Regulations of Shenzhen Special Economic Zone on High and New

 Technology Industry Area

(Adopted at the sixth meeting of the Standing Committee of the third Shenzhen Municipal People' s Congress on March 22, 2001)

Chapter ¢ñGeneral Provisions

Article 1 In order to promote and safeguard the sustainable development of the high and new technology industry area of Shenzhen Special Economic Zone (hereinafter referred to as "high and new area" ), normalize the administration of the high and new area, and provide the perfect legal environment and services with high efficiency for enterprises in high and new area, these regulations are formulated in accordance with the basic principles of relevant laws and regulations and the actual circumstances of Shenzhen Special Economic Zone (hereinafter referred to as "Special Zone" ).

Article 2 "The high and new area" referred to in these regulations means the area which is established in Shenzhen Bay by the Shenzhen Municipal People' s Government (hereinafter referred to as "the municipal government" ) and other economic zone delimited by the municipal government, whose objective is to develop the high new technology industry, and which shall be approved by the competent science and technology department of the State Council.

The high and new area shall be unifiedly planned and administrated by the municipal government

Article 3 These regulations shall apply to organs and individuals in high and new area or those out of the high and new area that conduct activities involving these regulations in high and new area.

Article 4 The development goal of the high and new area is to be the base of science and technology achievements, as well as the cultivation and education base of innovators.

The high and new area mainly develops the industry of high and new technology and other industry with close intelligence.

Article 5 The high and new area enjoys every preferential policy that the State or Guangdong Province provides to support the high and new technology industry. Enterprises with high and new technology in high and new area may choose to apply to the policy in the preceding paragraph that is most favored to themselves.

Article 6 The capital invested in high and new area, incomes and other property rights as well as other lawful rights and invests of organs and individuals shall be protected according to law, and no organ or individual may occupy it with illegal means or conduct other infringements.

Organs and individuals may conduct the activities that laws, regulations and rules have no prohibition in explicit terms except those that harm the social public interests and violate the social morality.

Article 7 The intellectual property of organs and individuals in high and new area shall be protected according to law, and no organ or individual may infringe it.

It is encouraged that enterprises, colleges, scientific research institutions and relevant people conduct the activities of patent application, trade mark registration and copyright registration of softwares, acquire independent intellectual property and take protective measures to it.

Chapter ¢ò Encouragement and Safeguard

Section 1 Talent Introduction

Article 8 The relevant administrative departments of the municipal government shall issue the "job certificate of talent" or handle the formality involving the household registration for the returned personnel or talents in the field of science, technology and administration from other provinces or cities that the high new area introduces.

The people with "job certificate of talent" may enjoy the same treatment as the people with the household registration in this city in the aspects such as child' s education and house purchase.

Article 9 If the returned personnel are employed to hold the professional and technical post in high and new area, they shall not be limited by the quota of the employing organ.

The returned personnel having acquired the professional practicing qualification abroad, if the country where he acquired the qualification has the mutual authorization agreement with China, may get the corresponding certificate of practicing qualification in this city.

Article 10 For the personnel of high and new enterprise in high and new area who leave the country temporarily for public affairs, the foreign affairs department shall firstly handle the long-term certificate to Hong Kong and the instruction for foreign duty that is examined and approved once but effective for many times within one year.

Section 2 Financial Support

Article 11 The garden for the returned students is established in the high and new area. The municipal government provides finances to establish the initial supporting capital for the returned personnel, and arranges the capital in the funds of science and technology to financially aid the returned personnel to carry out the high and new technology fruits and project transformation, as well as conduct the research and development of high and new technology projects.

Article 12 The "Shenzhen Fictitious College Garden" is established in the high and new area. The municipal government financially supports its development and provides the office facilities and favorable conditions of science research, teaching and life for each college in the garden.

Article 13 The municipal government encourages enterprises, colleges and science research institutions to establish the enterprise administration of technology innovation or conduct the research and development of technology innovation in the high and new area, and may financially support the innovation activities.

