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Rules of Shenzhen Special Economic Zone on Administration of Civilian-run Technology Enterprises

Rules of Shenzhen Special Economic Zone on

Administration of Civilian-run Technology Enterprises

 (Originally adopted according to No. 10 Decree of Shenzhen Municipal Government on June 23, 1993, as revised according to No. 118 Decree of Shenzhen Municipal Government on July 23, 2002)

Chapter I General Provisions

Article 1 In order to mobilize positivity of science and technology personnel, accelerate the translation of technological achievement into commodity, and develop hi-tech industry, taking into account of the specific conditions of Shenzhen Special Economic Zone (hereinafter referred to as the "Special Zone" ), these rules are hereby formulated in accordance with relevant regulations of the state.

Article 2 In these rules, civilian-run technology enterprise shall refer to an integrative economic entity of researching, producing and trading, which established by non-employed technology personnel according to these rules in the Special Zone according to the principles of self-funded, incorporated voluntary, autonomy in business operation and self-responsibility system of profit and loss to develop and produce hi-tech products.

Article 3 A civilian-run technology enterprise may adopt the following forms of organization;

(1) A solely-owned enterprise or unlimited liability company. A solely-owned enterprise herein referred to an enterprise that invested in by an investment subject, who bears unlimited liability for debt of the enterprise;

(2) A partnership enterprise. A partnership enterprise herein referred to an enterprise that jointly invested according to partnership contract by two or more than two partners, who jointly conduct business and share incomes and risks. The partners shall bear unlimited joint and several liabilities for debts of the enterprises; and

(3) A limited liability company. A limited liability company herein referred to an enterprise legal person that invested by at least two but no more than fifty shareholders, the shareholders are liable to the company to the extent of the amount of their capital contribution, while the company is liable for the debts of the company with all its assets.

Article 4 After having been examined and approved by the Industrial and Commercial Authority of Shenzhen Municipality (hereinafter referred to as the "Registration Authority" ) according to law, a civilian-run technology enterprise is established.

Article 5 The legal rights and interest of a civilian-run technology enterprise shall be protected by law.

Any civilian-run technology enterprise shall abide by laws, regulations and rules of the Special Zone.

Chapter II The Establishment of Civilian-run Technology

 enterprise and Its Affirmation and Modification

Article 6 To establish a civilian-run technology enterprise shall meet the following requirements:

(1) The initiators of such enterprise shall be non-employed technology personnel, include abdicated, quit working, retired personnel and other personnel who meet the requirements of relevant policies;

(2) A certain amount of technology personnel among employees of the enterprise;

(3) Any initiator or employee shall have legal paten, scientific research achievement or know-how technology;

(4) Complying with industrial policies determined by the Catalog for Guideline of Investment of the Special Zone;

(5) Having a name of its own, a fixed site for production and operations and the necessary conditions for production and operations;

(6) There shall be a written agreement between the partners in the case of establishing a partnership enterprise, while in the case of establishing a limited liability company, there shall be a constitution which complies with the Regulations of Shenzhen Special Economic Zone on Limited Liability Company; and

(7) There shall be corresponding registered capital which is suitable for the researching and developing, producing and operating, and scale of services as well.

The registered capital shall be no less than 300 thousand in the case that a civilian-run technology enterprise organized into a limited liability company.

Article 7 The establishment of a civilian-run technology enterprise shall abide by the following procedure:

(1) Applying to the Registration Authority for registration of an enterprise according to relevant rules;

(2) Applying to the Taxation Authority of Shenzhen Municipality for taxation registration; and

(3) Going through procedure for affirmation of civilian-run technology enterprises with the Municipal Technology Authority.

Article 8 The Municipal Technology Authority shall announce the requirements and procedure for affirmation of civilian-run technology enterprises to the public, and meanwhile shall make the decision on approval or disapproval of affirmation as a civilian-run technology enterprise within 30 days upon the date receiving the written application. The authority shall give reason for those disapproved of affirmation. If the applicant objects to the decision, he may apply for reconsideration to the Administrative Reconsideration Authority of Shenzhen Municipal Government or directly file a lawsuit to the people' s court.

Article 9 All kind of modifications of a civilian-run enterprise shall be applied to the Registration Authority for the registration of the modifications and be recorded by the Municipal Technology Authority.

Chapter III Encouragement and Support

Article 10 After having been approved by Taxation Authority, any civilian-run technology enterprise whose operating period is more than 10 years shall be exempted of business income tax in the first year and second year from the profit-making year, while exempted of half of business income tax from the third year to the fifth year.

