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Apart from improving the investment environment and simplifying approval procedures for starting a business, Beijing also offers foreign investors a series of preferential policies in various respects.

1. Simplification of Approval Procedures

Beijing has been striving to improve its administration efficiency, with one-stop service centers established in its 18 districts and counties to make it easier for both domestic and overseas investors to set up business in the city. Some of the districts, including Haidian, Chaoyang and Huairou have initiated online registration and joint approval efforts. In a pilot program launched in Haidian District in 2009, a great number of items originally subjected to approval of different municipal-level government authorities, were handed over to the district's administrations, in the core part of the high-end industrial functional area-Zhongguancun National Innovation Demonstration Area. The tactical move aimed at simplifying the administrative procedures concerning the setting up of businesses, accreditation of high and new technology enterprises and other items. Additionally, a one-stop service center was set up to offer various public services, spanning from consultation, to document verification and joint approval. These high-quality practices in the administrative reform in the district will be gradually expanded to cover other Beijing districts and counties.

2. Preferential Policies

Some of the preferential policies, in line with the national- and municipal-level laws and regulations, foreign investors may enjoy in Beijing, are as follows:

1) Tax Incentive Polices

Those enterprises and projects in industrial sectors encouraged and supported by the State are eligible for tax incentives, despite the fact that China began to implement the new Corporate Income Tax (CIT) law in 2008, which crossed out many of the tax incentives originally enjoyed by foreign investors. The law, under the principle of "industry-orientation first, geographical location second," sets the unified income tax rate for both domestic and foreign companies at 25 percent. Yet, a lower tax rate is available to those qualified as small and micro companies (20%) and high-tech enterprises that require the State's key support (15%). Reduction or exemption incentives are also accessible to investments in i) agriculture, forestry, animal husbandry and fishery projects; ii) infrastructure development; iii) environmental protection and energy/water conservation projects; and iv) qualified technology transfers. Various exemptions and reductions from customs duty and import-VAT are also available.

2) Incentive Measures for High and New Tech Industry

Beijing has drawn up various incentive measures to bolster the development of its high-tech industry. High-tech enterprises that require the State's key support enjoy a preferential income tax rate of 15 percent. Accredited high-tech enterprises and accredited projects converting advanced new technological achievements into productivity enjoy relevant preferential treatment by the State and the municipality. Those high-tech enterprises in Zhongguancun Science Park and Beijing Economic and Technological Development Area are also eligible for the preferential policies set by the development zones, respectively. In addition, the Beijing Municipal Cultural and Creative Industry Promotion Center was founded in 2006 to help promote the industry's development. Special funds have also been set up to support the development of creative industrial clusters and other relevant projects.

3) Incentive Policies for the Financial Industry

Beijing is striving to strengthen the financial functions of the following districts: Central Business District (CBD), Western Section of Zhongguancun, East 2nd Ring Business District and Lize Business District. The city has staged a series of incentive measures to attract and develop domestic and overseas financial organizations and institutions in these districts. Take CBD as an example. Those financial businesses newly-established in or relocated to the CBD after Feb. 1, 2005, can get a one-off subsidiary sum (of up to 10 million yuan) from the Chaoyang District administration based on their register capital. There are also subsidiaries available for the purchase or rent of offices for financial enterprises that set up their regional headquarters or headquarters there. Other incentive polices include providing financial support for specific projects and solving the schooling problem for children of the senior management of these financial enterprises.

4) Preferential Policies for Setting up Regional Headquarters in Beijing

Beijing encourages multi-national corporations to set up their regional headquarters and R&D centers in the city. In accordance with the Measures on Implementation of the Rules for Encouraging Multinational Organizations to Set Up Their Regional Headquarters in Beijing (2009), multinationals that establish their regional headquarters in or moving their headquarters to Beijing after Jan.1, 2009, are entitled to either one-off subsidies or three-year subsidies under the conditions that i) they have a registered capital of 100 million yuan or more (subsidies can be up to 10 million yuan); or ii) they rent offices in Beijing. Newly-established or relocated headquarters which purchase or build offices in Beijing shall enjoy one-off subsidies. Regional headquarters with annual revenue of more than 100 million yuan over the first year may be awarded an incentive starting from 1 million yuan and up to 10 million yuan. The customs and entry-exit inspection and quarantine watchdogs would also facilitate customs clearance for their R&D centers.

5) Financial Support to Small and Micro Businesses

The Management Committee of Zhongguancun Science Park has reduced or exempted taxes on small and micro businesses based in the park through such measures as the pre-tax deduction of enterprise R&D expenses and the accreditation of high and new tech enterprises. It has also helped a great number of small and medium-sized businesses to develop through its "Gazelle Program," a secured loan program to help offer R&D funding and subsidized loans to these high-tech, high-growing businesses. Other recently installed measures include those on the promotion of venture capital investment for these businesses. In addition, a venture incubation service system has been put in place to help the development of more than 1,000 small and micro businesses annually.

6) Preferential Policies for Skilled Professionals

Beijing has drawn up a series of incentive policies to attract overseas senior personnel to work and set up business in the city. Such preferential policies, apart from the one-off reward of 1 million yuan per person, cover many aspects which include the priority in accessing venture capital guiding funds, tax incentives, patent subsidiaries, work environment, salaries, residence permits and house buying.

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