Article 14 The municipal government encourages enterprises, colleges, science research institution and other organs or individuals to establish the career-starting service agency (the incubation machine) in the high and new area that cultivates the initial small enterprise or partnership to grow up.

The career-starting service agency (the incubation machine) may enjoy every preferential policy that this city provides to support the high and new technology industry.

Article 15 The credit guaranty agency established by the municipal government shall provide the credit security that mainly includes financing security for middle and small enterprises in the high and new area.

Section 3 Risk Investment

Article 16 Every investor in or out of the country may conduct a risk investment in the high and new area. It is encouraged that the initial capital be used to establish the risk investment organ in the high and new area.

Article 17 The risk investment organ may be established in the form of limited partnership.

The partners of limited partnerships shall consist of limited partners and general partnership. If the investor is a limited partner, he shall bear limited liability with no more than his subscribed capital; If the investor is a general partner, he shall bear unlimited liability.

The partners of limited partnerships shall conclude a written contract. The partner shall agree on the proportion of the subscribed capital, distribution relationship, competence of operation and management as well as other relationship of rights and obligations in the contract.

The administrative measures of registration of limited partnership shall be prescribed by the municipal government separately.

Article 18 The risk investment organ, whose investment amount to the high and new technology enterprise has reached some proportion of its total investment amount, may enjoy the preferential policy that the municipal government provides to support the high and new technology industry. The concrete proportion shall be prescribed by the municipal government.

Article 19 The municipal government encourages the risk investment organ to invest in the enterprise or project with high content of science and technology and development prospect, which is in the initial stage.

Article 20 The risk investment organ may retract the risk investment by merger and acquisitions of enterprises, purchasing back of stock right, listing securities in the securities market or other ways.

Article 21 Enterprises in high and new area are encouraged to conduct investment, financing, operation, research and development, as well as interchange and cooperation of international economy, technology and talents out of the country.

Section 4 Programme and Construction

Article 22 The municipal govetnment shall make a programme for the construction and development of high and new area as well as its industry belt according to the whole programme of Shenzhen City and the development demands as well as the actual circumstance of high and new area.

The land area of public facilities to be used in high and new area shall reach more than 30 percent of total area of high and new area. The green land area shall reach more than 10 percent of total area of high and new area.

The land of enterprises or projects to be used in high and new area shall accord with the provisions in Article 33 of these regulations.

Article 23 The outside environment in high and new area shall be planned and carried out by the administrative department in high and new area.

The administrative department in high and new area shall conduct an initial examination for enterprises' outside advertisements and marks in high and new area. After being approved, the enterprises shall handle the formalities according to relevant provisions of the municipal government.

Article 24 The municipal government shall carry out the assigning system of the right to the use of state ¨Cowned land and the leasing system of stated-owned land for the high and new technology enterprise or project in high and new area, and shall conduct a transition from the assigning system to the leasing system. The concrete measures to be implemented shall be prescribed by the municipal government separately.

Article 25 The administrative department in high and new area shall provide low-profit factory building for middle and small enterprises in high and new area.

Article 26 The administrative department in high and new area shall conduct an initial examination for enterprises or projects that apply for the right to the use of land in high and new area. The administrative department in high and new area shall issue the initial examining opinion about the location and area of use of the land for enterprises or projects' application within 10 working days, and shall report it to the leading department in high and new area for approval.

The applicant shall apply to the administrative department of State-owned land planning of the municipal government for the use of land with the initial opinion, which is issued by the administrative department in high and new area and approved by the leading department in high and new area.

The administrative department of State-owned land planning of the municipal government shall conduct an examination and approval over the application and finish the assigning contract of the right to the use of land within 15 working days, and shall tell the conditions of registration of real estate to the administrative department in high and new area in writing within 7 working days upon finishing the formalities.

