Shanghai Pudong Jinqiao Export Processing Zone
Geographical Location
The Jinqiao Export Processing Zone (JEPZ) is in the middle of the Shanghai Pudong New Area. About 4 kilometers to its west is the Huangpu River, and 12 kilometers to its northeast is the Yangtze River. To the west of the JEPZ are the Lujiazui Financial and Trade Area, to the north the Waigaoqiao Bonded Area, and to the south the Zhangjiang Scientific & Technological Park. Inside the JEPZ, the eastern part is the industrial area, and the western section is the living quarters known as the Jinqiao International Community
Main Advantages
Being One of State-level Core Development Zones
After 15 years development and construction, Jinqiao Export Processing Zone has achieved great-leap-forward development in modern industry, attracting more and more famous multinational corporations. As of July 2005, the development zone had absorbed investment totaling USD14.159 billion, of which USD12.721 billion were made by foreign enterprises; a total of 644 enterprises were established in the development zone, of which 46 are among the world top 500 enterprises and these 46 enterprises invested in more than 70 projects.
New Growth Area in Shanghai
After these 15 years development, Jinqiao Export Processing Zone has become a new economic growth area in Pudong as well as Shanghai, playing a significant role in the economy in the municipality. The development zone recorded gross industrial output value of RMB123.4 billion for 2004, which accounted for 9% of the total of Shanghai and 35% of the total of Pudong New Area. Jinqiao Export Processing Zone witnessed a nearly 3-fold increase in its value of export from RMB10.087 billion in 2000 to RMB37.748 billion in 2004. In the period from 1993 to 2004, the development zone paid a combined total of tax of RMB35.1 billion, which was much higher than the investment made in it with fiscal revenue. Jinqiao Export Processing Zone has made great contribution to Shanghai, becoming an engine of the economy in the city.
Establishment of High-quality International Community
The international community named Green City lying in the east of Jinqiao Export Processing Zone contains an area of 2.3 square kilometers planned for use. With a low plot ratio, this living community is ecological, environmentally-friendly, and suitable for foreigners. The complete living conditions and agreeable environment enable the Green City to become a high living quality. Among those who live in Green City Villa community and Green City Garden community alone are Asia-Pacific region CEOs and senior executive officials of 26 companies raking among the Fortune Top 500 enterprises. As of the end of 2004, there were nearly 1,000 foreigners from 28 countries living in the two communities, which make them a real global village.
Industrial Orientation
After 15 years growth, Shanghai Jinqiao Export Processing Zone has developed into a modern high-tech industrial park with electronic information assembly and component, car assembly and component, modern household appliances, bio-pharmaceutics and food as its core business.
In the field of service, a total of 109 development and research institutes, including 33 state-level, municipal and district-level institutes and 76 ones of enterprises have been set up in Shanghai Jinqiao Export Processing Zone. With the continuous growth of the industries and the climate for investment in the development zone, a lot of multinational corporations have started to reconsider the strategic significance of the development zone and set up their head offices, development and research institutes and other services here.
Planning for Development
Shanghai Jinqiao Export Processing Zone will continue to take the advanced manufacturing industries as its leading project and upgrade the capacity of the manufacturing industries; meanwhile it is to make great efforts to develop productive services related to manufacturing industries and complete and perfect the establishment of international communities, so as to develop itself into a high-tech manufacturing industrial park, a knowledge-based park with high value added and high life quality.
For a certain period in future, Shanghai Jinqiao Export Processing Zone will concentrate on further development of electronic information, car and component making industry, semiconductor, modern household appliances, bio-pharmaceutics. Meanwhile, the development zone is to boost productive services mainly including research and development, purchasing and sales center, regional headquarters of multinational corporations, software, logistics, etc., and to attract productive service business with manufacturing industries and promote the manufacturing industries to being high-added-value industries through the development of productive services. By this means, Shanghai Jinqiao Export Processing Zone is to set up an interpromomtion mode for manufacturing industries and productive service business.
Investment Climate
Since its establishment, Shanghai Jinqiao Export Processing Zone has laid a continuous stress on the improvement of its investment climate. Up to now, its infrastructure has been completed increasingly, making available access, water supply, drainage, electric power, heating, communications, natural gas, satellite communication, central heating supply. The development zone is easily accessible by air, sea and roads, with 33 bus lines operating and many metro lines under construction or planning which pass through the development zone.
