The following preferential policies are made according to the relative provisions stipulated by the higher-level governments and the concrete conditions of Tangshan city with a purpose of implementing the strategy of "export-oriented economy bringing along others", making greater efforts to open further to the outside world and attracting more foreigner to make investment in Tangshan.

1.The foreign-funded productive enterprises established within the area directly under Tangshan city with an operation period of more than 10 years, beginning from the year with profit, are exempted from enterprise income tax for the first two year, and deducted by 50% of the enterprise income tax from the 3rd to the 5th year .As for those set up in the counties or cities which do not belong to the coastal economic opening area, the enterprise income tax will be collected first and then returned to the enterprise income by the local government. All foreign-funded enterprise within Tangshan territory, from the year with profit, are exempted from local income tax for 5 years and deducted by 50% of the local income tax from the 5th to the 10th year. From the year of beginning production or operation, foreign-funded enterprises are exempted for five years from building tax and license fare of vehicle and vessels.

2.Foreign-funded enterprises with advanced technology and /or with their products exported and with an operating term of over 15 years, from the year with profit, are exempted from enterprise income tax for the first 7 years and deducted by 50% of enterprise income tax in the following 8 years (the enterprise income tax will be collected first in accordance with the stipulation of the tax law and the returned to the enterprises by using local funds). In addition, with the approval of the tax authorities the local income tax, building tax and vehicle &vessel license fare can be exempted.

3.For foreign-funded enterprises engaged in agricultural, forestry and husbandry businesses, with an operating term of over 10 years, the enterprise income tax, from the profit-making year, will be exempt in the first 5 years and will be deducted by 50% in the following 5 years (the income tax will be levied first and then returned to the enterprises with local funds according to this policy).

4.For foreign-funded enterprises engaged in energy, communications and port construction projects, with an operating period of over 20 years, starting from the profitable year, the enterprise income tax is exempted for the first 10years and deducted by 50% for the following 10 years (the tax is levied first and then returned to the enterprises with local funds according to this stipulation). With the approval of the tax authorities, the local income tax, building tax and license fare of vehicles and vessels can be exempted.

5.Priority will be given to foreign-funded enterprises, which will need new land for the projects involving new and hi-tech, energy resources, communications, agriculture and social welfare undertakings. Land can be provided in a way of selling land-uses right at the lowest price and the land-use fee will be exempted for 5-10 years. Also, land can be provided in the method of leasing, with the rental paid yearly. If the land needed by foreign-funded enterprises is used for ordinary industrial, commercial and service projects, the land will be provided in accordance with the law, but the land-use fee will be exempted for 3-5 years.

6.If foreign-funded enterprises use the existing land whose use right belongs to the Chinese parters, the land-use right can be sold at the price of 40% deduction; and the land can also be rent at 5-150 yuan/sqm per year according to its locations and conditions.

7.For foreign businessmen who make investments in closed-down, bankruptor loss-making enterprises with productive purpossses, with the approval of the government at city and county levels, foreign investors will enjory preferential treatment in terms of reduction or delay payment for buying the land-use right, and exemption from land-use fee for 3-5years.

8.Foreign businessmen are encouraged to buy out closed-down enterprises. If the foreign investors are responsible to arrange the former employees, the prices can be reduced to the lowest level.

9.In case the investment made by foreign businessmen is in form of patented or proprietary technology, which proves to be remarkably effective for reducing energy and material consumption, increasing economic returns, and filling up the above-city-level technical gap, the proportion of investment in intangible assets can be accordingly appropriately raised, and the technology application term can be accordingly prolonged with the approval of the foreign economic and trade department.

10.With the approval of foreign exchange control authorities, foreign businessmen are permitted to establish enterprises in form of either a joint venture, a cooperative or an exclusively foreign-owned business with the investment contributed in Chinese currency.

11.After contributing the proportion of registered capital as defined in the contract, a foreign investor is permitted to jointly establish an enterprise with an institute in the city, and to engage in joint production or processes with the approval of the industrial and commercial administration

12.A foreign-funded enterprise is permitted to sell the products produced by itself in this cit under contract terms for domestic markets

13.A foreign-funded enterprise has the right to undertakes according to the law employment, recruitment, appointment resignation, reward and dismissal of staff and workers and the power to determine labor using methods, organization structure and allocation of manpower, and the right to refuse to provide the various kinds of arbitrary funds collection, unjustified charges, unreasonable apportioned funds or unauthorized appraisals.

14.For a foreign-funded enterprise, apart from the funds that are to be drawn according to the state regulations for its Chinese employees' endowment insurance, unemployment insurance, medical treatment insurance, subsidies for commodity prices and housing subsidies, there is no need to pay any other subsidies, and the housing subsidies drawn are to be reserved by the enterprise for setting the employees' housing problems.

15.During the construction and operation period of a foreign-funded enterprise, only 50% of the costs for the newly added necessary facilities for water, heat and gas (steam) supply will be charged, and power, telecommunication and transportation facilities as well as raw and auxiliary materials required will be preferentially provided at prices identical to those for domestic enterprises.

16.The accommodation, travel, post and communication, and recreational expenses incurred by foreign businessmen during work, investigation and tour in Tangshan will be charged at the same rate as those for Chinese people, and can be paid in Chinese currency.

17.Compatriots from Hong Kong, Macao and Taiwan also enjoy the preferential policies as specified herein when they make investment in Tangshan.

18.In case of any discrepancy found between the previously and currently formulated preferential policies, the version here with shall prevail.

19.The Opening-up Affairs Office of Tangshan Municipal People's Government is responsible for the interpretation of the regulations as defined herein.

20.The regulations formulated herewith shall come into force beginning from the date of their official release.