The Regulations of Beijing Municipality on the Confirming of the New-Technology Enterprises

Beijing Municipal Science and Technology Commission

(December 1998)

1. These regulations are formulated for the purpose of promoting the development of high- and new-technology industries in and strengthening the confirming of new-technology enterprises in Beijing Municipality in accordance with No. 47 Document (1988) of the People¡¦s Government of Beijing Municipality and the relevant regulations issued by the Ministry of Science and Technology (originally called the State Science and Technology Commission).

2. These regulations are applicable to all the new-technology enterprises set up in the administrative territory of Beijing Municipality.

3. The Beijing Municipal Science and Technology Commission (BMSTC) is the department of the People¡¦s Government of Beijing Municipality taking charge of the examination and approval of new-technology enterprises as well as implementation of these regulations.

4. The scope of new technologies and the products thereof are as follows

(1) Microelectronics, electronic information technologies and related products;

(2) New pharmaceuticals, bio-technologies and related products;

(3) New material technologies and related products;

(4) Photoelectron and integrated photo-electron-mechanics technology and related products;

(5) New energies and high-efficient energy-saving technologies and related products;

(6) Environmental protection and environmental ecology technologies and related products;

(7) Global, space and marine technologies and related products;

(8) Nuclear application technologies and related products; and

(9) The technologies and the products thereof relating to the above-said technologies and other high- and new-technologies and the products thereof meeting the requirements of the characteristics of Beijing Municipality. The catalog of all the high- and new-technologies and the products thereof and the catalog of various kinds of high- and new-technologies and the products thereof compiled by the BMSTC and the Ministry of Science and Technology (originally called the State Science and Technology Commission) as well as the development orientation of high- and new-technologies both at home and abroad plus the concrete conditions in Beijing Municipality shall be compiled and issued regularly.

5. New-technology enterprises are knowledge-intensive and technology-intensive economic entities. Those who want to set up a new-technology enterprise must satisfy the conditions listed below:

(1) The enterprise shall be engaged in research, development, production, and business management of one of more technologies and the products thereof listed in Article 4. But this does not include those who are engaged in commercial business only.

(2) The enterprise shall practice the system of independent accounting and self-management and assume sole responsibility for its profits and losses.

(3) The responsible person of the enterprise is a professional technological person as well as a full-time leading official of the enterprise.

(4) The number of employees having received college education shall account for over 30%of all the employees; and the number of scientific and technological personnel having received college education of those enterprises producing high- and new-technology products or labor-intensive new-technology enterprises that offer high- and new-technology services shall account for over 20% of the total employees.

(5) The enterprise shall have a fund of more than 100,000 yuan, its per capita labor productivity shall be more than 150,000 yuan a year, its per capita annual pre-tax profit shall be more than 30,000 yuan, and it shall have production and business sites and relevant facilities that meet the needs of its business scale.

(6) The enterprise shall have its Articles of Association and strict technological management system and financial and accounting management system.

(7) Its registered business term is more than 10 years long.

6. The BMSTC will examine all new-technology enterprises every year according to Articles 4 and 5 and the standards listed below:

(1) The fund used for research and development of high- and new-technologies shall account for more than 3% of the enterprise¡¦s total income.

(2) The combined income of a new-technology enterprise from technological income and sales of high- and new-technology products shall account for more than 50% of the enterprise¡¦s total income.

Technological income means: added-value income of the new-technology enterprise from scientific research, technological development, technological consultation, technology transfer, technology stock, technical service, technical training, technical contract, technical engineering designs and contract projects, technology export, digesting of imported technology, as well as technologies used in trial-produced products and new products. This does not include the income from commercial business.

The term of a high- and new-technology product lasts from 3 to 5 years, and the term of a high- and new-technology product that requires a long technical period can be extended to 7 years.

7. A new-technology enterprise, in case it fails the annual examination by the BMSTC, will be deprived of its status enjoying preferential treatments, and in case it fails the annual examination for three years running, will be deprived of its qualification as a new-technology enterprise.

8. A new-technology enterprise, when modifying its scope of business, or merged into another enterprise, or splitting as a new enterprise, or changing its business, or moving into a new site, and/or stopping business, shall register with industrial and commercial authority and tax authority, upon approval by the BMSTC.

A new-technology enterprise, in case it practices fraud and deception in declaration or in annual examination by the BMSTC or violates any regulations of this set of regulations, shall be given a criticism for education or an order to correct its mistakes or even stop business by canceling its certificate of new-technology enterprise in accordance with the seriousness of each case. In case it violates the regulations on the industrial and commercial management and on tax payment, it shall be handled by the industrial and commercial authority and the tax authority in accordance with the law.

9. The right to interpret the specific implementation of these regulations resides in the BMSTC.

10. These regulations shall go into effect on the day they are promulgated.