the amount of income tax payable for a period of next years following the expiration of the period for tax exemption and reduction.

(6)Since Jan,1,1994, foreign-funded enterprises have implemented new tax law. Industrial and commercial consolidate tax is stopped levying, and changed as VAT, consumption and business taxes. Foreign-funded enterprises established before December 31, 1993, which face on increased tax burden due to imposition of VAT, consumption and business taxes will, upon the approval of their application authorities, receive refunds for increased payments during their term of business operation, but not for more than five years.

(7)Any foreign investor of foreign-funded enterprises which reinvests its share of profit obtained from the enterprises directly into that enterprises by increasing its registered capital, or uses the profit as capital investment to establish another enterprises to operate for a period of not less than five years shall, upon approval by the tax authorities of an application filed by the investor, be refunded 40 percent of the income tax already paid on the reinvested amount. If the reinvestment is made to establish or expand an export-oriented or technologically advanced enterprises which is to operate for a period of not less than five years, the refunds may be 100 percent of the income tax already paid on the reinvested amount.

(8)Income tax shall be levied use fee of chartered right obtained from scientific research and development of energy, communication, agriculture, forestry, animal husbandry and improvement technology shall upon approval, be levied at the reduced rate of 10 percent. Technologically advanced foreign-funded enterprises shall be exempted from income tax.

(9)Any foreign-funded enterprises shall be exempted from export duties and value added tax in export of products (excluding the products limited by the state) produced by the enterprise. The foreign-funded enterprises which handled industrial and commercial registration after Jan. 1, 1994, shall implement the taxation policies of exemption, countervailing levy and tax reimbursement for the products for export.

(10)If fixed assets investment of foreign-funded enterprises in our city is not suitable for the ¡°Provisional Regulations of Regulatory Tax of Fixed Assets Investment orientation of the People¡¯s Republic of China¡±, they shall not be exempted from regulatory tax of fixed assets investment orientation replying.

¢ò. Management of Foreign Exchange

(1)Foreign-funded enterprises shall be allowed to open foreign exchange account in the bank or other financial institution which is entitled to operate foreign exchange. If necessary in business, they shall be allowed to open account outside the boundaries of China upon the approval by Changsha Foreign Exchange Management Institution.

Foreign investment fund of foreign-funded enterprises shall reserve remittance in cash and is entered into the account of foreign exchange capital fund of the enterprise fully.

(2)When foreign-funded enterprises import equipment, materials etc. for production and business, they should purchase and pay foreign exchange by contract, regulations and valid certificate approved by the examination and approval authorities.

Foreign-funded enterprises set up branch and working body outside the boundaries. Required funds or operation funds shall be remitted when approved by Changsha foreign exchange management institution.

(3)Foreign investor may remit profits and other legitimate income obtained from foreign-funded enterprise, and the funds shared during the enterprise stops to outside of the boundaries according to law.

Foreign personnel of foreign-funded enterprises may remit wage and other legitimate income to outside of the boundaries according to law.

¢ó. Goods and materials import policies

Starting from Jan. 1, 1998, for the projects with foreign investment which conform to the catalogue of Industries Encouraging Foreign investment and the catalogue of industries restricting foreign investment (B) in ¡°Industrial Catalogue Guiding Foreign Investment¡± and transfer technology, self-use equipment imported in total investment amount shall be exempt from tariff and import link value-added tax except the commodities listed in the catalogue of import commodities foreign investment projects ¡°which shall not be exempted from taxation¡±, The import equipment of foreign-funded projects approved according to the procedures specified by the state from April 1, 1996 to Dec.31, 1997 shall be exempted from tariff and import link value-added tax from Jan.1, 1998 except those import commodities which are exempted from tax according to this regulations. Projects organization shall handle tax-free procedures by original approved documents in the appropriate customs.

¢ô. Land Use

(1)Foreign-funded enterprises shall obtain land use right and engaged in land development, utilization and operation according to ¡°Provisional Regulations of the People¡¯s Republic of China on selling and Transfer of State Land Use Right In the Cities and Towns¡±, ¡°Provisional Measures of Changsha on Selling and Transfer of state and use right in cities and towns¡±. and ¡°Several Regulations of Changsha on Compensation Use of state land in cities and towns¡±.

