Dongshan Economic & Technical Development Zone

GEOGRAPHICAL POSITION

Facing Taiwan and next to Hong Kong and Macao,Dongshan island is located at 117degree 23' east longtitude and 23 degree 35' north latitude in the south of Fujian province of China,between two special economic zones Xiamen and Shantou,Guangdong province.It is an important window for trade with Taiwan and foreign countries of Fujian province.

CLIMATE

Surrounded by the sea on all sides,Dongshan island belongs to the south subtropical maritime monsoon climate zone.It is warm in winter and cool in summer,free from frost all the year round (The average temperature is 13.1 degree centigrade in January and 27.3 degree centigrade in July).The average annual rainfall of Dongshan island is about 1032mm, and the relative humidity is 80%.

MINERAL RESOURCES

Dongshan island is rich in mineral resources.It has more than 200 million tons of silicon sand which rank first nationwide and also has rich diabase,granite and kaolin.It is also a key excellent salt farm of Fujian Province with annual output of 100 thousand tons.

PRODUCT RESOURCES

Dongshan island is rich in product resources. It is the largest asparagus production base for exporting in the Country with the annual yield of 30 thousand tons and the output value exceeding one hundred million RMB. Dongshan's sea area is the centre part of fishing grounds in south Fujian.Aquatic products (such as lobsters, prawns, groupers,abalones,etc.)are extremely rich and renowned at home and abroad.

LABOUR RESOURCES

Dongshan island has a population of about 200 thousand.Among them,there are about 100 thousand labour force, and there are several hundred graduates from universities and secondary schools every year, which may meet the requirement of foreign-funded enterprises to select for use.

PLANNED LOCATION

The Dongshan Economic & Technical Development Zone (DETDZ) is a State development zone,approved by the State Council in January 1993.It lies in the center of Dongshan island, with Zhangtangxinxin in the east,Shipuxinxi in the west, Xitong Road in the south,Xiangdongzhiqu and Xiahuxi in the north.Its total area is 10 square kilometres.

QUALITY AND FUNCTION

The DETDZ takes flexible and favorable policies to creat an excellent investment environment for foreign businessmen, and to introduce foreign capital and advanced technology, equipment and superior managerial experience. Faced with domestic and overseas markets , it exploits food, building material, travelling necessities, electronics, port, processing and manufacturing industry, which are depending mainly on the local resources, and develops practical newly-developed industries of high technology and establishes the relevant markets for science and technology. It is becoming a multi-function,modern and international Economic-Technical Development Zone.

TRANSPORTATION

HIGHWAY

There are three main roads across the DETDZ in the island,the "Bachimen" sea wall and "Dachan" great bridge spanning the sea connect the island with the mainland. The planned "Zhangzhou-Shantou" expressway is extending to the DETDZ.

RAILWAY

The branch of "Zhangzhou-Shantou" railway is in the period of preparation for construction, it will stretch from DETDZ to Dongshan port.

PORT

The Dongshan Port nearby is the State first-class port with perfect facilities for coastal examination,financial insurance and business setup.The port opens to foreign ships every day and has two 5,000-ton-level docks and one 3,000-ton-level dock.

TELECOMMUNICATIONS

Modern telecommunication includes several ten thousand program-controlled telephones and mobile telephones, makes it possible to dial directly the big and middle cities at home and 156 countries (areas) abroad.Meanwhile, it opens the businesses of radio calls, telegram and figurative fax.

WATER AND ELECTRICITY SUPPLY

The DETDZ has sufficient water and electricity supply with a 50.000-ton-per-day waterworks,110,000 volt substation and the ability of electricity supply of return circuit, which can meet the requirement of production.

SERVICE FACILITIES

There are shops,hotels,schools,hospitals,and recreational activities in the zone.

INVESTMENT ORIENTATION

Encourage investors to initiate productive projects and newly-developed projects of high technology, the projects with a total investment amount of more than 5 million US dollars,projects of introducing advanced technology to transform the existing enterprises,projects of solely foreign-owned and foreign-funded amount constituting the majority.

Clients at home and abroad are wholeheartedly welcome to invest in the following industries and businesses:

Further processing the agricultural and side-line products such as fruit,vegetable,fish and shells,etc.

Tourist handicraft product manufacturing

New building material

Electronics

No pollution chemical industry

Light industry

Food industry

Port-processing manufacturing

Medicine industry

Real estate

Biology engineering

Others

LAND POLICIES

Land can be secured with payments in the DETDZ.Land-use right can be assigned, transferred, leased out or obtained for large-tract development.The periods for land use right transfer are 50 years for industrial uses,40 years for commercial, recreational, tourism and hotel uses,and 70 years for residential uses.