If the right to the use of State-owned land is assigned through an agreement, the assigning money of the right to the use of land may be reduced or exempted according to law.

Article 27 If the user of the land invests no more than 25 percent of total investment amount to the building one year later from the date upon concluding the contract, the administrative department of State-owned land planning of the municipal government shall rescind the assigning conduct, turn the original amount of money of the land, and deal with the building and its attachment on the land according to law.

Article 28 If the user of the land doesn' t complete the project according to the prescribed date in the contract and exceeds the time limit for one year, the administrate department of State-owned land planning of the municipal government shall rescind the assigning conduct, turn the original amount of money of the land, and deal with the building and its attachment on the land according to law.

Article 29 It is prohibited to transfer the land and the building on it which is assigned through an agreement and whose assigning money of the right to use is reduced or exempted.

If it is necessary to transfer the land for the conditions of bankruptcy, cleaning or moving out of the high and new area voluntarily or compulsorily, the transferring price of the land shall not be high than the price of original assigning contract, and the transferring price of the building shall not be higher than depreciation price.

The assignee that transfers the land or building according to the second paragraph in this article shall accord with the qualification of entering the area prescribed in the first paragraph of Article 33 of these regulations.

Article 30 If enterprises acquire the right to the use of the land through non-agreements ways (such as auction or bidding), the real estate may be transferred and leased. But the assignee and the leasee shall accord with the qualification of entering the area prescribed in the first paragraph of Article 33 of these regulations.

 Article 31 The municipal government shall provide a complete sets of low-rent housing for the high an new technology enterprise in high an new area.

The administrative department in high and new area shall raise the demands of structure proportion and function of the housing to the relevant administrative departments according to the need of enterprise.

Article 32 The distribution application of a complete sets of housing shall be submitted by enterprises. After the administrative department of high and new area has examined and approved the application, the owner of title shall sign the leasing contract with the enterprise that applies for houses.

The complete sets of housing in high and new area shall be leased to the high and new technology enterprises or projects in the high and new area, and shall not be sold or subleased.

Chapter ¢ó Entering and Moving Out

Article 33 Enterprises or projects entering high and new area, which need to apply for the land or factory houses in high and mew area, shall accord with the development programme of industry in high and new area, have corresponding capital security and have one of the following conditions:

(1) being the high and new technology enterprise or project determined by the administrative department of science and technology of the municipal government;

(2) being the famous high and new technology enterprise inland or abroad;

(3) being the enterprise or agency that provide a complete sets of service for the high and new technology enterprise in high and new area.

The organ or individual having not been prescribed in the preceding paragraph of this article, which or who applies to enter high and new area, shall conduct the research and development, production and operation as well as technological services of products within the list range of products with high and new technology.

Article 34 Enterprises or projects, which apply to enter high and new area, shall submit the following materials to the administrative department in high and new area:

(1) the application that enterprises or projects enter high and new area;

(2) the feasibility report of enterprises;

(3) the original and copy of the business license of enterprises or the notification of pre-approval of enterprises' name;

(4) the relevant decisions, constitution and contracts made by the board of directors or the shareholders' meeting of enterprises.

Enterprise or projects, which need to apply to high and new area for the land or factory houses, shall submit the corresponding certification documents prescribed in the first paragraph of Article 33 of these regulations except the materials prescribed in the preceding paragraph of this article.

Article 35 The registered capital of high and new technology enterprise in high and new area may be paid by installments according to the investors' agreements.

Article 36 If the high and new technology enterprise in high and new area invests with the evaluated high and new technology achievements, the investment proportion may be agreed on by all investors. But if it invests with the State-owned assets, the investment proportion shall accord with the provisions about State-owned assets administration of the State.

Article 37 The administrative department in high and new area shall make a decision of allowing, not allowing or deferring entering the area within 5 working days upon the date of accepting the application.

For the applicant that is not allowed or deferred to enter the area, the administrative department of industry and commerce of the municipal government shall not accept his registration application for entering the high and new area.