(2)Sold land use right obtained according to law can be transferred, rented, mortgaged or used in other activities. Legitimate rights and interests of land user shall be safeguarded according to law.

(3)Maximum number of years of land use right which is obtained by foreign-funds enterprises by means of selling and transfer according to law is 70 years for residential use land, 50 years for industrial use land and education, scientific research, culture, public health, sports and other comprehensive use land and 40 years for commerce, tourism and entertainment use land.

(4)Foreign-funded enterprises may use allocated land. Land use expense is RMB£¤2¡«4 per square meter shall be received by Changsha Land Management Bureau for Changsha Financial authority after the procedures have been duly completed in that bureau. Any enterprises which is engaged in development nature shall of forestry be exempted from land use expenses for 20 to 30 years. Any enterprise which is engaged in agriculture and animal husbandry of development nature shall be exempted from land use expenses for 10 to 15 years. These projects to invest in construction of airport, port, railway, highway, urban main road, bridge, communication etc. shall be exempted from land use expenses for 5 to 10 years. Any enterprise which is engaged in advanced technology development and products for export shall be exempted from land use expenses for 5 to 10 years. It may, upon the expiration of the tax exemption the land use expenses shall be received at the reduced rate of 50 percent within 5 years.

¢õ. Personnel and Labour

1.Cadres a status of ownership by the whole people want to work in the foreign-funded enterprises, all organizations should allow them to flow except state special regulations. Government personnel department and its qualified personnel exchange organization should look on them as other cadres who work in organizations owned by the whole people and handle relevant procedures for them rigorously. If the management and technical personnel in the foreign-funded enterprises ask to flow, they should complete the procedures according to the labour contract signed by the two parties. If the labour contract is not rescinded, they should not sign labour contract with new organization.

(2)Returned personnel studied abroad and this year¡¯s graduates of universities and colleges who want to work in the foreign-funded enterprises shall retain their original status defined in the state regulations and shall be recognized in the flow in the days to come. The qualified personnel exchange organization under local government personnel department shall manage personnel file of the employed professional technical personnel and operation and management personnel and this year¡¯s postgraduates graduates of universities and colleges.

(3)Foreign-funded enterprise my transfer a loan staff and members from those organization with different ownership according to the requirement.

¢ö. Preferential Policies of Changsha New and High Technology Industries Development Zone

The new and high technology enterprises established in Changsha New and High Technology Industries Development Zone the national-level development zone still may enjoy the following preferential policies:

(1)Any Foreign-funded new and high technology enterprise scheduled to operate for a period of not less than 10 years shall, from the initial year of profit making, be exempted from income tax in the first and second years and allowed a 50 percent reduction in the third to eighth years, after this shall be envied at the rate of 15 percent.

(2)Foreign investor shall be exempted from income tax on the use fee of chartered right obtained from transfer of advanced professional technology.

(3)Any organization in the new and high technology zone is engaged in technology transfer and service concerned and annual net income is lower than RMB£¤0.3 million, it shall be exempted from income tax. Income of technical service nature shall be exempted from income tax.

(4)Any foreign-funded new and high technology enterprise shall be exempted from site use fee and price subsidy of Chinese staff and members.

(5)Nonload scientific and technical personnel with senior title of technical or professional post employed by the new and high technology enterprises shall be exempted from city hold fee, if they want move away to Changsha after they sign employment contract for more than 5 years.

(6)Total amount of pricing may reach 35 percent of registration funds of the company when buy a share of limited-liability company with new and high technology achievements.

(7)New and high technology enterprises which annual total income is more than RMB£¤30 million and the new and high technology enterprises of development nature which total income is more than RMB£¤10 million may apply individual import right.

(8)Enterprise in new and high technology development zone shall enjoy preferential treatment specified by China National customs in import and export of goods.

(9)Fixed assets of new and high technology enterprises, which are used in development of new and high technology and production of new and high technology products, shall be quickly depreciated according to the regulations concerned.

(10)Enterprises in the new and high technology zone shall carry out preferential policies in the light in housing project of the People¡¯s Government of Changsha, when residential houses and other necessary facilities are constructed in the zone.

(11)Chinese scientific, technical and business personnel shall enjoy that several times of formalities for going abroad shall be examined and approved once a year if necessary.

¢÷. Working Procedures

(1)Examination and approval procedures for establishing Chinese-foreign equity/contractual joint ventures in Changsha.

