East China's Anhui Province, devoting to becoming a new highland in China open to overseas, has accomplished steady development in use of foreign investment and is attracting more and more foreign investors to the province.
Manufacturing industry and Wanjiang City Belt lead robust growth in foreign investment
Foreign investment in Anhui Province saw fast growth in 2015, which was mainly contributed by the growth of foreign investment in manufacturing industry and Wanjiang City Belt, a demonstrative region that undertakes the task of industrial transfer.
According to statistics from the Bureau of Commerce of Anhui Province, the actual foreign investment in Anhui in 2015 hiked 10.4 percent on year to 13.62 billion US dollars, presenting 10.8 percent in national total compared to the 10.3 percent in 2014. Foreign investment in manufacturing industry witnessed robust increase in 2015.
In particular, foreign investment in strategic emerging industry surged 27.5 percent on year to 2.73 billion US dollars, accounting for 20.1 percent of provincial total, which was 2.7 percentage points higher than previous year.
Meanwhile, foreign investment in Wanjiang City Belt increased 12.3 percent on year to 9.53 billion US dollars, weighing 70 percent of provincial total. By the end of 2015, some 72 overseas companies of the world top 500 has set up 120 units in Anhui covering nine sectors including manufacturing industry and service industry, and some of them even expanded their business in Anhui. Some foreign giants, such as Continental AG and Whirlpool, has set up R&D and training center in Anhui.
Preferential Policy Regimes for foreign investment in Anhui
Major preferential policies for foreign investment in Anhui are as follows:
(1) Encouraged projects in the Catalogue for the Guidance of Foreign Investment Industries or those listed in the Catalogue of Foreign-invested Competitive Industries in Central and Western Region of China will enjoy the exemption of customs duty and import VAT for equipment and technologies imported with funds constituting part of the total investment;
(2) For technological upgrade of established foreign enterprises encouraged by the government, foreign-invested research & development centers, foreign enterprises with advanced technology or export-oriented foreign enterprises, and the necessary equipment and its supporting technologies, components and spare parts, which are not available in China and are introduced by self-owned fund beyond total investment, can enjoy the exemption of customs duty and import VAT, provided that the upgrade is still in the scope of production and business approved already;
(3) For foreign enterprises investing in the industries of agriculture, forestry, animal husbandry, fishery, public infrastructure, environmental protection, energy and water conservation and technology transfer, etc., which are especially supported by the national government, they can enjoy the exemption or reduction of corporate income tax;
(4) For high-tech enterprises which are especially supported by the national government, their corporate income tax will be levied at the rate of 15 percent. For eligible small-sized and low-profit enterprises, their corporate income tax will be levied at the rate of 20 percent;
(5) Special land use quota, separately listed for important foreign-invested projects in Anhui, will be allocated according to the overall plan made by the provincial department of land and resources. The encouraged foreign-invested projects with intensive land use will have the priority to be supplied with land. The bottom price of the land for those projects can be no less than 70 percent of the price of surrounding industrial land at the same level;
(6) For a foreign-invested big project with a total investment of no less than 150 million US dollars (100 million for projects in three cities and seven counties in northern Anhui, e.g. Bozhou City, Suzhou City, Fuyang City and Wuhe City, Guzhen County, Huaiyuan County, Fengyang County, Shou County, Houqiu County, Suixi County), which is eligible for the plan and other relevant conditions, can apply for the planned quota of land use in the area where the project will be executed. The projects mentioned in Catalogue of Encouraged Foreign-invested Industries and listed in the Provincial "861" Investment Plan will have the priority to be provided with the planned quota of land use in the area where the project will be executed;
(7) Projects located in Industrial Transfer Demonstration Zone of the Wanjiang City Belt (including 8 cities, namely, Hefei, Wuhu, Maanshan, Tongling, Anqing, Chizhou, Chuzhou and Xuancheng, Jin'an District and Shucheng County of Lu'an City) and Hefei-Wuhu-Bengbu Comprehensive Experimental Zone for Invention and Innovation (including Hefei City, Wuhu City and Bengbu City) will be provided with special incentive policies;
(8) Taiwanese enterprises which are going to invest in Anhui will be provided with more incentive policies in finance, tax, etc., in accordance with the principle of "enjoying priority and flexible policies at the same level," and meanwhile Anhui Risk Reserve Fund of Special Loan for Taiwanese-invested Enterprise will be established;
(9) Other relevant preferential policies for foreign investment introduced by each city and county. -- Suggestions for foreign investment in Anhui In future, Anhui Province will focus on the development of modern service industry. Specifically, Anhui will initiate service-oriented industrial cultivation program, promote large-scale and high-end development of modern logistics, information service, and health service industry. Anhui will promote integration of Internet and economic society, establish demonstrative Internet culture industrial base and innovative culture industrial base. Anhui Province will also step up developing emerging industries like quantum communication, aviation engine, and high-end medical equipment, and emerging service industries such as technological service, industrial design, and inspection and testing. To pave way for foreign investment, Anhui Province is accelerating foreign investment reform in the following five years by introducing pre-establishment national treatment scheme and making negative list, breaking down market barrier and local protection, and setting up normalized project service mechanism, targeting to create a legal, international, and convenient business environment for foreign investors.
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