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The Investment Policy of Chengdu

Updated:2016-01-12  CLOSE

• Great Opportunities from the New Round of Western Development Program

From the perspective of the whole country, it is in the crucial moment for transformation of regional development strategies and adjustment of micro economic policies of China, so Chengdu faces great opportunities from China’s Western Development Program and stable growth measures.

•  Sketch map of the region centered by Chengdu-Chongqing

In 2010, the Government of China issued Several Opinions on the In-depth Implementation of the Western Development Strategy and started to promote a new round of Western Development Program. In 2011, the Plan for Chengdu-Chongqing Economic Zone was issued, and it established Chengdu’s position as the engine for one of the two cores in Chengdu-Chongqing Economic Zone and the opening-up city and proposed the development objective of making Chengdu a metropolis with urban-rural integration, comprehensive modernization and high internationalization. The 12th Five-Year Plan for Western Development expedited the pace of inland China to develop an opening-up economy and to build Chengdu and other inland opening-up cities into strategic powerhouses. 11 key economic zones including Chengdu and Chongqing should be supported to take the lead in development, so as to advance the work of opening up of Western China to all parts of China and the world.

• Supporting Policies Aimed to Comprehensively Promote the Opening-up of Western Regions to Other Parts of China and the World

In order to make more efforts for supporting a new round of implementation of the Western Development Strategy, the State Council launched the strategic planning of new round of Western Development Program, and issued a series of preferential policies on fiscal taxation, finance, industry, land, ecological support, etc. As the engine for Western Development Program, Chengdu enjoys the advantageous policy support relative to the coastal cities in eastern China. The implementation of these preferential policies certainly will accelerate Chengdu’s step of accepting the industrial transfer in China and abroad, and greatly drive the development of industries in Chengdu.

•  List of Preferential Policies for Western Development Program

Item

Policy

Remarks

Taxation

Customs duties

For the projects involving in domestic-funded encouraged industries and foreign-invested encouraged industries, and competitive industries, the self-use equipment imported with a value within the total investment amount can be exempted from the customs tax according to the provisions specified in policies.

The encouraged industrial enterprises refer to the enterprises that are engaged in the industries included in the Catalogue of Encouraged Industries in Western China as its main business, and the income of which accounts for at least 70% of total income.

Enterprise income tax

For the encouraged industrial enterprises in western regions, the tax shall be levied at the reduced tax rate of 15% from January 1, 2011 to December 31, 2020.

For the enterprises registered before December 31, 2010 and engaged in transport, power supply, water conservancy, postal service, and radio & TV that enjoy the preferential policy of “2-year exemption and 3-year reduction by half” for enterprise income tax according to the third clause of Article II in the Notice of the Ministry of Finance, the General Administration of Customs and the State Administration of Taxation on Tax Policy Issues concerning Further Implementing the Western China Development Strategy (CS [2011] No. 202), the preferential policy of “2-year exemption and 3-year reduction by half” for enterprise income tax can be continued until expiration.

Land

For the projects that transfer the unused land such as state-owned barren mountain and wasteland for planting trees and grasses according to the laws, the land-transferring fees can be exempted, and the land tenure shall be 50 years. For the projects meeting the requirements on the investment amount as agreed in transfer agreement and satisfying the conditions of ecological construction, the land usage right can be transferred, leased and mortgaged lawfully, and the term of land usage right can be renewed after expiration.

 

Land

In terms of construction land, the land compensation fees can be exempted for the application of state-owned unused land.

 

Introducing foreign investment

For the foreign-invested commercial projects in Western China, the operating period can be extended to 40 years, and the registered capital can be lowered to RMB 30 million. For the foreign-invested infrastructural and competitive industry projects in Western China, the percentage of loans for fixed assets investment can be improved appropriately by the Chinese banks. For the Sino-foreign joint venture projects, the percentage can be improved to 120% of the contribution share of Chinese side; for the wholly foreign-owned project, the percentage can be improved to 100% of the registered capital of foreign side. The encouraged projects meeting the certain conditions are not applicable to the limits on percentage.

 

For the foreign-invested commercial projects in Western China, the operating period can be extended to 40 years, 10 years longer than that in eastern China; while the registered capital can be lowered to RMB 30 million, RMB 20 million less than that in eastern China.

 

• Great Opportunities from Construction of Tianfu New Area

From a province-wide perspective, Chengdu benefits from the magnificent practice of construction of economic development highland in Sichuan Province, so it faces the great opportunities from optimization of traffic location and construction of Tianfu New Area.