According to the preferential policies stipulated in "Regulations of Dongshan Economic-Technical Development Zone" which is issued by the Standing Committee of People's Congress of Fujian Province,and the relevant stipulations,DETDZ provide the investors with the following preferences:

TARIFF

The foreign-funded enterprises import goods for processing shall be exempted from value-added tax and consumption tax in the import link.The exported processing products will be exempted from value-added tax and consumption tax in the period of processing or processing deal.

Foreign-funded enterprise does not export the processing goods directly,but transfer them to another foreign-funded enterprise which will continue to process and assemble for export,shall be exempted from value-added tax and consumption tax in the producing link on the approval of taxation authority.

INCOME TAX

For productive enterprises with foreigh investment,an income tax shall be levied at a reduced rate of 15% on their incomes from production,operation and other sources.Among them,those whose operation period is set for over ten years,shall be exempted from the income tax for the first two years counting from the first profit-making year,and be allowed a 50% reduction of the income tax in the three succeeding years,subject to the approval of their application made to the taxation authority.

According to the stipulations of taxation,following the expiration of the specified period of exemption from and reduction of the income tax,those technically-advanced enterprises shall be allowed a reduced rate of 10% of the income tax for another three years;whereas an income tax shall be levied on export-oriented enterprises at a reduced rate of 10%,provided that the value of the products exported by them in a year exceeds 70% of their total output value for the year.

If an enterprise which starts business in the middle of a year and make profits during the year,but it has in fact less than six months for its productive operation,the enterprise may then choose the following year as the one for the computation of the specified period of exemption from and reduction of its income tax;however,the income tax shall be levied upon the enterprise for its profits made during that year according to the stipulations of taxation.

Chinese-foreign joint ventures engaged in harbours and docks construction and with an operation period of over fifteen years shall be exempted from the income tax for the first five years beginning from the first profit-making year,and be further granted a reduction of 50% of the income tax in the five succeeding years,subject to the approval of their application made to the taxation authority.

Enterprises with foreign investment shall be exempted from local income tax for five years from the profit-making year.

An income tax at a reduced rate of 10% shall be imposed upon the enterprises with foreign investment which,having possessed no business bodies whatsoever within the territory of China,have sources of gains from the Development Zone like dividends, interests, rentals, royalties and others as well,with the exception of those having been granted by law an exemption from the income tax.Among them which gain royalties through providing scientific research, energy-exploiting, traffic-developing, agriculture and animal husbandry-producing,and important technology-developing with special technology,may enjoy an exemption from the income tax,subject to the approval of the department responsible for tax revenue of the State Council.

Foreign investors who re-invest directly onto their enterprises the profits gained therefrom to enlarge their registered capital,or to establish or run other foreign investment enterprises within the Development Zone for a period of not less five years may enjoy a refund of 40% of their income tax already paid on the re-invested portion after being approved;whereas those who establish or expand export-oriented or technically-advanced enterprises may take back the refunding all of their income tax already paid on the re-invested portion.

THE AUTHORITY OF MANAGEMENT AND ADMINISTRATION

The enterprises within the Development Zone may decide on the set up of offices and the size of staff and workers on their own account.

The enterprises within the Development Zone may carry out the recruitment or employment of staff and workers either by themselves or by entrusting it to approved mediated-organization of occupation acting on their behalf according to the relevant stipulations.

LIMITS OF AUTHORITY OF PROJECT APPROVAL

The productive enterprises with a total investment amount of less than 30 million US dollars by the Chinese-foreign equity joint ventures,cooperative enterprises and solely foreign-owned enterprises,shall be examined and approved by the Administration Committee of Development Zone.

The projects over the quota of the limited projects stipulated by the State,shall be checked by the Administration Committee of Development Zone,then be submitted to the State and the relevant department of the Province to examine and approve.

ADMINISTRATION ORGANIZATION

The Administration Committee of DEDZ is on behalf of the People's Government of Dongshan County,exercise unified administration and management of the Development Zone,it has been endowed with economic management right in some respect of the municipal level.The Administration Committee set up General Office,Economic Development Bureau,Bureau of land Program and Construction,and Bureau of Finance & Tax and industry & Commerce.

FUNCTION

The Administration Committee of DETDZ has the management right of State Development Zone.It's major duty is: to stipulate and carry out the plans of the Zone and all management plan;to examine and approve enterprises,mediate the work among different departments in the zone;and to organize construction of the projects for basic facilities in the Zone.

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