Preferential policies

Inner Mongolia Autonomous Region’s Preferential Regulations to Encourage Foreign Investment (Trial)

I. These regulations are released to attract more foreign investment and speed up the development of an export-oriented economy in the region. 

II. These regulations are applicable to foreign companies, enterprises and other economic organizations or individuals, as well as Chinese-foreign equity joint ventures, Chinese-foreign cooperative joint ventures, foreign-owned enterprises and other public welfare establishments that take place in the region. 

III. Foreign-invested enterprises that have an operation period of over 10 years will be exempt from income tax in the first two years after the year they start to earn a profit, and need to pay half of the income tax from the third to fifth year. From the sixth year to the expiration of the operation period, the enterprises pay income tax according to national regulations. The local finance department will return any amount exceeding 24 percent. 

IV. Encouragement to set up foreign-invested enterprises with large investments.

Enterprises that engage in industries encouraged by the State, have a foreign investment over $3 million and an operation period of over 10 years, can enjoy tax treatment upon the approval of the departments of finance and tax.

Foreign-invested enterprises with an investment over $5 million and an operation period of over 10 years, which engage in service industries pay income tax from the year they start to earn profits, and the local finance department will return 50 percent of the tax. 

V. Enterprises in development areas that engage in advanced technologies and export pay income tax according to national regulations, and the local finance department will return amounts that exceed 15 percent. 

VI. If foreign-invested enterprises reinvest the profits to produce exported products or expand export channels, they can be exempt from income tax; the exported products enjoy a policy of zero value-added tax; taxable consumption products are exempt from consumption tax. If the output value of exported products accounts for over 70 percent of total output value, the enterprise will be exempt from income tax. 

VII. Enterprises engaged in agriculture, animal husbandry and forestry only need to pay 70 percent income tax in the following 10 years after the expiration of their exemption period.  

VIII. Foreign-invested enterprises are exempt from local income tax.

IX. Enterprises that do not engage in the transportation business can be exempt from vehicle and vessel license tax during their operation period. 

X. Foreign businessmen who invest in the fields of energy, transportation and other infrastructure projects (coal, electricity, railways and roads) can enjoy the following preferential treatments:

(I) Investors are allowed to construct and operate by BOT (build, operate and transfer) model. 

(II) For road projects, investors are allowed to engage in land development and service operation within a certain scope around the project. 

(III) The enterprise can determine price and charging standards according to operation needs and upon approval from the region’s finance and financing departments. 

XI. Foreign-invested enterprises are encouraged to purchase or participate in the operation of State-owned enterprises upon the approval of local governments. 

XII. Implementation of preferential policies on land use.

(I) Within construction period, foreign-invested enterprises are exempt from land use fees. 

(II) Investors that set up enterprises on their existing land and have an operation period of over 10 years will be exempt from land use fees in the first five years after they start to operate. 

(III) Enterprises that engage in export with an operation period of over 15 years, high-tech enterprises, foreign-invested enterprises that engage in the fields of energy, transportation, infrastructure construction, resource development and raw resources production, will be exempt from land use fees for the first five years after they start to operate if the enterprises have an investment of $500,000 to $1 million; for seven years if they have an investment of $1.01-3 million dollars; for 10 years if they have an investment of $3.01-5 million; for 15 years if have an investment over $5 million. 

XIII. Foreign-invested enterprises can enjoy priority in loan applications. Foreign-invested enterprises can raise a mortgage from a bank on their spot exchange, fixed assets or other qualified properties. 

XIV. Foreign-invested enterprises or welfare establishments can enjoy priority in the supply of water, electricity, gas and communication facilities. 

XV. Export-oriented enterprises, high-tech enterprises and enterprises that engage in the fields of energy, transportation, infrastructure construction and raw material production only need to pay half of the urban infrastructure fees.  

XVI. Foreign-invested enterprises enjoy priority in the transportation of products. 

XVII. Foreign employees who work for foreign-invested enterprises and their families are charged at the same level as Chinese employees in terms of accommodation and transportation. 

XVIII. Foreign-invested enterprises have the right to determine the salary and bonus standards in line with national regulations and have the right to recruit employees. 

XIX. Acceptance authorities should reply to applications from foreign investors within 15 days after they submit application materials. Administrations for industry and commerce should release licenses to foreign-invested enterprises within 10 days if the enterprises have prepared all the required materials. 

XX. If previous provisions are not consistent with the above-mentioned ones, the provisions hereof shall apply.  

XXI. The regulations take effect from the announcement.

This English version is only for reference. To learn more, please refer to the authoritative Chinese version.”