Enterprise shall proceed to the Administration of Foreign Exchange for foreign exchange registration for Foreign Exchange Certificate within 30 days after the date of issuance of business license. Foreign-funded enterprise may independently make decision as to borrow foreign exchange from domestic Chinese banks or from foreign banks overseas or stationed in China. However, the above-mentioned borrowings shall not be repaid ahead of time with purchased foreign exchange. The foreign-funded enterprise shall register the foreign exchange debt with the Administration of Foreign Exchange with the Foreign Exchange Register Certificate and the duplicate copy of the loan agreement within 15 days after the agreement is signed.

Taxation

I. Business income tax:
The rate of business income tax for foreign-funded enterprise and foreign enterprises is 15%. Foreign-funded enterprises shall be exempted from local income tax.

Productive enterprises engaged in industry, transportation (excluding passenger transportation), farming, forestry and animal husbandry with an operation period of more than 10 years are entitled to the tax holiday for the first 2 profit-making years and a 50% tax concession for the following 3 years.

Enterprises investing in the construction of wharves and docks with an operation period of more than 15 years are entitled to the tax holiday for the first 5 profit-making years and a 50% tax concession for the following 5 years.

At the maturity of the above-mentioned tax holidays and concessions, enterprises shall enjoy a preferential tax rate of 10% in the year when they export 70% or above of their yearly output and generate a foreign exchange surplus, and enterprises with advanced technology shall be eligible for the same preferential tax rate of 10% for the following three years.

Enterprises of service industry with foreign investment exceeding US $5 million and an operation period of more than 10 years are qualified for the tax exemption for the first profit-making year and a 50% tax concession for the following 2 years.

When an enterprise suffers a loss in a year, it may cover such a loss by drawing a corresponding sum from the income of the next year. Should the income of the next year be inadequate to make up for the loss, the enterprise may continue to draw from the income of the subsequent years but within a period not exceeding 5 years.

The foreign investor of a foreign-funded enterprises who has reinvested his/her profits from the enterprise in the same enterprise or in establishing another enterprise with an operation period of over 5 years shall enjoy a 40% refund of the tax on the reinvested profits. If such profits are reinvested in establishing or expanding an export-oriented enterprise or a technologically advanced enterprise with an operation period of over 5 years, the foreign investor shall enjoy a 100% refund of the tax on such reinvested profits.

The business income tax is levied on a yearly basis and paid in advanced in quarterly installment. The payment of taxes shall be settled within five months after the accounting year, with refund for any overpayment or a supplemental payment for any deficiency.

II.Value-added tax
Mainly imposed on industrial and commercial enterprises, the value-added tax (VAT) is generally levied on the production, wholesale, retail and import of commodities and taxable labor service with a basic tax rate of 17%.

III.Consumption tax
Enterprises producing, processing or importing any of the eleven types of commodities such as cigarettes, liquor and alcohol, cosmetics, and car shall pay consumption tax prior to VAT. The consumption tax shall be included in the calculated prices. The tax rate is 3-50% for commodities on advalorem basis.

IV.Business tax

VI. Urban real estate tax (applicable to foreign-funded enterprises)
(Now only the housing tax shall be imposed on foreign-funded enterprises, the land tax shall not be imposed)
Taxpayer: The housing tax shall be paid by the owner of the relevant housing property. When the housing property is mortgaged, the housing tax shall be paid by the pawnee. If both the property owner and the pawnee live outside Xiamen, or if the property right has not yet been settled, or if there is a dispute in the lease or mortgage of the housing property and the dispute has not yet been settled, the administer or the user of the housing property shall pay the tax.

Taxation basis: The taxation will be based on the book value. When the housing property is leased out, the taxation will be based on the rent.
Tax rate: The yearly tax rate will be 1.2% for those calculated by the book value and 12% for those by rent.
Tax declaration: The real estate tax shall be paid every half a year in March and September respectively.
Land value increment tax: This is a tax imposed on the achieved incremental value of the land use right, buildings on the land and the attached structures transferred by the taxpayer (or "transferred real estate" in short) at the stated tax rates.
The incremental value means the income of the taxpayer from the transferred real estate after deducting the items of deduction stipulated by the tax law.
Taxable amount = incremental amount * stated tax rate - deductible amount * quick deduction coefficient.

VII. Personal income tax
The personal income tax is levied on the income earned from inside and outside China by those whose domiciles are inside China or by those who have lived in China for over a year though their domiciles are outside China. The tax is also levied on the income earned from inside China by those who neither live in China nor have their domiciles inside China or by those who have lived in China shorter than a year.
 

