[Home] [Databases] [WorldLII] [Search] [Feedback] Laws of the People's Republic of China

You are here:  AsianLII >> Databases >> Laws of the People's Republic of China >> REGULATIONS ON SPECIAL ECONOMIC ZONES IN GUANGDONG PROVINCE

[Database Search] [Name Search] [Noteup] [Help]

REGULATIONS ON SPECIAL ECONOMIC ZONES IN GUANGDONG PROVINCE

    Chapter VI   Supplementary Provisions
Chapter I  General Provisions

    Article 1  In order to develop economic cooperation and technical
exchanges with foreign countries and to promote the socialist modernization
programme, certain areas shall be delineated respectively in the three cities
of Shenzhen, Zhuhai and Shantou in Guangdong Province for the establishment
of special economic zones (hereinafter referred to as "special zones"), The
special zones shall encourage foreign citizens, overseas Chinese, compatriots
from Hongkong and Macao and their companies and enterprises (hereinafter
referred to as" investors") to open factories and set up enterprises and
other establishments with their own investment or in joint ventures with our
side, and shall protect their assets, the profits due them and their other
lawful rights and interests in accordance with the law.

    Article 2  Enterprises and individuals in the special zones must abide by
the laws, decrees and pertinent provisions of the People's Republic of China.
Where there are specific provisions in these Regulations, they shall be
observed accordingly.

    Article 3  A Guangdong Provincial Committee for the Administration of
Special Economic Zones shall be set up to exercise unified administration of
the special zones on behalf of the Guangdong Provincial People's Government.

    Article 4  The special zones shall provide investors with a wide scope of
operation, create favourable operating conditions and guarantee them stable
business sites. Investors may establish, with their own investment or in
joint ventures with our side, all projects that have positive significance
for international economic cooperation and technical exchanges, including
industry, agriculture, animal husbandry, aquaculture, tourism, housing and
construction, and research and manufacture involving high technology, as
well as other
businesses of common interest to investors and to our side.

    Article 5  Land-levelling projects and various public works in the
special zones such as water supply, drainage, power supply, roads, wharves,
communications and warehouses shall be undertaken by the Guangdong Provincial
Committee for the Administration of Special Economic Zones. When necessary,
foreign investment may be used in building these projects.

    Article 6  Each of the special zones shall invite Chinese and foreign
specialists and relevant personages who are enthusiastic about China's
modernization programme to form an advisory committee that will serve as a
consultative body for that special zone.
Chapter II  Registration and Operation

    Article 7  Investors wishing to open factories or set up various economic
undertakings in the special zones with their own investment shall apply to the
Guangdong Provincial Committee for the Administration of Special Economic
Zones, which shall issue them registration certificates and land use
certificates after examination and approval.

    Article 8  Investors may open accounts and conduct their foreign exchange
transactions with the Bank of China established in the special zones or with
other banks established there with the approval of the Chinese side.

    Investors may take out various kinds of insurance policies at the
People's insurance Company of China in the special zones or at other
insurance companies established there with the approval of the Chinese side.

    Article 9  Products of the enterprises in the special zones shall be sold
on the international market. If their products are to be sold in the interior
of China, they must have the approval of the Guangdong Provincial Committee
for the Administration of Special Economic Zones and go through the
procedures for paying customs duties.

    Article 10  Investors may operate their enterprises independently in the
special zones and employ foreign personnel for technical and managerial work.

    Article 11  If an enterprise established by an investor in the special
zones wishes to terminate operations before its scheduled expiration, it
shall report the reasons to the Guangdong Provincial Committee for the
Administration of Special Economic Zones, go through termination procedures
and settle claims and debts. After termination of operations, its assets may
be assigned and its funds may be remitted out of China.
Chapter III  Preferential Treatment

    Article 12  Land in the special zones is owned by the People's Republic of
China. The land to be used by investors shall be provided according to actual
needs, and preferential treatment shall be given with respect to the duration
of its use, the amount of the use fee and the method of payment according to
the different types of business and uses. Provisions for specific measures
shall be made separately.

    Article 13  The machinery and equipment, spare parts, raw and
semi-processed materials, means of transportation and other capital goods
necessary for production that are imported by enterprises in the special zones
shall be exempted from import duties. The necessary consumer goods may either
be subjected to import duties or allowed a reduction or exemption therefrom,
depending on the specific situation of each case. When the above-mentioned
goods are imported or products of the special zones are exported, a customs
declaration shall be filed.

