Preferential policy Policy for Investment

in Zhoucun District

Article I Financial Support Policy

I For new-built productive enterprise with foreign investment of more than 50 million yuan (or 5 million U.S.dollars), the total local-keeping art of their VAT for the first production year should be returned to them as government subsidiary fees and 50% for the next two years. For new-built productive enterprise with foreign investment between 30 and 50 million yuan (or 3-5 million U.S.dollars), the 75% of the local-keeping part of their VAT for the first production year should be returned to them as government subsidiary fees and 25% for the next two years. For new-built productive enterprise with foreign investment between 3 and 30million yuan (or less than 3 millions U.S. dollars), the 50% of the local-keeping part of their VAT for the first production year should be returned to them as government subsidiary fees and 25% for the next two years.

II For newly-built productive enterprise, in accord with the high & new tech product catalog issued by the state or with fixed assets investment more than 100 million yuan or investment abroad more than 10 million U.S.dollars, from their profit-making day, the total local-keeping part of their VAT for the first five production years should be returned to them as government subsidiary fees.

III For newly-built productive enterprise, from their profit-making day, the total income tax they have actually paid for the first three years should be returned to them as government subsidiary fees, and 50% for the next two years.

IV For enterprises established by annexing or investing or purchasing in modifying industrial enterprise, with tax payment of original enterprise in previous year deducted, they should be favourably treated according to (I)—(III) of this article based on the new tax part.

Article II Land policies

I Land-use period can deal with based on the longest period according to the stipulations of our country. The enterprise can also apply for extension of the tenure when the tenure of the land ended.

II For the projects in accord with the high & new tech product catalog issued by the state or promoting the local economy should be favourably treated.

III For investors using the transferred land to initiate enterprise, the local government shall directly remise the land-use right to the newly-built enterprises and mitigate 80% of land transfer fees that the government should take over.

Article III Charge policy

I In going through the relevant formalities needed for investing in new projects in our district, only book cost of the certificates or licenses and administrative fees received by national, provincial and municipal government are charged.

II For any newly-built foreign-invested project, within the first three years after it is put into operation, just only water resource fee, environmental projection fee, fee for over-outlet of polluted material, sewage fee, book cost of certificates or licenses and administrative fees received by national, provincial and municipal government are charged.

III All charging items involved foreign-invested enterprises should be collected according to the minimum limit except for those prescribed by national and provincial government as well as mentioned in above articles.