Tax Schedule I (applicable to the income from salary and wage) Unit: RMB

Note:
The amount in Graded Income Including Tax and in Graded Income Excluding Tax shall be the net income after deducting relevant expenses stipulated by the tax law.
The Graded Income Including Tax is applicable to the taxable income from salary and wage of the taxpayer, and the Grade Income Excluding Tax to the income from salary and wage from which the income tax is withheld.


VIII.Tariff Concession
Foreign-funded project that transfers technology and falls within the Encouraged Projects or Restricted (B) one on the Industrial Catalogue Guiding Foreign Investment are exempted from customs duties and import value-added tax on the imported self-use equipment within the investment amount, except those commodities listed in the Catalogue of Non-Duty-Free Imported Commodities of Foreign Invested Projects. The separate imported accessories and parts under the carry-over items of foreign investment projects shall pay import duties and import value-added tax in light of the laws and regulations

IX.Tax rebate
Goods exported by foreign-funded enterprise or by its agency are covered by the scheme of tax exemption, tax offset and tax rebate. To be more specific, the value added in the current process (or the last process) of goods exported by the productive enterprise is tax exempted. The tax not covered by the tax rebate scheme shall be calculated by the FOB value and the difference between tax rate and tax rebate rate, and shall be deducted from all the paid tax of the enterprise on purchase. The rest of the paid tax on purchase can be offset by the tax on domestic sales; should the sales tax be insufficient for the offset, the balance can then be reclaimed from the relevant authorities for tax rebate.

For Hong Kong compatriots who make investment in Xiamen or derive income from Xiamen, the current tax policy towards foreign company, enterprise and other economic organization, and foreign nationals also applies.

Land

Land shall be provided to foreign-funded enterprises under paid transfer. Foreign-funded enterprises may acquire the land use right after they have applied for use of the land in line with required procedures and paid due fees (the charge standard as per the yearly publication of the municipal government) in accordance with relevant regulations. The land for commodity dwelling development shall be provided by auction or tender.

The maximum duration of land use right varies with different purposes: 50 years for use by industry, education, science and technology, culture, medical institutions, and sports, 40 years for commercial, tourism and recreational use, 70 years for residential use and 50 years for comprehensive development or others. At the expiration, application for extension shall be filed at least one year prior to the expiration if the land user intends to use the land for a further period.

The land acquired on payment can be transferred, leased or mortgaged within the approved duration and purpose of use, as long as the legal procedure of transfer registration is completed.

Entry and Exit Regulations

Entry visa for persons arriving at Xiamen port from outside China:

(1) Taiwan residents
The Taiwan resident applying for landing visa due to the failure to acquire the Laissez-Passer for Taiwan Resident or other effective entry visas outside Chinese mainland, shall present his/her valid Taiwan identity certificate and entry/exit documents.
Those who hold the Laissez-Passers for Taiwan Residents with a validity of over 6 months can apply for one-time entry visa with validity under 3 months. Those who do not have the Laissez-Passers for Taiwan Residents may apply for the Laissez-Passers for Taiwan Residents valid for one entry and exit. The validity of such visa shall not exceed 3 months. However, they may apply for extension of visa in the entry and exit administrative unit of the local public security departments.

(2) Hong Kong and Macao residents
Compatriots from Hong Kong and Macao without the Home Return Permits or the Laissez-Passers for Hong Kong and Macao Residents intending to visit relatives or carry out business activities in Chinese mainland for a short period may apply for the Laissez-Passers of the People's Republic of China, which has a validity under three months and is valid for one entry. When applying for the Laissez-Passers, they shall present their Hong Kong or Macao identity certificates.

(3) verseas Chinese
Normally, overseas Chinese shall enter China with the passport of the People's Republic of China. However, if their documents exceed the validity and they are unable to apply for extension outside China, they may apply for the Laissez-Passers of the People's Republic of China with presentation of their valid identity certificates or re-entry documents issued by their respective residence countries.

(4) Foreigners
Failing to apply for visa with Chinese visa granting offices abroad due to urgent matters, the foreigner may apply for visa related to the matter with his/her common passport issued by a country that has diplomatic or official trading relationship with China or with other travel documents. When applying for a visiting visa ("F" visa), the foreigner should submit a letter of invitation from an authorized Chinese unit, a government above the township level, or any companies or enterprises, or an invitation card of a trading fair. The foreign tourist to visit Xiamen may apply for the SEZ Tourist Visa, which will allow him/her to stay in Xiamen for 5 days.

(5) A foreign tourist party with 9 persons may apply for Tourist Group Visa. However, they should contact Xiamen Tourist Group Co. in advance and acquire a letter of reception from it.
While applying for entry visas, the above persons must answer any inquiries about their details, fill the application forms and hand in 2.5-inch recent photos.

