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Suggestions on Encouraging Foreign Investment

Updated: 2013-09-10

To all people's governments for municipalities and counties (prefectures), the management committee of the Pingtan Comprehensive Pilot Zone, all departments and organizations directly under the Fujian Provincial People's Government, enterprises, and colleges and universities:

To further the scale, quality and level of utilization of foreign capital, and promote the scientific development of Fujian, the following suggestions are hereby advanced:

I. Optimizing Structure of Foreign Capital

(1) Foreign capital investment shall be encouraged in advanced manufacturing industries, high and new-tech industries, modern service industries and strategic emerging industries. For any key project under negotiation that involves a total investment of more than $500 million, a support fund of 1 million yuan ($163,324) at most will be granted to each project. For any project based in Sanming, Nanping, Longyan and Ningde that involves a total investment from $100 million to $500 million, a support fund of 500,000 yuan at most will be granted to each project. For Fortune Global 500 multinational corporations and Taiwan Top 100 enterprises seeking investment in Fujian, during negotiation and progress of such projects, a support fund of 200,000 yuan at most will be granted to foreign trade departments for each project.

Suggestions on Encouraging Foreign Investment

(2) Identified foreign-funded projects in the “Encouraged Category”, within the total investment, shall enjoy provincial-level support in the form of import interest subsidies for imported equipment. Qualified foreign-funded projects shall be included in the Fujian provincial key technological transformation plan. Included enterprises shall enjoy a subsidy of 5 percent of the purchase cost of advanced technological equipment.

(3) For foreign-funded industrial enterprises that pay taxes in Fujian, when their annual revenues exceed 1 billion yuan, 5 billion yuan and 10 billion yuan for the first time, they shall get a reward worth 20 percent, 25 percent and 30 percent, respectively, of the increase in the “three taxes” (value-added tax, business tax and business income tax) at the local level between the previous year and current year. The rewards abovementioned shall be paid by the financial department of the county (municipality, prefecture) where an enterprise is based, in accordance with the domestic principle. If a certain proportion of taxes are paid at the provincial level or prefecture-city level, the same proportion of the reward shall be returned to the county (municipality, prefecture).

(4) National and provincial supportive policies and measures regarding industrial restructuring and revival, industrial transformation and upgrade, technical transformation, energy conservation and emission reduction, science and technology development, and headquarters economy shall be equally applicable to qualified foreign-funded projects.

II. Broadening Channels for Capital Attraction

(5) Fujian-based enterprises shall be encouraged to engage in mergers and acquisitions abroad with competitive industrial capital and financial capital. Every year, a batch of key enterprises with financing volumes exceeding $10 million will be promoted after careful selection. (6) Enterprises listed abroad shall be guided to make round-trip investment by establishing investment-oriented companies and venture capital companies so as to enhance the efficiency of funds used.

(7) Foreign businesspeople shall be encouraged to invest with the renminbi they legally hold abroad.

(8) Foreign-funded enterprises shall be supported to achieve capital and share increases by using capital reserves, undistributed profits, foreign debt, and stock rights of China-based companies held by foreign businesspeople. For any increase in registered capital, administrative charges for industry and commerce administration and registration fees on enterprises shall be exempted. The department attracting foreign investment that boosts capital and share increase for the enterprise shall obtain a reward worth 2 percent of the actual capital increase amount.

III. Strengthening Factor Guarantee

(9) Foreign-funded projects that are qualified for inclusion as provincial key projects shall be included in or treated as a provincial key projects for management, receiving priority in getting a factor guarantee. For foreign-funded projects in the “Encouraged Category”, land supply shall be guaranteed. When the base price of a land grant is determined, a price will be set no lower than 70 percent of the price of the land class at the project's location, as compared with National Standard of Low Prices for Industrial Land Grants. Favorable policies can be offered to important projects that involve the use of forest land and sea area, as well as sea reclamation plans. Qualified foreign-funded enterprises are allowed to utilize existing plant areas and workshops for transformation and construction, and no extra land-transfer fees will be charged on the condition that the land is not used for other purposes.

(10) Development zones above the provincial level shall have priority in receiving foreign-funded projects. The Taiwan Investment Zone shall have priority in receiving Taiwan-funded projects.

(11) When a prefecture-city and the Pingtan Comprehensive Pilot Zone establish specialized business promotion agencies like business promotion bureaus or investment promotion bureaus to attract foreign funds, the province shall offer a one-off working support fund of 500,000 yuan.

(12) For overseas high-level talent in business entrepreneurship and innovation, leading professionals from the industrial talent highland, outstanding business entrepreneurs, overseas talents that meet the conditions specified in the Guiding List of Introduction of Urgently Needed Talent, and overseas technical experts introduced by joint R&D centers and key labs, a talent contact and service system shall be established so that their work and life in Fujian will be greatly facilitated. The issuance of their Chinese visas, work permits and foreign expert certificates shall be given priority in handling. They shall also be assisted when handling visa extensions. Overseas talents that contribute to Fujian's economic and social development may be recommended as candidates for the Fujian Friendship Award and National Friendship Award.

IV. Enhancing Service Level

(13) Expanding the authority of examination and approval by prefecture-city

From July 1, 2012, all prefecture-cities shall be granted the right to examine and approve: foreign-funded projects in the “Encouraged Category” with total investment less than $300 million and foreign-funded projects in the “Allowed Category” with total investment less than $100 million.

(14) Improving control of exchange settlement of foreign exchange capital to enhance service efficiency

(15) Foreign-funded enterprises that are operating legally but unable to contribute capital as scheduled can prolong their investment period to a reasonable extent.

(16) Simplifying procedures for examination and approval, and reducing the scope of examination and approval to a minimum

Departments like development and reform committees, economic and trade committees, foreign trade and economic committees, land and resources departments, planning and construction departments, environment protection departments, forestry departments, marine fishery departments and foreign exchange controls shall offer active instruction and service in advance so as to facilitate rapid settlement of foreign-funded projects.

All places and departments shall take into account current situations, working to innovate and perfect services to establish specific measures for implementation.

June 27, 2012

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