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Non-Governmental Economy

BIZCHINA / Policies

Policies of Xi��an Municipal Government to Encourage the Development of
Non-Governmental Economy
(xainvest.gov.cn)
Updated: 2006-05-17 14:13

According to the ��Several Opinions on Further Accelerating the
Development of Non- Governmental Economy�� (Muni. Issuance [2002] No.18,
issued on Dec. 25, 2002) of Xi��an Municipal Committee of CPC and Xi��an
Municipal People��s Government, non-governmental economy enjoys the
following policies:

��1. Trades, commodities and items not forbidden with public
proclamation by State laws, regulations and policies shall be opened to
non-governmental capitals; The preferential policies in the relative
fields are also applicable to non-governmental investment; Encourage and
lead non-governmental capitals to the construction of operational
infrastructure and public utility projects by the means of individual
investment, cooperation, joint venture, share, franchised operation etc.

��2. During establishment of small company enterprises with a
registered capital of not more than RMB 50,000 Yuan (including 500,000),
if there is difficulty in funds, the capital cash could be divided within
a three-year period. However, the first investment should be no less than
30% of the total. The enterprise is obligated for its liability as per
the value of registered capital before completion of capital in cash
input.

��3. Service period of employees of non-governmental corporations who
are enrolled by governmental organizations, transferred or employed by
State-owned enterprises who have participated in various insurances such
as basic pension, unemployment, medical care, industrial injury, bearing
etc. shall be calculated continuously including the period they work in
the non-governmental corporations after verified by the municipal
departments of personnel or labor and social securities.

��4. Hi-tech enterprises initiated in Xi��an Hi-tech Industries
Development Zone and Xi��an Economic and Technological Development Zone
by those who studied abroad shall be provided RMB 50,000 to 100,000 Yuan
for start-up funds or low-interest loans. Hi-tech achievements with
independent patents which have been verified by the municipal science and
technology administrative departments and will be transferred to
production in non-governmental sci-tech enterprises of Xi��an shall be
arranged as the planned governmental program of various technological and
industrial development in priority.

��5. Non-governmental enterprises are encouraged to set up corporate
groups. For those with a registered capital of over RMB 10 million Yuan
of the core enterprise and with more than two close enterprises, and for
those groups with a total registered capital of over RMB 20 million Yuan
of the core and close enterprises together, registration shall be made
directly in Administration of Industry & Commerce.

��6. Besides the trades limited by the State, if the proportion of
unemployed people that a newly opened non-governmental service enterprise
arranged the very year exceeds 30% of its total staff with a three or
more-year labor contract signed, the business tax, income tax, city
maintenance & construction duty as well as education-added duty within
three years shall be exempted after verified by labor and social security
department and audited by taxation bureau.

��7. Non-governmental domestic-funded enterprises whose major
businesses are included in the ��Catalog of Industries, Products and
Technology Encouraged Emphasizingly by the State (2000 version)�� and
whose income from the major businesses occupies over 70% of its total
income, shall be collected a corporate income tax as per the reduced rate
of 15% from 2001 to 2010 after audited and confirmed by the taxation
bureau. Meantime, for newly opened non-governmental domestic-funded
enterprises engaged in basic industries such as transportation, power,
water resources, post etc. in Xi��an with its income from the above
mentioned businesses occupying over 70% of the total, corporate income
tax shall be exempted for 2 years and collected in a half from the third
to the fifth year, starting from the day of production operation, after
audited and confirmed by the taxation bureau.

��8. As for newly opened non-governmental enterprises or operation
units engaged in public utilities, commerce, material business, foreign
trade, tourism, warehouse, service to the residents, foodstuff and
drinking, educational, cultural and public health enterprises which have
independent accounting, the corporate income tax shall be reduced or
exempted for one year from the day of opening after reporting to taxation
bureau in charge for approval. For newly opened non-governmental
enterprises or operation units engaged in consulting, information,
technical service etc. which have independent accounting, the corporate
income tax shall be exempted for two years from the day of opening. For
newly opened non-governmental enterprises or operation units engaged in
traffic, transportation, post and telecom which have independent
accounting, the corporate income tax shall be exempted for the first year
and collected by 50% during the second year of its operation.

��9. The legal representatives who are shareholders or starters of
enterprises in Xi��an and who have invested over RMB 500,000 Yuan in
projects that have gone into production, opened or operated for two years
or longer, and management personnel of these enterprises with senior &
middle professional titles, as well as their households of enterprises
could be transferred as registered citizens of Xi��an. For those acquire,
merger or lease state-owned enterprises, accept and arrange over 50
unemployed workers could be given a quota to receive several production,
technical and management personnel of elsewhere as per the demand.

��10. Non-governmental enterprises enjoy the same policies as
state-owned enterprises during reporting of technical programs,
application for technical transformance projects, appraisal of hi-tech
enterprises and products, assessment of research results, rewarding of
preferential taxation policies, application of technical outlay,
appraisal of the professional title of senior technical personnel,
protection of intellectual property etc., and will report directly to
relevant municipal or district (county) departments.

��The above policies are applicable to self-employed businessmen,
private enterprises, non-governmental sci-tech enterprises, natural
person, joint stock & cooperative stock enterprises held by
non-governmental enterprises, and state-owned non-governmental
enterprises and public-owned non-governmental enterprises.

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