1.Applicant shall fill in the Form of Application for Foreign-funded Projects in Changsha in Changsha Foreign Economic cooperation Bureau and submit the following documents:

a. Lawful certificates of business licences of both the Chinese and foreign parties;

b. Lawful identification certificate of legal representatives of both parties;

c. Certificates of business credit standing of both the Chinese and foreign parties issued by accounts bank;

d. Letters of Cooperative intention signed by the parties;

e. For the project which total amount of investment is more than USD 5 million, proposal document for setting up the project and feasibility study report shall be submitted.

Applicant shall hold above-mentioned documents and the ¡°Application Form of Foreign-funded Project in Changsha¡± oppressed to handle the business name registration of foreign-funded enterprises and obtain the notice of the business name approved in Changsha Administrative Bureau of Industry and Commerce.

2.Applicant shall report the contract and articles of association to Changsha Foreign Economic Cooperations Bureau for approval and submit the following documents:

a. Application Form of Foreign-Funded Projects in Changsha appalled by Changsha Foreign Economic Cooperation Bureau;

b. ¡°Notice of the Business Name Ratified¡± issued by Changsha Administrative Bureau for Industry and Commerce;

c. For the projects which total amount of investment is USD 5 million, the official reply to the proposal document for setting up the project and feasibility study report from Changsha Foreign Economic Cooperation Bureau;

d. The contract and articles of association signed by the two parties;

e. Name list of the members of the board of directors and certificates of their appointment issued by both parties, resumes of Chinese directors shall be given by the personnel department of that organizations;

f. Certificate of fund source of the Chinese party;

g. Contract for site lease shall be provided, if the cooperative party requires lease production and operation site of other organization;

h. When Chinese party invests with fixed assets at a fixed price, it shall submit the letter of confirmation given by Changsha State Assets Management Bureau and the letter of assessment given by the public certified accountant office;

i. For the products and which involve the ownership of trade of state, the suggestions given by the department responsible for the work shall be submitted.

3.Applicant shall obtain the certificate of approval of foreign-funded enterprises and submit the following documents in Changsha Foreign Economic Cooperation Bureau.

a. The official reply to the contract and articles of association from Changsha Foreign Economic Cooperation Bureau;

b. Application for registration form of the certificate of approval of foreign-funded enterprise;

(2)Examination and approval procedures for establishing foreign-funded enterprise.

1.Applicant shall submit application to Changsha Foreign Economic Cooperation Bureau, fill in the application from of foreign-funded enterprise and submit the following documents:

a. The lawful certificates of business licence and legal identity of the foreign party;

b. Certificate of business credit standing of both the Chinese and foreign parties issued by the opening bank;

c. If the foreign party shall register and apply in the personal name, only the certificate of business credit standing of personal savings in the bank and the certificate of personal identity shall be submitted.

d. The feasibility study report of project;

e. If asking another person to handle, the trust deed of legal representative given by the investor and notarized by the notary department.

2.The business name registration shall be handled in Changsha Administrative Bureau for Industry and Commerce.

3.Foreign company shall report the company¡¯s articles of association to Changsha Foreign Economic Cooperation Bureau for approval and submit the following documents:

a. The articles of association of wholly foreign-owned enterprises;

b. The name list of members of the board of directors of wholly foreign-owned enterprises. If the board of directors shall not be established, the name list of personal in charge of other management departments (i.g. percipient etc.) shall be submitted;

c. The lease contract, purchasing contract, certificate of ownership etc. of working and production site for the enterprises.

4.Foreign-funded enterprise shall obtain the certificate of approval of foreign-funded enterprise in Changsha Foreign Economic Cooperation Bureau.

(3)Examination and approval procedures of Chinese-foreign joint venture and foreign-funded real estate development enterprises.

1.The enterprise shall obtain the notice of approval of the business name and the certificate of approval of the foreign-funded enterprise, according to the general examination and approval procedures for the foreign-funded enterprises.

2.The enterprise shall report the projects for development, apply the proposal document for setting up the project and submit the feasibility study report to Changsha Planning Commission.

3. The enterprise shall apply to the development division of Changsha Construction Commission for examination of qualifications. After examination the development division shall give the real estate development enterprise a certificate of qualifications, or the certificate shall be issued after the development division reports to Province Construction Commission.