Article 38 The high and new technology enterprise in high and new area may carry out a system under which the stock option, technology management and other intellectual resources participate in the distribution of income.

Article 39 The enterprise, which needs to prolong the operation period with the expiration of the operation period, shall apply to the administrative department in high and new area for an examination of qualification for entering the area again within 60 days before the expiring date of operation period.

Article 40 The administrative department, which participates in the joint examination for determining a project invested by the foreign merchant having entered the area, may exercise the veto power with one vote.

Section 2 Moving Out

Article 41 If enterprises or projects have one of the following conditions, they shall move out of the high and new area:

(1) The qualification of enterprise or project is canceled by the administrative department of science and technology of the municipal government;

(2) The enterprise, whose operation period expired, fails to pass the reexamination conducted by the administrative department in high and new area or apply for the qualification for entering the area again beyond the time limit;

(3) The enterprise or project has been established in high and new area, but doesn' t accord with the provisions in Article 33 of these regulations.

Article 42 Procedures moving out of high and new area are:

(1) The enterprise, which has the conditions in paragraph (1) or (2) of Article 41 of these regulations, may apply to the administrative department in high and new area for a deferment to move out, and the longest delay period is 2 years. If the enterprise accords with the conditions within the delay period, it may resume the qualification for entering the area. If the enterprise doesn' t apply to move out with a deferment or fails to acquire the qualification for entering the area again with the expiration of deferment period, it shall move out of high and new area within 3 months from the date when the administrative department in high and new area serves the notice of moving out.

(2) For the enterprise that is established in high and new area but fails to accord with the provision in Article 33 of these regulations, the administrative department in high and new area shall issue the notice of rectification, and the rectification time limit is 3 years, If the enterprise fails to accord with the qualification for entering the area with the expiration of rectification time limit, it shall move out of the high and new area within 3 months from the date when the rectification time limit expires.

Chapter ¢ô Administrative System and Norms of Conduct for Government

Section 1 Administrative System

Article 43 The municipal government establishes the leading department and administrative department in high and new area, which administrates relevant affairs in high and new area.

Article 44 The leading department in high and new area consists of the persons mainly liable in the municipal government and those in charge of relevant administrative departments in the municipal government, whose powers and duties are:

(1) liable to enact the strategy, guideline and policy of development for the construction of high and new area;

(2) examining the development programme and annual capital plan of high and new area;

(3) examining the use of land of enterprises or projects in high and new area;

(4) harmonizing and resolving great problems in the development, construction and administration of high and new area.

Article 45 The administrative department in high and new area is the working body of the leading department in high and new department and the agency of the municipal government, whose powers and duties are:

(1) organizing to enact the general and industry programme of high and are; participating in enacting the subarea programme of high and new area, the lower-level city planning, the programme of information construction and the special programme of environmental protection.

(2) liable to examine and approve enterprises or projects having entered high and new area;

(3) liable to conduct an initial examination over the use of land (including the location and area of land) in high and new area;

(4) liable to manage and use the capital that the municipal government interests to high and new area through the administrative department in high and new area;

(5) liable to examine and approve the distribution of a complete sets of housing that the municipal government provides for high and new area;

(6) liable for relevant statistics work of high and new area;

(7) liable to conduct an initial examination over the installation of advertisement and representations outdoors of high and new area;

(8) other affairs entrusted by the municipal government.

Section 2 Norms for Governmental Conducts

Article 46 The administrative department in high and new area and the relevant administrative department of the municipal government shall provide convenient services with high quality and efficiency for high and new technology enterprises in high and new area, and shall establish a principle that the affairs of high and new technology enterprises in high and new area shall be handled with a priority.

The relevant administrative department of the municipal government may establish windows for doing office work in high and new area, and the administrative department in high and new area shall create conditions for it.