Tianfu New Area, an important carrier for construction of Chengdu-Chongqing Economic Zone, is listed among the five new key urban zones in the Plan for Chengdu-Chongqing Economic Zone and is included into the major national development strategy again after being ratified as the Pilot Area for the Comprehensive Reform for Balanced Urban-Rural Development in 2006. The planning and construction of Tianfu New Area has a profound influence on reinforcing Chengdu’s driving function as one of "two cores" of Chengdu-Chongqing Economic Zone, giving a greater play to competitiveness and driving force of Chengdu as a central megalopolis in Western China and expanding the industrial development space of Chengdu and areas around it.

The start of construction of Tianfu New Area will facilitate Chengdu to undertake transfer of capital, talents and technologies to a larger extent and a higher level, providing unprecedented great opportunities and enormous market demands for various investors at home and abroad, as well as for the participation of social capital in infrastructure construction and business investment in Tianfu New Area.

• Preferential Policies for Investment Promotion in Tianfu New Area

In addition to enjoying the policies of Western Development Strategy, Tianfu New Area also benefits from the Notice on Supporting Development Policies for Tianfu New Area of Chengdu, Sichuan formulated by the Sichuan Provincial People’s Government for promoting the construction and development of Tianfu New Area in an all-round manner.

•  List of Preferential Policies for Tianfu New Area

Item

Policy

Reduce tax rate of enterprise income tax to 15% for encouraged industrial enterprises

For the encouraged industrial enterprises located in Tianfu New Area, the enterprise income tax shall be levied at the reduced tax rate of 15% before December 31, 2020. From 2012, the supports are given to the enterprises according to their contributions to Tianfu New Area.

Execute the factor prices according to the industrial standards for high-end service industries

The factor prices of water, gas, and electricity consumptions in high-end service industries in Tianfu New Area such as modern logistics, enterprise headquarters, finance, R&D, and design are executed according to the industrial standards as specified in the relevant provisions of China.

Execute the independent management to construction land index

Execute the independent management to the annual plan of land use of Tianfu New Area, and give priority to the construction land according to the requirements of planning and construction. Implement the requisition-compensation balance in the designated area for the cultivated land requisitioned for construction in Tianfu New Area. Make Tianfu New Area benefit from rural-urban construction land increase or decrease linking pilot program and rural land reclamation project.

Determine the applicable tax amount for land taxation independently

The applicable tax amount for requisition of cultivated land shall be determined by Chengdu, Meishan and Ziyang independently and then registered at Finance Department and Sichuan Provincial Local Tax Bureau. The applicable tax amount for urban land utilization shall be determined by the above three cities independently and then executed after being approved by Sichuan Provincial People’s Government.

Set up a special fund for the development of Tianfu New Area

Appropriate RMB 2 billion from provincial fiscal expenditure to set up a special fund for the development of Tianfu New Area, for supporting the construction of major infrastructures of Tianfu New Area, major public welfare projects, and main projects of ecological vegetation system.

Apply all newly-added local financial revenue to the development of Tianfu New Area

Reserve all newly-added local financial revenue, general budget revenue, and governmental fund in the Tianfu New Area, excluding the shared tax and provincial fixed income, to the construction and development of Tianfu New Area in the next 5 years from 2012.

Make Tianfu New Area benefit from local government bond and industrial investment fund

Give majority of local government bond to Chengdu, Meishan, and Ziyang for the construction of infrastructures in Tianfu New Area and public welfare projects. Actively induct Sichuan Industry Revitalization and Development Investment Fund to invest the major industrial projects in Tianfu New Area.

Support the development of financial industry in Tianfu New Area

Authorize the limits of authority at provincial level to the people’s governments of Chengdu, Meishan, and Ziyang to examine and approve the financial organizations in Tianfu New Area such as small loan companies. Encourage the financial organizations that have made contributions to the construction of Tianfu New Area when appropriating the special fund for financial development from provincial fiscal expenditure. Give corresponding subsidies to the people’s government of three cities according to their performance of promoting the development of financial industry.

Implement efficienct and convenient custom clearance

Implement the “low-risk rapid release” and “low-risk documents review” for the enterprises settled in Tianfu New Area; support the construction of Chengdu Hi-tech Comprehensive Bonded Zone and Longquan Highway Port by adopting the mode of “one application, one examination, one release” at the entry-exit of port and customs; simplify the transfer procedures at the customs of Chengdu Shuangliu International Airport and other customs service organizations in Sichuan; set up a customs agency in Tianfu New Area when conditions available.

Implement the special policies for talent introduction

Offer the related preferential policies on housing, household registration, healthcare, and children’s education of Sichuan Province to the high-level and high-skilled talents in short supply in Tianfu New Area Employ or recruit the high-level talents in short supply in government offices settled in Tianfu New Area according to the Method of Examination and Recruitment for Special Positions or the Trail Measures for Management of Appointed Civil Servants.