In order to meet the requirements of multinational corporations, Shanghai Jinqiao Export Processing Zone has introduced a great deal of banks, customs offices, commodity inspection departments, customs clearance agencies, shipping agents, business agents, labor services, consultation, bonded warehouses and a batch of intermediary organs, and has established some companies engaged in provisions of services of international logistics, industrial property management and disposal of industrial waste material
Preferential Policy
Duty on Importation of Equipment
As of January 1, 1998, tariffs and import link value-added tax shall be exempted within the prescribed scope with respect to import equipment of domestic investment projects and foreign business investment projects the development of which is encouraged by the state.
As provided in China relevant regulations, tariffs and import link value-added tax shall be exempted with respect to import equipment for their own use within the total amount of investment in foreign business investment projects that are consistent with the category of encouragement and the restricted B category under the Catalog of Industries Guidance for Foreign Business Investment, with the exception of commodities listed in the Catalog of Import Commodities for Foreign Business Investment Projects with no Tax Exemption. Customs are to handle the procedures for exemption of tariffs and tax on the basis of the Confirmation of Domestic and Foreign Investment Projects within Category of Encouragement by the State issued by Shanghai authority in charge of management of foreign funds. If 100% of the products of those projects are sold abroad, tariffs and import link value-added tax shall be exempted with respect to imported equipment.
Tariffs and import link value-added tax may be legally exempted with respect to equipment, relevant technology, spare parts and fittings imported within the originally approved scope for own use in technological upgrade of foreign-funded enterprises within the above-mentioned category of encouragement and the restricted B category, foreign-funded research and development institutes, advanced-technology and export-oriented foreign-funded enterprises when China can not produce such equipment or the domestic products fail to satisfy the requirements, provided that the fund for import such equipment is own fund (reserve fund of enterprises, expansion funds, net profits after deduction of depreciation) beyond their total amount of investment.
Tariffs and import link value-added tax may be legally exempted with respect to equipment, relevant technology, spare parts and fittings imported by foreign-funded development and research institutes for their own use within the total amount of investment when China can not produce such equipment or the domestic products fail to satisfy the requirements, provided that the fund for import such equipment is within the total amount of investment.
Reduction or Exemption of Corporate Income Tax and Value-added Tax
The rate of income tax imposed on enterprises in Shanghai Jinqiao Export Processing Zone is 15%, and the rate of value-added tax on general industries is 17%.
(1) For foreign-funded production projects with a registered operation period of more than 10 years, the corporate income tax is to be wholly exempted for the first profit-making two years, and for the following three profit-making three years, they are entitled to a 50% exemption of corporate income tax.
(2) After the expiration of the above-mentioned tax holiday, those enterprises with advanced technology will be entitled to a 10% corporate income tax rate for an additional three years.
(3) After the expiration of the above-mentioned tax holiday, those enterprises whose output value of exported products accounts for more than 70% of the total output value of the same year will be entitled to a 10% corporate income tax rate for the very year.
Reimbursement on Value-added Tax
With respect to four sorts of machinery and electrical equipment including machines, appliances and electronic products, transport tools, and instruments, the rate of tax reimbursement for export is 17%.
Protective Tariff for Raw Materials and Relevant Issues
There are bonded warehouses and warehouses under customs control set in Shanghai Jinqiao Export Processing Zone. When investing in establishment of enterprises, investors may have their imported raw materials bonded in these warehouses.
Where an export contract has been concluded, the raw materials imported for manufacturing of products to be exported under this contract may be bonded on a whole value basis; and the products made from raw materials bonded on a whole value basis shall be wholly exported. Those imported raw materials without corresponding export contract may be taken as stock, and customs may have such imported raw materials bonded in proportion to exported products stated in the feasibility report of investment project, and with respect to those raw materials the products from which are sold at home, the tariff shall be paid. If the products from those raw materials for which the tariff has been paid for domestic sales are exported, the customs will not return such tariff.
Projects Open to Companies
Shanghai Jinqiao Export Processing Zone provides diversified modes of investment for investors, including assignment of land-use right, rent of general workshops.
Shanghai Jinqiao Export Processing Zone may provide various standard workshops for production, including monolayer steel structure workshop, two-layer or multi-layer reinforced concrete workshops. These workshops enjoys complete infrastructure including electric power, water, communications and perfect property management services.