I. Taxation Policy

A. Enterprises engaged in the following operations are exempted from sales taxes:

1. cultivation operation by means of agricultural machinery in agriculture, forestry, and livestock farming;

2. farmland irrigation and draining operation;

3. prediction, prevention and cure of plant diseases and insect pests in agriculture, forestry, livestock

farming, and fishery;

4. operations related to agricultural mechanized farming, irrigation, draining, plant disease and insect pests prevention and cure, plant protection, and training services providing agricultural and husbandry insurance for farmers; and,

5. operations related to breeding, disease prevention and cure of livestock, poultry and aquatic lives and operations related to medicine and medical instruments provision for breeding, disease prevention and cure of livestock, poultry and aquatic lives.

B. Enterprises engaged in the following businesses are exempted from value added taxes:

1. Enterprises or individuals engaged in selling their own agricultural products, including elementary
agricultural products in the fields of planting industry, breeding industry, forestry, husbandry, and aquatic life cultivation;

2. Enterprises engaged in production and sales of such means of production as feedstuff, agricultural
plastic sheets, fertilizer, and agricultural chemicals approved by departments concerned; and,

3. Enterprises engaged in retailing of seeds, seedlings, fertilizer, agricultural chemicals, and agricultural machinery approved by departments concerned.

C. Enterprises engaged in the following businesses are exempted from income tax:

Enterprises engaged in various services for agricultural production, such as popularization of agricultural technology, plant protection, water pipeline, forestry, veterinary, aquatic products, seeds, agricultural machinery, and meteorological reports, will be temporary exempted from income tax on their technical and labor service income.

D. Enterprises registered in the Garden are entitled to the following preferential taxation policies formulated by the local government:

1. After enjoying the preferential policies stipulated by the State, foreign-funded joint enterprises can continue to apply for an incentive of a 100% refund of the income tax paid to the local finance administration for the first two years and a 50% refund of the income tax for the next three years.

2. Enterprises with an investment of RMB5 million on fixed assets and joint ventures with an investment share of over 50% on fixed assets are entitled to apply for an incentive of a 100% refund of value added tax and income tax actually levied by the local finance administration for the first three years and a 50% refund for the next six years.

II. Policies to encourage foreign investment

1. Sino-foreign joint ventures, cooperative ventures and solely foreign-funded enterprises in the Garden are entitled to the preferential treatments stipulated in Suggestions on Encouraging Foreign Investment in Shanghai’s Agriculture
1.1 Foreign agricultural enterprises with a business term of over 10 years will be exempted from income tax in the first and second years since making profits, and from half of the income tax in the third, fourth and fifth years
1.2 Having reinvested by using their profits from the existing foreign-funded agricultural enterprises with a term of over 5 years, the foreign partners the enterprises will be granted a full or partial refund of the income tax they have paid for the amount they have reinvested
1.3 Foreign enterprises investing in agriculture can apply for the city’s research projects for invigorating agriculture through science and education if they cooperate with domestic scientific research institutes and participate in Shanghai’s agriculture boosting activities concerned
1.4 Foreign investors engaged in the above-mentioned areas, upon approval by governments at the district or country level or above, can use collective land by means of paying land use fees. Hi-tech, export-oriented enterprises confirmed by the Municipal Commission of Science and Technology, the Municipal Agriculture Commission, and the Municipal Foreign Investment Commission, can reduce land use fee
1.5 Projects, whose imported excellent varieties and advanced technologies have been proved of high performance by means of regional or productive experiments, will be allowed to transfer their invisible assets into shares as stipulated by the State. Enterprises with the imported excellent varieties and advanced technologies, upon confirmation by the Municipal Commission of Agriculture and the Municipal Commission of Science and Technology, will be exempted from agricultural taxes accordingly during the period of experiment by the Tax Administration

2. enterprises investing in the above-mentioned areas will be exempt from custom duties and import value added tax incurred if they import equipment for their own production within the total amount of their investment other than those listed in A Category of Articles That Are Not Entitled to Custom Duties Exemption for Foreign Investment

3. foreign-funded enterprises investing in agricultural projects that are encouraged shall decide by themselves the proportion of products to be sold domestically or internationally on condition of balanced foreign exchanges of their own

4. Chinese and foreign technology development organizations registered in the Garden can be provided with headquarters offices and core laboratories for zero rent by the Agricultural Garden Development Co., Ltd. Support will be offered to them to acquire land for modern agricultural research and development by means of renting.

