On supporting the Development of Software Industry For the CCP committees and Administrations of all the counties and districts, the CCP working committee and administrative committee of Liangqi economic district, the Municipal departments, offices and bureaus (companies), all people¡¯s communities as well as Fuzhou military of sub-command:

The following provisions are enacted on purposes of enforcing ¡°the Notification of the State Council on Encouraging the Development of Software Industry and Integrated Circuit Industry¡±£¨No.18, of the notifications issued by the State Council in 2000£©, promoting the development of Fuzhou software industry, improving abilities of software companies to innovate and compete in the world, as well as creating a convenient environment for the development of software companies.

1. Software companies are charged value-added tax at a rate of just 17% for products made by themselves and sold to ordinary taxpayers from June 24,2000 to the end of 2010. The exceeding part will be returned and used in R & D of software products and the extension of the reproduction.

2. According to the regulations of No.273, issued by the Municipal financial and tax authorities in 1999, software companies are free of value-added tax and just need to pay turnover tax of the products, which are produced by companies themselves and have been registered in State¡¯s Copyright Bureau while selling computer software products and transfer their copyright simultaneously.

3. Software companies can enjoy a favorable income tax policy, that is, from the year of gaining profit, companies are free of enterprise income tax in the first 2 years, and pay 50% in the next 3 years. Furthermore, 30% of returned income tax will be used to support the development of companies in Fuzhou Software Park.

4. According to the regulations of No.1, issued by the Municipal financial and tax authorities in 1994, technology transfer income of software companies in the Park, as well as income of related consultation, training and service in the technique are free of income tax temporarily on condition that these income is no more than 300,000 RMB (including 300,000RMB).

5. Salaries and expenses on training of personnel cannot be counted in income tax of software companies.

6. On condition that equipments of private use are imported for internal projects which are on the lists of ¡°National Catalogue of industries, Products and Technology Encouraged by the State¡±or that technologies (including software), spare parts and auxiliary equipments are imported for the implement of contracts and not on the list of ¡°National Catalogue of Imported Goods without Free of Duty for Internal Projects¡±(No.37, of the notifications issued by the State Council in 1997), equipments as well as technologies and the like are free of import custom and import value-added tax.

On condition that goods are listed on ¡°National Catalogue of China¡¯s new high-tech products for export¡±(issued by Ministry of Science and Technology and Ministry of Foreign Trade and Economic Cooperation) and that their export drawback rate is lower than the rate of taxation, companies, with the approval of departments of taxation, and enjoy drawback for duties paid according to the rate taxation and existing drawback administration regulations after goods are exported.

7. On condition that its registering capital is no less than 2 million RBM and that its products will be for export, according to related laws and regulations of foreign trade departments, software companies can import and export products itself, enlarge its business range properly and act as an agent to export other companies¡¯ products, which are made out of technologies transferred and researched by the software companies.

8. According to regulations of No.156, issued by Fujian Provincial Administration, high-level software professionals and overseas students will be introduced and encouraged into the Park for the development of projects. Overseas students who are undertaking software research in the Park can transform their achievement into stocks or shares of their companies, and can be free of personal income tax temporarily. And those who have obtained a long-term right of residing in a foreign country will also be applied to a preferential policy.

9. All kinds of high-level cultivation workstation will be set up in the Park. Technical professionals of software companies in the Park can be recommended in priority to post-graduate cultivation workstation, which established in the Park by some universities. Post-Doctor workstation set by the companies in the Park can apply for financial support on researches.

10. Houses in the Park can be sold or leased to excellent technical personnel of companies in the Park at a preferential price.

11. For its software projects, software companies can apply for the fund of innovation to related provincial and state government organs through the municipal department of science and technology.

12. In accordance with the regulations of No.156, issued by State¡¯s General Department of taxation, software companied in the Park can properly enlarge their investment in R & D of technology. And on condition that expenditures of profitable companies on R & D of products, technologies and techniques increase over 10% (including 10%), half of the increase can offset part of tax of that year after the relevant tax authority examines and approves.

13. Software, which bought by software companies, can be classified under fixed assets or immaterial assets on condition that prices of the software reach the price standards of fixed assets or that the software can be accepted as immaterial assets. And the age depreciation of the software can also be reduced to 2 years at most after the approval of municipal and State¡¯s General Department of Taxation.

14. Software companies in the Park can apply for 3 items of capital such as expenditure, venture capital and assurance capital when apply for projects of science & technology.

15. Software companies with scientific administration and outstanding achievements in the Park will enjoy priority in being recommended to be on the stock market when accord with conditions of registering.

16. Newly entered software companies can take a form of commission when some procedures are required to deal with. After being provided with certain necessary materials, municipal Park Administrative committee and Software Administrative committee will freely do those procedures for these companies (not including few fees charged according to certain regulations).

17. The park will render keep helps to software companies with foreign trade, and the Park that has been surrogates of companies for export can obtain an appreciable percentage of export subsidy, which is shared with the companies.

18. Software companies in the Park can rent houses and standard establishments for production and scientific research at a preferential price. Those companies that reside in Pioneering Building of the Park at its initial stages are free of rent in the first half-year and overseas students are free of one-year rent.

19. When personnel of software companies in the Park is required to go abroad for reasons of mission, their visa procedures will be deal with in priority by department of foreign affairs after being reported by Software Park Administrative Committee provided that their conditions are in accordance with ¡°Regulations on Simplifying the Visa Procedure of Examining and Approving for Personnel of Economic and Trading Purposes¡±.

20. Laws, regulations and strong measures will be strictly enforced to strike the software piracy and to protect interests of software companies from being violated, so as to ensure a fair and just market for companies.

21. Beside these preferential policies above, software companies in Fuzhou Software Park can enjoy some other favorable policies, such as¡°Regulations of Fuzhou Municipality On Supporting the Construction of Fuzhou Software Park¡±(No.177, of the notifications issued by Fuzhou Municipality in 1988), ¡°Certain Suggestions of Fuzhou Municipality on Supporting the Development of New High-Tech Industry¡± (No.28. of notifications issued by Fuzhou Municipality in 1999).

22. The acknowledgement of being a software company should be in accordance with State¡¯s related regulations.

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