Article 11 Those employees of any civilian-run technology enterprise, of which has been put into regularly production for no less than two years, has sound management system and has pay no less than 200 thousand tax for each year, may apply for naturalization of permanent residence of Special Zone according to relevant rules of the Special Zone. The quota for naturalization shall lie on the amount of tax paid.

Article 12 In case that key members of business of any civilian-run technology enterprise need to leave the country or go abroad, relevant procedure shall be preferential gone through according to relevant rules. The department or going abroad of any chief officer shall be examined and approved with responsibility of the Municipal Technology Authority, while in the same case of the general technological personnel shall be examined and approved with responsibility of the leading official of the enterprise.

Article 13 The technology personnel who have worked in any civilian-run technology enterprise for maturity of one year may attend the municipal assessment of tenancy qualification of professional and technical posts according to the uniform requirements formulated by the Office of Municipal Leading Group of Professional Titles Reform. The appointment of professional and technical posts of those personnel shall be affirmed by the enterprise itself.

Article 14 Any civilian-run technology enterprise may apply to the Municipal Technology Authority for declaration of scientific researching project or affirmation of hi-tech enterprise. Those civilian-run technology enterprises affirmed to be hi-tech enterprises may enjoy relevant preferential policies for hi-tech enterprises granted by the state.

Article 15 Those civilian-run technology enterprises who have sound management system and capacity of repayment may apply for loans to banks according to relevant rules.

Article 16 The repatriation of returned personnel are encouraged to set up civilian-run technology enterprises in the Special Zone. The returned personnel who establish civilian-run technology enterprises or work in those enterprises may enjoy corresponding preferential policies according to relevant of the Special Zone on introduction of professionals.

Article 17 Those civilian-run technology enterprises who meet relevant provisions of laws, regulations and rules of the Special Zone may be reorganized into joint-stock limited companies, while after having been approved, they can establish joint ventures with foreign merchants and establish overseas branches or network for sales.

Chapter IV Administration

Article 18 The Municipal Technology Authority shall take charge in the affirmation of, supervision over, coordination with and provision of service for civilian-run technology enterprises in the Special Zone according to law.

Article 19 Any civilian-run technology enterprise may retain professional according to need. The personal file of the employee of the civilian-run technology enterprise who has resigned his public office may be registered with the Communication and Service Center for Persons with Ability of Shenzhen Municipality.

Article 20 The appointment of personnel by any civilian-run enterprise shall abide by relevant rules of Personnel and Labor Affairs Authority of Shenzhen Municipality, and all-employee labor contractual system shall be put into practice.

Article 21 Any civilian-run technology enterprise shall adopt social insurance system for its employees according to relevant rules of the Special Zone.

Article 22 The Municipal Technology Authority shall implement discrimination over newly established civilian-run enterprises once a year. Those enterprises which fail to meet the requirement as stipulated by these rules for three continuous years shall not enjoy preferential policies for civilian-run technology enterprises and administrated by the Municipal Technology Authority as civilian-run technology enterprises any more.

Article 23 The Registration Authority shall carry out annual inspection over civilian-run enterprises according to law. In the case that a civilian-run technology enterprise applies for registration of annual inspection, it shall submit the certificate for having been discriminated by the Municipal Technology Authority. For those civilian-run technology enterprises who meet requirements, the Registration Authority shall approve the registration, while for those who fail to meet the requirements shall be canceled of the registration.

Article 24 Any civilian-run technology enterprise shall abide by law to carry on its business and pay taxes.

Article 25 Any civilian-run technology enterprise shall abide by law to set up and perfect its accounting system and submit accounting and statistics report form to relevant authority on schedule.

Article 26 The dissolution, declaration of bankruptcy and cancellation of a civilian-run technology enterprise, the enterprise shall be liquidated in advance according to the law. The termination of a civilian-run technology enterprise shall be registered of cancellation by the Registration Authority and announced to the public.

Article 27 In case that any applicant stoops to deception at the time applying for affirmation of a civilian-run technology enterprise, which results in detriment to the interests of the state, he shall be ordered to make rectification by the Municipal Technology Authority; in case such application has been approved, such affirmation shall be withdrew and informed to relevant authorities such as Industrial and Commercial and Taxation, etc. for cancellation of preferential policies already enjoyed by the enterprise, meanwhile its illegal gains shall be confiscation as well.

Article 28 In case the Municipal Technology Authority and its officials, when engaging in affirmation of civilian-run technology enterprises and other relevant matters, in violation of laws, regulations and these rules by abusing of authority or practicing favoritism, shall be investigated and prosecuted according to the law by the Municipal Supervision Authority and other relevant authorities.

Chapter V Supplementary Provisions

Article 29 The Shenzhen Municipal People' s Government shall be responsible for the interpretation of these rules.

Article 30 These rules shall take effect as of the date of its promulgation.


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