Overseas investors and domestic investors outside of Chongqing are free to invest in Chongqing, in accordance with the law.

Liangjiang New Area especially welcomes foreign investment in prospecting and mining of non-oil/gas mineral resources. Foreign investors are permitted to establish sole proprietorship or to cooperate with Chinese counterparts in risk exploration of non-oil/gas mineral resources. Foreign investors are also permitted to purchase prospecting and mining rights of non-oil/gas mineral resources from large and medium-sized state-owned enterprises and can also transfer these rights.

Business registration

New corporate enterprises, established by joint venture or reinvestment from foreign-invested enterprises and domestic enterprises, can enjoy benefits as foreign-invested enterprises - should the proportion of foreign investment reach or surpass 25 percent.

For foreign investors that appraise their high and new technologies for registered capital, the appraised value can surpass 20 percent of the registered capital.

Tax

Corporate income tax rate of 24 percent applies to productive foreign-invested enterprises. Enterprises that have been operating for 10 years or more are exempt from the corporate income tax for two years following the enterprise’s first profitable year. From the third to the fifth year, the corporate income tax rate is 12 percent.

Corporate income tax rate of 15 percent applies to productive foreign-invested enterprises - engaged in technology- or knowledge-intensive projects, or with an investment of over US$30 million and on a long-term operation basis, or engaged in energy, transportation and harbor construction projects.

Corporate income tax rate of 15 percent applies to foreign-invested enterprises covered in the Encouraged category and Restricted Category B in the Catalogue for Guidance of Foreign Investment Industries.

Corporate income tax rate of 15 percent applies to productive foreign-invested enterprises in the Chongqing Economic and Technological Development Zone, Chongqing High and New Technology Industry Development Zone and Chongqing North New Zone. Foreign-invested high and new technology enterprises that have been operating for 10 years or more are exempt from the corporate income tax for two years following the enterprise's first profitable year.

Foreign-invested high and new technology enterprises in Chongqing High and New Technology Industry Development Zone - that still remain high and new technology enterprises after the tax exemption and tax reduction periods - can enjoy another three years of tax reduction during which income tax shall be halved. If the tax rate is lower than 10 percent after the reduction, the corporate income tax shall be 10 percent.

After expiration of tax reduction or exemption periods as regulated by the state, foreign-invested export enterprises can enjoy an income tax rate of 10 percent during the years when its exports output value [NOTE: PLEASE CHECK "EXPORTS OUTPUT VALUE"] account for over 70 percent of its total output value.

Construction projects of foreign-invested harbors and ports that have been operating for more than 15 years are exempt from corporate income tax from the first to the fifth year following their first profitable year, and the corporate income tax rate is halved from the sixth to the tenth year.

Recently established enterprises in Chongqing - in the fields of transportation, electricity, irrigation, postal services, broadcasting and television industry - are exempt from corporate income tax in the first two years and the tax is halved in the following three years.

Corporate income tax rate of 15 percent applies to foreign-invested financial institutions with an operational capital exceeding US$10 million - either by investment or appropriated by the head office - that have been operating for more than 10 years, and are exempt from corporate income tax for one year following the institution's first profitable year. Corporate income tax is halved from the second to the third year.

Corporate income tax rate of 10 percent applies to profits from dividends, interests, rents, royalties and other income in Chongqing of foreign enterprises without branches or sites in the Chinese territory, in addition to the income tax of enterprises with foreign investment.

Foreign-invested enterprises engaged in the development of agricultural science and technology and construction of eco-agriculture involving slopes and wasteland, are exempt from agricultural tax for five years following the first year that they are profitable.

Foreign-invested enterprises that develop special agricultural products in barren hills, slopes, barren lands and barren waters, are exempt from agricultural specialty tax for ten years following the first year that they are profitable.

Foreign-invested enterprises involved in agricultural development are entitled to a reduced income tax rate of 15 percent to 30 percent in the 10 years after the specified tax exemption period expires.

Foreign-invested enterprises that use undeveloped land with unascertained rights are exempt from agricultural tax for five years - or are exempt from agricultural specialty tax for eight years following the first year that it becomes profitable.

