Preferential policies

Investment Policies (Foreign Investments)

Tax Reduction

·Corporate income tax

Foreign-funded enterprises: a reduced tax rate of 20 percent of corporate income will be applicable for small-size and low-profit enterprises; a reduced tax rate of 15 percent of corporate income will be applicable for hi-tech enterprises that demand key supports from the state.

·Two-year full exemption and three-year half exemption of taxes

For the hi-tech enterprises that are registered within any special economic zone on and after January 1, 2008 and demand key supports from the government (hereinafter referred to as newly-established hi-tech enterprises), the corporate income taxes will be fully exempted for the revenues acquired from special economic zones and Shanghai Pudong New Area for the first two years starting from the year when the first operating income acquired is taxable. For the subsequent three years, the corporate income taxes payable on such revenues will be half exempted based on the statutory rate of 25 percent.

·Three-year full exemption and three-year half exemption of taxes

Investment and operating incomes of public infrastructure projects that receive key governmental support: the corporate income taxes will be fully exempted for the first three years starting from the year when the first operating income acquired is taxable. For the subsequent three years, the corporate income taxes payable on such revenues will be half exempted.

Incomes of eligible environment protection, energy-saving and water-saving projects: the corporate income taxes will be fully exempted for the first three years starting from the year when the first operating income acquired is taxable. For the subsequent three years, the corporate income taxes payable on such revenues will be half exempted.