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Laws and Regulations Posted: 2003-10-09 16:32:01

Interim Regulations on Encouraging Foreign Investment in the Development and Management of Whole Tracts of Land

     (Effective Date:1991.05.17--Ineffective Date:)

Article 1. In order to further encourage foreign investment in the development and management of whole tracts of land and to bring in technologically advanced and export-oriented enterprises, the Regulations hereof are formulated in line with the "Interim procedures for the Administration of Foreign Investment in the Development and Management of Whole Tracts of Land" issued by the State Council, the "Interim Regulations Governing Leasing and Transfer of the Right to use State-Owned Land in Urban Areas," other relevant regulations and the concrete conditions in this province.

Article 2. Foreign investors developing and managing whole tracts of land, as stated in the Regulations, means the comprehensive development of state-owned land as planned. This is carried out after acquisition of the right to use that land, including leveling the ground, building the drainage and water, power and heat supply systems, and road transport. Communications and other public facilities to lay down appropriate conditions for industrial and other construction purpose. Then land developers can proceed with the transfer of land-use right and the operation of public utilities, or building general-purpose factory buildings, supporting facilities in the service of production and people's livelihood, and other buildings erected on the ground; and transferring or leasing these buildings to others.

The projects of foreign investors developing and managing whole tracts of land must be conducted in special economic zones, coastal open cities and their economic and technological development zones, and coastal economic open areas. For such projects within the stipulated limits that the provincial people's government is authorized to examine and approve, their written project proposals and feasibility study reports shall be submitted to the government for examination and approval (but, written proposals and feasibility study reports of projects belonging to the city of xiamen shall be submitted to the Xiamen municipal government for examination and approval.)

Article 3. the development and management of whole tracts of land by foreign investors must be conducted in accordance with regulations enacted by the state regarding development and management of whole tracts of land; the overall design of the area development project must be in conformity with the regional planning and the overall urban planning and design of the places where the projects are located; and the overall design of the area development project must meet the requirements for transportation, urban construction and environmental protection. The use of the developed land in the development areas shall focus on production; the projects introduced into such areas shall be in line with the state industrial policies and shall go through the stipulated procedures on submitting written proposals to the related authorities for examination and approval.

Article 4. After legitimately obtaining the land-use right, the development enterprises shall have the right to engage in development and construction in the development areas according to the approved overall land development programme; to lease or transfer the land-use right of the areas that they have already invested in and developed to others in accordance with terms prescribed in the contracts; to bring other enterprises into the development areas according to the state industrial policies; and to manage water and power supply facilities developed by the development enterprises themselves in the development areas. The term of leasing out the land-use right usually lasts for 50 years, but upon its expiry, the term can be extended by going through the land-use right leasing extension procedures according to law if it is so wished by the foreign investors.

If the land-use right transferee fails to use the land two years after the transfer is completed, the government has the right to withdraw the land-use right according to law. During the development period, if the foreign investors fail to develop and use the whole areas of land according to the contracts, the government has the right to withdraw the land-use right of the part of the development areas that has not yet been utilized.

Article 5. In the development areas, the land used for production shall not account for less than 80% of the total development area and the land used for supporting facilities for people's livelihood and services shall be controlled within 20% of the total development area. Land used for building hospitals, schools, day-care centres and other public facilities with foreign investment or land used for building offices for administrative branches of the government may not be included in the aforesaid percentages.

Article 6. The development enterprises and foreign-funded enterprises in the development areas shall be exempted from the levy of land-use fees during the construction period as prescribed in the contracts; technologically advanced and export-oriented enterprises scheduled to operate for more than 10 years shall, after their status is confirmed by the relevant authorities, be exempted from the land-use fees for five years; and projects involving development of science and technology, education, culture, medical work and public health, public welfare causes and capital construction which are encouraged by the state may apply for exemption or reduction of land-use fees.

Enterprises engaged in development of whole tracts of land on waste hills, wasteland and waste beaches shall be exempted from land-use fees for 20 years (including the construction period).