Foreign-invested projects covered in the Encouraged category and Restricted Category B in Catalogue for Guidance of Foreign Investment Industries, are exempt from tariffs and import VAT on self-used equipment within the total investment.

Foreign-invested agricultural enterprises are exempt from tariffs and import VAT on imported equipments for tillage, planting, breeding and processing, and on a reasonable amount of imported household articles and personal belongings by its foreign permanent personnel in China with permanent residence certificates.

Productive foreign-invested enterprises are exempt from local income tax, and non-productive foreign-invested enterprises that have been operating for more than 10 years are exempt from local income tax for two years following their first profitable year - and the income tax is halved from the third to the fifth year.

Land and real estate

Foreign-invested enterprises that cultivate state-owned barren hills, barren lands and wastelands for farming, forestry, animal husbandry, fishery production and quality agricultural products can acquire land-use rights by leasing land through auction.

Foreign investors who invest in agricultural development, power stations, airports, roads, bridges, ports, docks, water plants (excluding pipe networks), irrigation, urban sewage and garbage treatment and other infrastructures - and who have paid a land-use fee - are entitled to the lowest executable land price and may take 50 percent of the land revenue as unpaid debts which shall be cleared within six years following the date of approval.

Foreign-invested enterprises engaged in construction and operation of highways, ports and docks have priority to acquire land-use rights along highways for real estate development, service projects, and highway and waterway transportation.

The transfer fee for land-use rights of productive enterprises - established by a form of joint venture or cooperation from foreign-invested enterprises - can be injected into the company as state-owned shares.

Site use fees for foreign-invested enterprises that acquire land-use rights through administrative allocation shall be halved. Foreign-invested enterprises engaged in agriculture, forestry, animal husbandry and fishery production - as well as science and technology, education, healthcare, power stations, airports, roads, bridges, ports, docks, water plants (excluding pipe networks), irrigation, environmental protection and other infrastructure?- are exempt from the site use fee.

Foreign-invested enterprises authorized to export their products - or technologically advanced enterprises - are exempt from the site use fee for three years from the date the land-use rights were acquired.

Foreign-invested enterprises that invest in ethnic-minority areas, or national or municipal poverty-stricken areas, are exempt from the site use fee.

Foreign-invested enterprises engaged in merger and transformation of bankrupt enterprises or enterprises in difficulty, are exempt from the registration fee for transferring house ownership and land-use rights.

Foreign-invested enterprises engaged in merger and transformation of bankrupt enterprises or enterprises in difficulty - and accepting full settlement of the enterprise's staff - are exempt from the land use fee.

Foreign exchange management and credit

Foreign-invested enterprises can open foreign exchange accounts under a bank dealing with foreign exchange businesses and other financial institutions.

A foreign legal or natural person may apply for a temporary foreign exchange account in order to build a foreign-invested enterprise.

The profits, dividends and bonuses of foreign investors of foreign-invested enterprises - and salaries for staff from Hong Kong, Macao and Taiwan and overseas, as well as other legitimate income - can be freely remitted.

The investment of RMB profits by foreign-invested enterprises shall be treated as foreign investment. The investment of RMB profits in China from the liquidation, equity transfer and other means shall also be treated as foreign investment.

Foreign-invested enterprises can obtain RMB loans from domestic Chinese banks through pledge of foreign exchange. Foreign-invested enterprises can also apply for RMB loans guaranteed by foreign banks from domestic Chinese banks.

Import and export

Foreign-invested enterprises engaged in the production of export products can establish bonded warehouses or bonded factories.

Inspection fees for imported equipment of foreign-invested enterprises are 50 percent of the national standards. The fees shall be cut off by 20 percent if the inspection costs exceed 5,000 yuan.

The appraisal fee of properties within the total amount of investment of foreign-invested enterprises shall be charged at a rate of 2.5 ‰ for properties worth between US$1 million and US$5 million; 2.0 ‰ for properties worth between US$5 million to US$10 million; and 1.0 ‰ for properties worth between US$10 million to US$100 million. The appraisal fee rate may be reduced by 20 percent should the one-time inspection cost more than 5,000 yuan.

Others

Foreign nationals working in foreign-invested enterprises in China can apply for a long-term residence permit.