Article 47 The administrative department in high and new area and relevant administrative departments of the municipal government shall administer according to law, make public relevant government affairs, service promises and information of high and new area.

Article 48 The relevant administrative departments of the municipal government shall simplify the procedures of administrative examination and approval. The conditions, standards, time limit and procedures of relevant administrative examination and approval shall be opened.

Article 49 The administrative department of industry and commence, tax as well as labor may remit the examination over affairs (such as annual examination) of high and new technology enterprises in high and new area according to enterprises' credit.

Article 50 The municipal government carries out the hearing system for the great decision of high and new area. For the great decision affairs about the reform and development of high and new area involving the interests of organizations and individuals in high and new area, the decision department shall hold a hearing.

For the rules formulated by the municipal government and the regulatory documents formulated by relevant administrative departments, if the affairs of administrative examination and approval, administrative penalty as well as compulsory measure involve organizations and individuals in high and new area, the formulator shall hold a hearing.

Article 51 The administrative department in high and new area and relevant administrative departments of the municipal government shall provide convenience for the complete sets of services of risk investment, finance, telecom, post, transportation, electricity supply, water supply, equipment lease and intermediary that enterprises in high and new area bring in.

Chapter ¢õ Legal Liability

Article 52 If these regulations are violated, the administrative department in high and new area shall put forward a proposal of administrative penalty to relevant administrative departments of the municipal government; The municipal government shall adopt the proposal unless it has proper reasons.

Article 53 If enterprises or individuals in high and new area alter the use of land in high and new area illegally or transfer and lease the real estate in high and new area illegally, the administrative department of State-owned land planning of the municipal department shall penalize them according to relevant provisions of regulations, such as "Regulations of Shenzhen Special Economic Zone on Assigning the Right to the Use of Land" .

Article 54 If enterprises or individuals violate provisions of Article 42 of these regulations and refuse to move out of high and new area, the administrative department in high and new area may apply to the people' s court for compulsory execution.

Article 55 If relevant administrative departments or their working personnel have one of the following conditions, the administrative department at higher levels hall order them to make corrections; If the circumstances are serious, the administrative supervisory department or the administrative department at higher levels shall impose administrative responsibility on the people directly or mainly liable; If a crime is constituted, he shall be prosecuted for criminal responsibility:

(1) Enterprises' lawful rights and interests, which shall be protected according to relevant laws and regulations, are infringed upon because relevant administrative departments and their working personnel fails to perform their duties according to law;

(2) The rights that enterprises shall enjoy according to provisions of these regulations fails to be enjoyed because relevant administrative departments and their working personnel don' t handle affairs according to law.

Article 56 If the administrative department in high and new area, relevant administrative departments of the municipal government and their working personnel have one of the following conditions, relevant departments shall impose administrative responsibility on the people directly and mainly liable according to law; If the circumstances are serious and a crime is constituted, the people in charge shall be prosecuted for criminal responsibility:

(1) infringing upon the lawful rights and interests of enterprises and individuals in high and new area;

(2) abusing powers or exceeding legal powers to examine and approve the qualification for entering the area, the right to the use of land, the matching housing and advertisements as well as representations outdoors of high and new area;

(3) taking advantage of his position and power to practise favoritism for illegal interests.

Article 57 If the parties are dissatisfied with the specific administrative acts of the administrative department in high and new area and relevant administrative departments of the municipal government, they may apply for reconsideration or file an administrative lawsuit at the people' s court according to law.

Chapter ¢ö Supplementary Provision

Article 58 The municipal government shall formulate the matching implementing rules in accordance with these regulations.

Article 59 If the regulations in Special Zone promulgated before these regulations are carried out go against relevant provisions of these regulations, provisions of these regulation shall be more effective.

Article 60 These regulations shall take effect as of May 1, 2001, and "Administrative Measures of Shenzhen Special Economic Zone on High and New Technology Industry Area" promulgated by the municipal government on August 26, 1998 shall be repealed at the same time.