(4)Other registrations

1.Business registration

Within 30 days after obtaining the document of approval foreign-funded enterprise should go to Changsha Administrative Bureau for Industry and Commerce for handling the registration of legal entity and obtaining the business Licence by presenting the documents of approval of certificates, contract and artictes of association, and all appendixes for the document of approval 2 Inch bareheaded photo of the legal representative and the responsible person of foreign party in the enterprise 3 pieces each and the copy to identity certificate of the responsible person of the foreign party.

2.Tax Registration

A foreign-funded enterprise should register with the local tax suboffice concerning foreign affairs by presenting all credentials, documents and business licence for business registration.

3.Exchange registration

A foreign-funded enterprise shall apply to Changsha Administration of Exchange control for foreign exchange registration and present all credentials and documents as mentioned above.

4.Establishment of bank accounts

A foreign-funded enterprises may open bank accounts with any bank authorized and present to the bank the document of approval issued by Changsha Administration of Exchange contrail, business licence, certificate of approval of foreign investment, contract, articles of association, and specimen seal impression and special financial stamp of the enterprise.

5.Fiscal Registration

Within 30 day after business registration, the Chinese-foreign joint venture and cooperative management enterprises should register in the department of finance with is at the local same-level as the authority in charge of finance according to the subordination relation of the investor of the Chinese party and present the certificate of approval of the foreign-funded enterprise, business licence of legal entity, contranc and articles of association. The wholly foreing-owned enterprise should register with the local department of finance. For fiscal registration it shall present the certificate of approval of the foreign-funded enterprise, business licence and articles of association.

6.Cutoms Registration

A foreign-funded enterprise may apply for customs declaration registration in Changsha Customs after business registration and present the certificate of approval of the foreign-funded enterprise and business licence.

7.Registration of commodity Inspection

A foreign-funded enterprise shall, after business registration, go to Hunan Imp. & Exp. Commodity Inspection Bureau for making registration of commodity inspection and present the certificate of approval of the foreign-funded enterprise and business licence (the enterprise which is engaged in production and operation of import and export commodities should submit sanitary licence issued by the public health department).

8.Propety Registration of State-Owned Assets

A foreign-funded enterprise which holds or uses state-owned assets shall, after obtaining the certificate of approval of foreign-funded enterprise, go through the procedures for propety registration of state-owned assets at city, country (city) administration for state-owned assets by submitting the contract, articles of association, report on verification of capital and certificate of capital contribution provided by the Chinese and foreign parties (including a detailed property list and the ¡°notification of confirmation of assets evaluation¡±).

(5)Diagram of Application, Examination and Approval Procedures for Establishing foreign-funded enterprises.

(6)The Formalities of Import and Export of the Foreign-funded Enterprises.

1.Application of import and export plan

A foreign-funded enterprise shall work out an annual import and export plan within the business range and production scope approved and report to Changsha Foreign Economic Cooperation Bureau for approval in September every year. The plan shall include variety and quantity of import raw and subsidiary materials, variety and quantity of export products etc. For the commodities which involve management of import and export licence, Changsha Foreign Economic Cooperation Bureau shall report to Hunan Province Foreign Economic and Trade Commission for examination and approval.

2.Application of licence of import commodities

When foreign-funded enterprise import the commodities which involve management of state licence, it should apply to Hunan Province Foreign Economics and Trade Commission for a import commodity licence, and submit the following documents:¡± Examination and approval form of application of import licence of foreign-funded enterprise¡± in which ther are comments written and signed by Changsha Foreign Economic Cooperation Bureau, detailed list of import equipment after approval or the import plan and document of approval in that year, report on verification of capital and application form of import goods licence. If first obtaining the licence, it should provide contract of cooperative management, articles of association, document of approval for establishment of the enterprise, certificate of approval of the foreign-funded enterprise and business licence.

3.Application of Export Commodity Licence

When the enterprise shall export the commodities which involve management of state licence, it shall apply to Hunan Province Foreign Economics and Trade Commission for export commodity licence by the export plan issued by the department of economic and trade before export, and present the following documents:¡± Examination and Approval form Application of Export Licence of the Foreign-funded Enterprise¡± in which ther are comments written and signed by Changsha Foreign Economic Cooperation Bureau, import and export plan in that time after approval, export or goods supply contrat signed to foreign countries, report of verification of capital and business licence.