III. Policies to Encourage the Development of the Garden

1. Enterprises engaged in the translation of new and high agricultural technological advances into productive forces are entitled to the preferential policies stipulated in Some Regulations on Promoting New and High Technological advances into Productive Forces, Shanghai (55th document issued by the Municipal Government of Shanghai in the year 2000).

(1) Enterprises with confirmed projects of translating new and high agricultural technological advances into productive forces are entitled to a refund of the land use fees paid for the project land, land transfer fees for three years since confirmation. They will also be exempted from purchasing commission charges and registration fees of house property for production and business. Part of the house property tax will be refunded by the government by means of subsidy. Water fees, gas fees and power supply and distribution fees incurred in the process of construction will also be exempted.

(2) Enterprises with confirmed projects of translating new and high agricultural technological advances into productive forces will be supported by a special fund in terms of their sales tax, income tax, and value added tax levied by the local government for three years since confirmation. The support fund will be halved for the next two years.

(3) Enterprises with confirmed projects of independent intellectual property rights and translation of new and high agricultural technological advances into productive forces will be supported by a special fund in terms of their sales tax, income tax, and value added tax levied by the local government for five years since confirmation. The support fund will be halved for the next three years.

2. Central enterprises engaged in planting industry, breeding industry, elementary processing of agricultural products exempt the income tax.

3. Domestic projects can are entitled to the preferential policies stipulated in relevant municipal suggestion (43th document issued by the Municipal Government of Shanghai in the year 2001)

4. Enterprises in the Garden engaged in agricultural products will enjoy preferential electricity charges (as stipulated in the 030 document issued by the Shanghai Pricing Bureau in the year 2002)

5. Enterprises responsible for the construction can obtain the land use right of the state-owned land specified for construction use in the Garden by means of transfer and can apply for property right certificates.

IV. Transfer of Land Use Right, Land and Equipment Lease

1. Price for land use right transfer is RMB120 thousand per mu;

2. Land lease fee is RMB400-600 per mu per year (including such infrastructure as ditches, trenches, roads, and land with simply equipped sheds);

3. Renting homemade large sheds and lease fee is RMB 6000-8000 per mu per year.

4. Central enterprises in the Garden will enjoy preferential land lease fee.

V. Power and Water Supply Preferential Policies to Enterprises Registered in the Garden

A. Enterprises in the Garden engaged in planting industry, breeding industry, elementary processing of agricultural products will enjoy preferential electricity charges (as stipulated in the 030 document issued by the Shanghai Pricing Bureau in the year 2002);

B. Enterprises in the Garden engaged in planting industry, breeding industry, elementary processing of agricultural products will be provided with preferential treatment in water charges.

VI. Enterprises registered in the Garden will be provided with assistance in distribution channels if they want to sell their products in the Nonggongshang Supermarket.

A new round of tender and investment invitation

1. mass-production of soil-less cultivation of lawns

2. mass-production and sales of seedlings

3. export-oriented processing of flower seed cultivation

4. production and sales of high-efficiency

5. pollution-free agricultural bio-chemicals

6. production and sales of color tree species

7. research and production of greenhouse automatic control systems

8. production of new and multifunctional agricultural plastic sheets and insulating and breathable cover sheets

9. fine processing of edible fungi products, projects of export and processing of vegetables

10. production bases of organic vegetables

11. incubation bases of new and high agricultural technology

12. agricultural leisure projects integrating popular agricultural science, education, tour and sightseeing

13. projects of processing of agricultural products and food

14. cultivation of tomatoes with functions of blood coagulation

15. cultivation of tomatoes with functions of blood pressure reduction.