I. TAX

    Manufacturing foreign investment enterprises are taxed at the rate of 24%. And A Manufacturing enterprises scheduled to operate for a period of ten years or over shall be given the preferential policy of period, the local income tax shall also be exempted.
    B. Chinese-foreign equity joint ventures, which go in for the construction of harbors, shall be exempted from the income tax starting from the first profit-making year five consecutive years and allowed a 50% reduction from the sixth to the tenth year.
    C. Subsequent to the period of tax exemption of reduction, enterprises shall be allowed a 50% reduction if their annual value of export amounts to more than 70% of their total annual value of production.

    Manufacturing foreign investment enterprises, which undertakes the following projects, shall be taxed at the rate of 15%;
    A, Technology-intensive projects;
    B. Projects with a long payback period, in which foreign investment exceeds US$30 Million;
    C. Projects engaged in the construction for energy, harbors, Communications and transportation.

    To those foreign investment enterprises, which makes further investment with the profit and are scheduled to operate for more than five years, 40% of the income tax levied on the reinvestment shall be returned. If the profit is invested into the founding or expanding of the export- oriented enterprises with advanced technology, 100% of the income tax shall be returned.

II. Land Management

1. foreign investment enterprises can apply to the land management department for the use of land in accordance with pertinent provisions．
2. To encourage new and high-tech projects to settle in the town，preference can be given，upon approval by the township government，to those large-scale projects undertaken by the large domestic enterprises．The term of use of the land purchased for industry may last for 50 years，and that of the land for residence may last for 70 years．The real estate certificate can be issued immediately after the payment is made (including transference rental，value-added fees，tax on farmland use，land levying management fees，land recultivation funds)．
3. The real estate of the foreign investors can be transferred or mortgaged in accordance with the provisions of the law．
4. Foreign investors can rent land for industrial use in accordance with the pertinent provisions．

III. Product sales

    Maximum proportion of the products to be sold domestically can be given in accordance with the detailed provisions of the province．Those products processed with supplied materials，which cannot be sold abroad for some reasons can be sold in China upon approval of the customs and taxation of import tariff.

IV. Vehicles running between Hongkong and Guangdong

1. Factories and enterprises that satisfy one of the following requirements can apply for trucks to be privately used :
   A. Enterprises whose annual labor fees exceed HK$ 1 million, and import and export goods reach 60 tons a month.
   B. Enterprises whose investment or registered capital exceeds US$1 million, and the annual import goods reach 100 tons.
2. Those enterprises whose investment exceeds US$1.5million can apply for a driving license valid both in Hongkong and Guangdong during the valid period of the contract,

Import and Export Control and Tariff Preferences

    In accordance with the pertinent provisions of state and province, foreign investors who come to invest in Shilong can enjoy the following preferential policies:

Imported equipment without evaluate for projects of processing with supplied materials
1. Starting from January l，1998，except for those items listed in The list of items that Cannot be Exempted From Customs Tariff or Foreign Investors，equipment to be imported without evaluate for projects of processing with supplied materials are exempted from tariff and the import VAT
2. Those equipment imported without evaluate during the period of April 1，1996 to December 31，1997 for projects of processing with supplied materials，after registering With customs，can be changed into imported equipment with tariff exemption．Neither tariff nor import Vat will be levied on the equipment．

Imported equipment for foreign investment enterprises
1. Starting form January l，1998，except for those items listed in the list of Items that Cannot be Exempted From tariff for Foreign investors，equipment to be imported Within the total amount of investment for private use by those projects listed as the Encouraged Projects or class B of Restricted Projects in the Guideline directory of Industries for Foreign Investment are exempted from tariff and import VAT.
2. Those foreign investment enterprises established upon approval in accordance with the law during the period of April l，1996 to December 31，1997，if undertaking the project listed as the Encouraged Projects in the Guideline Directory of Industries for Foreign Investment，may apply to Dongguan foreign Economic Relations and Trade Commission for certificate for the equipment that has been approved to be imported but has not yet been actually imported，except for those items listed in The List of Items that Cannot be Exempted From Tariff for Foreign Investment Projects．With the certificate issued by the Foreign Economic Relations and Trade Commission，the above mention equipment can be exempted from the tariff and tax．

The List of Items that cannot be exempted from Tariff for Foreign Investment Projects