4.Customs Declaration

Customs declaration for imports and exports should be handled by the declaring of organization. When goods are imported and exported, the declarant shall obtain the customs declaration from for imports or the customs declaration form for exports in Changsha Customs. He shall apply to Changsha Customs for customs declaration after filling in it and submit the documents of approval for import and export of goods and freight transport concerned and businness papers. The time limit of customs declaration for import goods is the period of validity within 14n days from that day when means of transport enter our country.

5.Application of commodity Inspection

A foreign-funded enterprise shall apply to Hunan Province Imp. & Exp. Commodity Inspection Bureau for inspection of import and export commodities. When applying for inspection of import commodities, it must present contract, foreign invoices, B/L, packing list, not of arrival of import goods, bill of entry, and a detailed list of import equipment, purchase contract of equipment, quality certificate of equipment, operation instruction, technical documents etc. When it shall put in a capital of machines and equipment at a fixed price. When applying for inspection of export commodity, it shall present the foreign trade contract or letter of confirmation, letter of credit and other documents concerned.

6.Application of foreign exchange remittance of personnel from another country

a. Remittance procedures of profits of foreign investor

Foreign investor shall apply to Changsha Administration of Exchange Control for remittance of profits by presenting audit report provided by certified public accountant office, tax certificate of Changsha tax suboffice involving foreign countries, resolution of profit distribution of the board of directors in the enterprise or authorized organs analogous to the board of directors, contract in which there are the terms of income distribution etc. organs in Changsha. The procedures are b. When foreign personnel remit wages and other legitimate income to foreign country, they shall apply to Changsha Administration of Exchange Control for remittance and submit the following documents: report of application for remittance of wages and other legitimate income (The report includes name list of foreign personnel, amount of wages and other legitimates income every person, a definite amount of the expenses locally and remittance applied), tax certificate of Changsha Tax Suboffice involving foreign country and application of bank remittance.

(7)Procedures for Foreign Enterprise to Apply for the Establishment of Resident Offices in Changsha

Any foreign trader, manufacturer, shipping agent agent and economic organization to establish resident offices in Changsha shall apply to Hunan Provincial Foreign Investment Promotion Bureau for approval. The procedures are as follows:

1.A foreign enterprise shall provide the following documents and reference materials: an application form signed by the chairman of the board of directors or the president of the enterprise, the legal document sanctioning the operation of that enterprise issued by the authorities of the country or region in which that enterprise operates (an enterprise operating in Hong Kong shall submit its registration certificate and business licence of the year), the capital credibility document issued by the banking institution (It may be exempted, if the applicant is a non-profit-making organization), the credentials, resume and the vilid I D of the representative, letter of recommendation given by a Chinese organization in relationship with the applicant and business documents relating them.

2.After the above-mentioned certificates and documents submitted by the applicant have been examined, the applicant shall fill in a standard Application Form for Establishment (Extending) of Resident Representative Office, Applicant Form for Change of Personnel and Scope of Representative Office and submit the two forms to Hunan Provincial Foreign Investment Promotion Bureau for examination and approval.

3.After the applications have been approved, the resident representative shall bring the approval certificate to the local industrial and commercial administration bureau to go through the registration procedures within 30 days, then go to the local public security bureau for the residence permit, to the local tax bureau for registration and open an account with the relevant bank.

¢÷. Administration and Service Departments

1.Changsha Foreign Investment Administration Committee

Changsha Foreign Investment Administration Committee has appointed a managing vice-mayor to director, a vice-mayor in charge of foreign economy and trade, urban infrastructure, energy researches, communications, financial and tax funds to vice-director. The major leaders of all functional departments are members of the committee. Its main duties are as follows: performing leading and coordination fore foreign investment work and settling difficulties for the foreign-funded enterprises in their investment Under the administration Committee there is an office. It and Changsha Foreign Economic Cooperation Bureau work together and are in charge of dealing with routine matters.

2.Change Foreign Economic Cooperation Bureau

It is in charge of foreign investment work in the whole city. Its main duties are as follows: examining and approving the proposal document for setting up the project, feasibility study report and contract and articles of association of the foreign-funded project which total amount investment is not more than USD 30 million and the contracts of processing with supplied materials and designs, assembling with supplied components and compensation trade; undertaking the administration work for the foreign-funded enterprise.

