Policy Advantage of Shantou Free Trade Zone

I. Investment Policy
1. Foreign and domestic investors can make investment to set up trading, warehousing, transporting, exhibition enterprise and office in the Shantou Free Trade Zone. For manufacturing projects, except some sensitive products (medicine, tobacco) and some commodities needing approval by relevant National Departments according to the regulations of General Administration of Customs, all other projects can be approved by F.T.Z administrative committee.
2. There are no limits on the business scope for enterprises except some national prohibited products.
3. For the goods pass in and out between FTZ and abroad, the consignee, consigner or the agent of the goods should register and record the goods at the customs. Except those managed by passive export quotas, the goods are handled without the requirement of the import & export quotas or licenses.

II. Taxation Policy
1. Being transported into the zone from abroad, the machineries, appliances and other basic construction materials needed by the basic installations construction projects are exempted from import custom duty and tax. The productive and management equipments, reasonable amount of office appliances and their accessories, productive fuels, construction materials and appliances for factory buildings and warehouses imported by enterprises in the zone for their own use are exempted from custom duty and tax.
2. The raw materials, parts, components and packing materials imported by the enterprises for producing export products can be kept as bonded goods.
3.When exported to the abroad, the finished processing export products in the zone are exempted from the export custom duty. Being sold to the domestic markets, the products are to be imposed on the import duty according to the imported raw materials and parts.
4. FTZ enterprise should pay the income tax at the rate of 15%. Transportation, post and telecommunication enterprises are exempted from income tax for the first year and half exempted from income tax for the second year.
5.The foreign funded productive enterprises operating for 10 years or more or the newly operated software producing enterprises are exempted from income tax for the first and second year and half exempted from income tax for the third, fourth and fifth year.
6. High-tech enterprise invested by foreign investors, after expiring the period of tax preferential policy on income tax, if it still is high-tech enterprise, it can enjoy half exemption of income tax on its legal taxation rate for another 3 years according to Tax Law. After implementing half exemption, if the income tax that is still lower than 10% will be taxed by 10%.
7. After expiry of period of exemption and reduction of income tax, Export enterprises invested by foreign funded enterprise can enjoy half exemption on income tax according to the Tax Law on the condition that its export value reach over 70% of its whole output. After implementing half exemption, if the income tax that is still lower than 10% will be taxed by 10%.
8. Sino-foreign joint venture engaging in port and wharf construction with operation period over 15 years, after approval by provincial tax department, can enjoy exemption of income tax from the first year to the fifth year since the profit year, and enjoy half exemption of income tax from the sixth to tenth year.

III. Policies of Processing and Storing Trade
1. No margin account schemes are required for the processing trade, and the processing enterprises are not administrated in category of A, B, C and D.
2. Implement electronic computer network administration on the parts and components imported by export processing enterprise from foreign courtiers.
3. After approval by Customs, processing enterprises in the zone that are in conformity with relevant conditions can authorize the non-F.T.Z enterprises to conduct processing business or receive the processing business from them.
4. Except the import goods prohibited by the state, storage enterprises in FTZ are permitted to store goods with no time limit according to the changes of the international and domestic market.
5. Transit goods can be conducted some simple processing, such as grading, picking, labeling and re-packing in the warehouse and other places in the zone.
6.Under the supervision of Customs, enterprises can hole exhibition activities for foreign commodities and non-FTZ commodities in the zone.
7. Goods from FTZ to Non-FTZ can be handled formalities as import goods; goods from Non-FTZ to FTZ can be handled formalities as export goods. For tax rebate, relevant departments handle it according to national relevant regulations.

IV. Policies on Foreign Exchange
1. Enterprises in the zone can set up foreign-exchange account and RMB account according to the regulations.
2. The foreign exchange earning of the enterprise is settled according to the enterprise’s own will which means the earning in foreign exchange can be maintained at its own account for turnover or can be sold to the appointed bank.
3. When transporting the goods in and out of the zone from abroad, the enterprises are not practiced by the foreign exchange verification and cancellation system for each export and import payment.
4. If the processing and warehousing enterprises in the zone don’t have sufficient foreign exchange to make external payment, they can apply for purchase of foreign exchange after approval by Foreign Exchange Bureau.