Shanghai to Stimulate the Development of the Bio-Pharmaceutical Industry
On July 30, 2009, the Shanghai Municipal Government
released Several Provisions on Encouraging the Development of the
Bio-Pharmaceutical Industry in Shanghai (the "Provisions"), effective the
promulgation date. The Provisions
stipulate that enterprises and institutions registered in Shanghai that engage
in the R&D, production, sale and outsourcing of bio-products, chemical
pharmaceuticals, medical apparatus, and medical materials, etc., could
become entitled to certain financial support, tax benefits and other favorable
treatment. According to the Provisions,
a qualified high-tech bio-pharmaceutical project could receive financial
support of up to 10% of the total investment of such project, and certain other
critical R&D projects could be entitled to financial support of up to 30%
of the total investment of the project. High-tech enterprises and service
enterprises with advanced technologies could enjoy a preferential enterprise
income tax ("EIT") rate of 15%. The
income of a bio-pharmaceutical enterprise derived from technology transfer,
technology development or technical consultation service is exempted of
business tax, and the first RMB 5 million of income from a qualified technology
transfer is exempted of EIT. Incomes
from other non-specified businesses could enjoy 50% off the regular EIT. Other types of assistance such as banking,
capital market, public purchase, and market entry services will also be made
available to bio-pharmaceutical organizations pursuant to the Provisions, with
the goal to encourage the development of the bio-pharmaceutical industry.
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