Add: 1 Fanzheng Street, Changsha

Tel: 442637,2227086,4429497

Fax: 0731-4448404

Postcode: 410004

3. Changsha Planning Commission

It is a comprehensive economic administration department and is in charge of examination and approval of the proposal document for setting up the project and feasibility study report of the infrastructure project which total amount of investment is not more than USD 30 million.

Add: 1 Fanzheng street, Changsha

Tel: 4423756,4423145

Postcode: 410005

4.Foreign Affairs and Overseas Chinese Affairs Office under the People¡¯s Government of Changsha City

It is in charge of foreign affairs and Overseas Chinese affairs work in the whole city and may act as go-between for investment of foreign investors and countrymen residing abroad.

Add: 1 Fanzheng Street, Changsha

Tel: 2224222

Fax: 0731-4445583

Postcode: 410005

5. Taiwan Affairs Office under the People¡¯s Government of Changsha City

It is a functional department in charge of Taiwan affairs work of the government and may act as go-between for investment of our compatriots in Taiwan.

Add: 5 Wuyi Road(w), Changsha

Tel: 4422603,4441667

Postcode: 410005

6. Changsha Foreign Labour Engineering Office

It is mainly engaged in development business of international economic and technical cooperation, contracting foreign engineering, export of labour service, import of technology, initiating enterprise abroad etc.

Add: 1 Fanzheng Street, Changsha

Tel: 4429288

Fax: 0731-4448404

7.China Commission for the Promotion of International Trade Changsha Submission

It is a foreign economy and trade organization of the whole city composing of the enterprises. Organization and people in the economic circles. It mainly develops the following activities: promoting foreign trade, introducing foreign investment, importing advanced foreign technology and Chinese-foreign economic and technical cooperation with different forms.

Add: 4 Chaoyang Road, Changsha

Tel: 2299205

Fax: 0731-2299283

8.Foreign Economic Court of Changsha Intermediate People¡¯s Court

It shall safeguard the lawful rights and interests of foreign investors and try the economic cases concerning foreign country and dealing with the foreign-funded enterprises according tot he laws and regulations in effect of our country and international treaty and practice.

Add: 50 Shuguang Road (M), Changsha

Tel: 5560383

Fax: 0731-5564513

9. Changsha Foreign-Funded Enterprise Complain and Coordination Centre

It shall accept consultation and appeal, coordinate and settle contradiction, dispute and difficulties for the foreign-funded enterprises and investors in their construction, production, management and other economic activities.

Add: 1 Fanzheng Street, Changsha

Tel: 2227086

Fax: 0731-4448404

Postcode: 410005

10.Changsha Association of Foreign-Funded Enterprise

Changsha Association of Foreign-Funded Enterprises is an associational organization to promote mutual understanding, friendship and cooperation between the foreign-funded enterprises, between Chinese and foreign parties of its membership investors and between its members and the local governments. Its is composed of Chinese and foreign parties of investors in the foreign-funded enterprises, organizations engaged in foreign Economy and trade work and related public figures. It shall recommend investment and cooperation projects and cooperative partners and develop the activities of international friendly contacts.

Add: 1 Fanzheng Street, Changsha

Tel:2227086

Fax: 0731-4448404

Postcode:410005

11.Hunan Provincial State Tax Bureau Foreign Tax Suboffice

It is in charge of collection and management of value-added tax, consumption tax and income tax from enterprise of foreign-funded and foreign enterprises.

Add: 59 Laodong Road(W), Changsha

Tel:5522901,5521221

Fax: 410007

12.Changsha Local Tax Bureau Foreign Tax suboffice

It is in charge of collection and administration of local tax from foreign-funded and foreign enterprises.

Add: 85 Baisha Road, Changsha

Tel:5118118-6903

Fax:5119662

Postcode410002

13. Changsha Import and Export Company

It is a commercial agency undertaking the business of processing with supplied materials and designs, assembling with supplied components and compensation trade. It shall handle import and export business for enterprises, offer service for foreign investment and foreign labour cooperation and sell products made in the foreign-funded enterprises.

Add: 73 Zhongshan Road, Changsha

Tel: 4435749,4446766

Fax: 0731-4446235

   
   
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