    Article 14  The enterprise income tax rate in the special zones is 15
percent. Special preferential treatment shall be given to enterprises
established within two years of the promulgation of these Regulatins, to
enterprises with an investment US$ 5 million or more, and to enterprises
involving higher technology or having a longer period of capital turnover.

    Article 15  The lawfuI profit that an investor receives after payment of
the enterprise income tax, and the wages and salaries and other legitimate
earnings that foreign, overseas Chinese and Hongkong and Macao workers and
staff members of an enterprise in the special zones receive after payment of
the individual income tax, may be remitted abroad through the Bank of China
or other banks in the special zones, in accordance with the provisions of the
foreign exchange control measures of the special zones.

    Article 16  An investor that reinvests its share of the profit in the
special zones for a period of five years or longer may apply for a reduction
of or an exemption from income tax on the reinvested portion.

    Article 17  Enterprises in the special zones shall be encouraged to use
machinery and equipment, raw and semi-processed materials and other materials
produced in China, and preferential prices shall be offered on the basis of
China's current export prices for the same kinds of commodities, using
foreign exchange to settle accounts. These products and materials may be
shipped directly to the special zones with the sales vouchers of the selling
units.

    Article 18  Entry and exit procedures shall be simplified and
conveniences given to the foreign personnel, overseas Chinese and
compatriots from Hongkong and Macao entering and leaving the special zones.
Chapter IV  Labour Management

    Article 19  A labour service company shall be set up in each of the
special zones. Chinese staff members and workers to be employed by
enterprises in the special zones, whether they are recommended by the local
labour service companies or recruited by the investors themselves with the
consent of the Guangdong Provincial Committee for the Administration of
Special Economic Zones, shall all be tested by the enterprises before
employment and labour contracts shall be signed with the staff members
and workers.

    Article 20  The staff members and workers employed by enterprises in the
special zones shall be managed by the enterprises according to their business
requirements and, when necessary, may be dismissed, after going through the
procedures provided in the labour contracts.

    Staff members and workers of the enterprises in the special zones may
submit their resignations to the enterprises in accordance with the
provisions of the labour contracts.

    Article 21  The wage levels, types of wages, award measures and the
labour insurance and various state subsidies for the Chinese staff members
and workers of the enterprises in the special zones shall be included in the
contracts signed by the enterprises with the staff members and workers as
stipulated by the Guangdong Provincial Committee for the Administration of
Special Economic Zones.

    Article 22  Enterprises in the special zones shall adopt the necessary
measures for labour protection to ensure that staff members and workers work
in safe and hygienic conditions.
Chapter V  Administrative Organization

    Article 23  The Guangdong Provincial Committee for the Administration of
Special Economic Zones shall exercise the following functions and powers:

    (1) to draw up development plans for the special zones and organize their
imple-mentation;

    (2) to examine and approve the investment projects of investors in the
special zones;

    (3) to handle registration of industrial and commercial enterprises and
land allotment in the special zones;

    (4) to coordinate working relations among the banking, insurance,
taxation, Customs, frontier inspection, postal and telecommunications and
other organizations in the special zones;

    (5) to provide the staff members andd workers needed by enterprises in
the special zones and protect the legitimate rights and interests of the
staff members and workers;

    (6) to establish educational, cultural, health and various public welfare
institutions in the special zones; and

    (7) to maintain law and order in the special zones and protect, in
accordance with the law, the persons and property in the special zones
against encroachment.

    Article 24  The Shenzhen Special Zone shall be under the direct
management and administration of the Guangdong Provincial Committee for the
Administration of Special Economic Zones. Necessary offices shall be set up
in the Zhuhai and Shantou Special Zones.

    Article 25  A Guangdong Provincial Special Economic Zones Development
Company shall be set up to suit the expanding economic activities in the
special zones. Its scope of business shall include: undertaking to raise
funds and handle trust investment business; operating, or jointing with
investors in operating, relevant enterprises in the special zones; acting
as agent for investors in the special zones in transactions relating to
sales and purchases in trade with the interior; and providing services for
business talks.
Chapter VI  Supplementary Provisions

    Article 26  These Regulations shall go into effect after they have been
adopted by the People's Congress of Guangdong Province and submitted to and
approved by the Standing Committee of the National People's Congress of the
People's Republic of China.?