Regulations for persons entering China from overseas

1.In accordance with the law of China, foreigners, Hong Kong, Macao and Taiwan residents, and overseas Chinese shall register for temporary residence after entering China. Those who will stay in the city shall report to the local police substation for temporary residence within 24 hours, those who will stay in the countryside shall do the same within 72 hours, and those who will stay in the hotels shall register at the reception counters.

2. Foreigners staying in China should not do anything irrelevant to the type of visa they hold. They shall not seek employment without approval.

3. Those entering China from abroad shall stay in China only within the validity of the visa, endorsements or relevant documents. If they are unable to leave China in time because of their business, they should apply for extension to the exit and entry visa office of the local public security department, otherwise, their stay will become illegal.

4. Those holding SEZ Tourist Visa are only allowed to stay in Xiamen City for five days. They shall not go outside Xiamen unless they have urgent matters to handle and acquire an additional visa from the Exit and Entry Visa Office of Xiamen Public Security Bureau.

5. Taiwan residents who have their businesses in Xiamen, or work, study, engage in business and trade or possess real estate in Xiamen may apply for temporary residence and multiple exit and entry endorsements valid from 1to5 years. The Taiwan resident who, due to his/her commercial and trading activities, has come to Xiamen for five times within a year, or intend to take part in the "China Fair for International Investment and Trade" and the "Straits Fair", may apply for multiple exit and entry endorsement valid for 1 year.

6. For the foreign-funded enterprise with a total investment above USD 30 million, or a foreign exchange earning over USD 10 million in the previous year, or a total tax payment of over RMB 5 million in the previous year, their investors or high-ranking foreign executives and technicians may apply to the exit and entry visa office of the public security department for alien residence permit valid from 1 to 3 years and a multiple entry visa covering the same period if they are able to present relevant evidencing materials.

Labor protection

1.The foreign-funded enterprise may determine its own organizational structure and staffing and independently formulate its wage distribution and level and shall inform the local labor administrative department of the recruitment of staff and workers within 30 days after recruitment. The enterprise shall sign a labor contract with the employee when the labor relation is established. The notice to terminate the contract shall be given to the other party of the contract one month in advance and relevant procedures must be observed. Employees should enjoy paid holidays according to the State regulations, such as the public holidays, general holidays, home leave, marriage and funeral leave and maternity leave.

2. Enterprises employing aliens shall apply for work permits with Xiamen Labor Bureau (with a fee of RMB 150/person/year for Hong Kong, Macao or Taiwan compatriots and RMB 300/person/year for foreigners) and residence permits with Xiamen public Security Bureau.

3.The regular working time shall not exceed 8hours a day and 40 hours a week. Workers should have at least a day off every week. The maximum overtime work shall not exceed 3 hours a day or 36 hours a month. The minimum overtime pay for overtime work at weekdays, weekends and public holidays shall be 150%, 200%and 300% of that for normal work respectively. The monthly wage should not be lower than the minimum monthly wage level announced by Xiamen Municipality of the year.

4.Foreign-funded enterprises shall join the social insurance arrangements in line with the relevant State regulations and pay premiums for endowment insurance, unemployment insurance, medical insurance, and industrial injury insurance.

5.Labor disputes are generally settled in the sequence of consultation, mediation, arbitration and legal prosecution. Xiamen has established Xiamen Labor Dispute Arbitration Committee, which settles labor disputes and protect the legal interests of enterprises.

Environmental protection

China exercises the system of appraisal of impacts of construction projects on the environment and the classified control of construction projects according to their degree of impacts on the environment. For construction projects that may have serious impacts on the environment, the Report on Environmental Impacts shall be prepared; for those that may have mild impacts, the Report Form of Environmental Impacts shall be formulated; and for those with small impacts, no assessment of impacts on the environment is required, but the Environmental Impact Registration Form shall be filled. The Report on Environmental Impacts, the Report Form of Environmental Impacts, or the Environment Impact Registration Form shall be submitted by the construction unit to Xiamen Environmental Protection Bureau for approval.

When a construction project requires accessory environmental protection facilities, such facilities should be designed, constructed, and put into operation simultaneously with the main project. The preliminary design for the construction project shall filed with Xiamen Environmental Protection Bureau.

The construction unit should apply to Xiamen Environmental Protection facilities a month prior to the trial operation of the construction project. During the trial operation, the construction unit should monitor the running of the environmental protection facilities and the emission of pollutants. The construction unit shall, within three months after it begins trial operation of the construction project, apply to Xiamen Environmental Protection Bureau for completion examination and acceptance of the environmental protection facilities of the construction project. The construction project can only be put into operation or use when the environmental protection facilities are found to meet the requirements.

Standards for Controlling Water Pollutant Discharge in Xiamen (DB35/322 - 1999)
(The following figures are the maximum concentration tolerance

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