Article 7. the same standards for levying charges on provision of water, power, gas, transport and communication services for the state enterprises shall be applied to productive enterprises in the development areas. However, the latter shall pay the fees for capacity expansion and introduction of supporting facilities in accordance with the state regulations. The development enterprises investing in the construction of supporting facilities of water and power supply outside the development areas shall be exempted from the fees of capacity expansion and introduction of supporting facilities pertaining to electric voltage and water resources at the level of aforesaid construction. The standards for levying charges on using waterpower supply and other public productive facilities constructed by the development enterprises in the development areas may be set by the development enterprises in the development enterprises themselves and they may also enjoy the autonomy in managing such facilities. If there is a surplus in the capacity of the facilities, it is necessary for the development enterprises to supply the surplus to users outside the development areas or to connect these utilities with networks there. the development enterprises shall sign contracts with the local public utilities enterprises pursuant to the relevant regulations enacted by the state and engage in operation according to the terms prescribed in the contracts.

Article 8. In order to simplify the procedures for examining and approving the establishment of foreign-funded enterprises in the development areas, an appraisal of the overall environmental impact in such areas shall be conducted to control the total number and to regularly monitor the operation of enterprises in the development areas and the appraisal shall be examined and approved by the environmental protection departments. The standards for fire-fighting, labour safety and protection, earthquake prevention and greening projects shall be controlled at a regional level and shall be included into the same overall development programme submitted to the relevant authorities for examination and approval. The development enterprises must see to it that the foreign-funded enterprises in the development areas meet the foreign-funded enterprises in the development areas meet the aforesaid requirements; the relevant government departments shall supervise the implementation of this provision according to law.

Article 9. The development areas shall enjoy the policies offered to key industrial satellite towns (except for development areas located in special economic zones and economic and technological development zones). Upon the expiry of their period for tax exemption or reduction, export-oriented enterprises whose status has been confirmed by related authorities may enjoy a 50% reduction in the enterprise income tax in the year when more than 70% of their products are exported. Upon the expiry of their period for tax exemption or reduction, enterprises using advanced technology may enjoy a 50% reduction in the enterprise income tax for an extended period of three years.

If the development areas are isolated experimental zones for importing improved agricultural varieties and fine breeds and their establishment has been approved by the provincial government, income form experimental projects of importing improved varieties and fine breeds in such development areas shall be exempted from industrial and commercial consolidated tax for five years and such experimental projects shall be exempted from enterprise income tax for five years starting from the first profit-making year.

Article 10. Equipment for production and management, building materials, and vehicles for productive use imported by the development enterprises that are also productive enterprises within their total investment; means of transport and office equipment imported by the enterprises according to related regulations and for the use of the enterprises themselves; and reasonable amounts of goods and means of transport imported by foreign investors and employees of the development enterprises for the use of themselves and their households shall be exempted from custom duties and industrial and commercial consolidated tax. The above-mentioned equipment and goods imported by foreign-funded enterprises in the development areas shall be handled in accordance with the relevant regulations issued by the customs.

Article 11. To meet the needs of the foreign-funded enterprises in the development areas for production, storage and transport, upon approval of the customs, the development enterprises may set up bonded storehouses and the export-oriented enterprises in such areas may set up bonded factories. The products transferred among chain enterprises in the development areas for processing and products for indirect export may also be bonded.

Article 12. In the development areas, foreign investors shall be permitted to set up the tertiary industry to serve the production and people's livelihood in such areas in order to further boost the economic development and improve the investment environment there.

Article 13. The employees of foreign-funded enterprises in the development areas can be recruited from among the job-waiting people in this province. The local labour departments shall take care of the employee-recruiting procedures and report the employment for record to the labour departments in localities where the newly-recruited hold the residential papers.

The enterprises have the right to set their own salary standards and to recruit or dismiss their employees in accordance with laws.

Article 14. The administration of the development areas shall be executed by the agencies jointly set up by the competent authorities and local governments.

Article 15. The present Regulations are applicable to Sino-foreign joint ventures, Sino-foreign cooperative production enterprises and solely foreign-funded enterprises that are engaged in projects of development and management of whole tracts of land. Corporations, enterprises and other economic institutions as well as individuals from Hongkong, Macau and Taiwan that invest and engage in the development of whole tracts of land may do so with reference to these Regulations.

Article 16. These Regulations shall taken effect on the day they are promulgated and the authority for interpretation of these Regulations rests with the Office of Special Economic Zones under the People's Government of Fujian Province.