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Document of Suzhou Municipal Government

( 2003)No.169
Oct.21st, 2003
Several Opinions on Promoting the Development of Software Industry
By Administrative Office of Suzhou Municipal Government

¡¡To all county-level and district governments, Suzhou Industrial Park and Suzhou New District Administrative Committee; All committees, administrative offices and bureaus (companies) and all affiliated organs:

¡¡In order to fully implement the spirit of? Notification on Several Policies of the State Council in Encouraging the Development of Software Industry and Integrated Circuit Industry (GuoFa (2000)No.18) and Guidelines on Prospering the Software Industry (GuoBanFa(2002)No.47), encourage technical innovation of software enterprises, enhance the market competitiveness, explore domestic and international markets by taking advantage of export-oriented economy in Suzhou, we strive for turning Suzhou into the main development base, manufacturing base and export base in China within 5 to 10 years, characterized with several renounced software brands, a bunch of key software enterprises, a software industry system with Intellectual Property Rights and with R&D and production capacity reaching or approaching advanced international standards. In accordance with the above-mentioned objectives, we hereby constitute the following opinions:

¡¡Article 1 Accelerate the pace of constructing Suzhou Software Park and attract more software enterprises to settle down. According to the general planning of ¡°One Park, Multiple Districts¡±, we selectively support the construction of public platform and service system of Suzhou Industrial Park Software Park, Suzhou New District Software Park and Kunshan Software Park; supply professional services such as shared technology, human talents cultivation and quality guarantee system.
Article 2 Increase the investment for software industry by taking full advantage of multi-channel financing methods such as venture fund. Establish venture investment mechanism for software industry and encourage venture investment in software industry.

¡¡Article 3 Establish Special Fund for Suzhou Software Industry Development to support the development of software industry. Within 5 years¡¯ time since 2004, certain amount of fund shall annually be arranged from budgets at all levels, for the purposes of supporting the construction of software park, public platform and service support system, introducing and cultivating human talents, various allowances for developers, etc. The special fund will be administrated by both science and technology department and financial department at the same level, based on principles of software enterprises dependent territory.

¡¡Article 4 Encourage and support domestic and international enterprises, research institutes and colleges to come to Suzhou for establishing software research and development centre, which would be funded by Special Fund for Software Industry Development and enjoy relevant preferential policies equivalent to software enterprises.

¡¡Article 5 Encourage software enterprises to launch international authentications such as GB/T19000-ISO9000 quality guarantee system or CMM authentication. Enterprises that pass the authentication shall be subsidized 50% of the authentication fee by Special Fund for Software Industry Development.

¡¡Article 6 Encourage software enterprises to actively apply for cognizance of software products and software enterprises. Software products and software enterprises through cognizance shall be subsidized 10,000RMB and 20,000RMB one-time respectively.

¡¡Article 7 Software enterprises may self-determine the total amount and standard of wages according to the relevant laws and regulations as well as the economic benefits and average of social wages.? Wages and training fee of software enterprises personnel shall be deducted according to actual amount when calculating tax amount payable. The measure of ¡°More Tax Paid, More Bonus¡± shall be applied toward the personal income tax of software developers. The bonus shall be rewarded according to certain ratio of annual individual income tax paid by the enterprises and it is also disbursed from the Special Fund for Software Industry Development.

¡¡Article 8 Enterprises are encouraged to give bounteous award to outstanding scientific and technological personnel. Software enterprises shall allow the conversion of patent technology and scientific achievements into shares, and give the shares to innovators and contributors. Enterprises with software sales exceeding 50 million RMB or 0.1 billion RMB shall be rewarded 500,000RMB and 1 million RMB respectively by Special Fund for Software Industry Development.
Article 9 Software enterprises established by scientific and technological personnel from domestic institutions of higher learning and scientific research institutes shall be funded by Special Fund for Software Industry Development. Software enterprises established in Suzhou by overseas students, foreign nationalities and Hong Kong, Macao, Taiwan citizens shall enjoy various preferential policies for software enterprises.

¡¡Article 10 Software products (including embedded software product) developed by Ordinary Value-Added Tax Payer on his own initiative shall be levied value-added tax at the rate of 17% as required by law. The actual tax paid which exceeds 3% shall be refunded upon levy and shall be used in software research and development and increasing production scale. It shall not be utilized as enterprise income tax.

¡¡Article 11 Newly established companies, after assessment, the enterprise income tax will be exemptible for the first two years and half rate reduction for the following three years from the beginning of payoff.? High Tech Enterprises qualified by provincial cognizance shall continue to enjoy preferential policy of enterprise income tax on High Tech Enterprise. Key software production enterprises in the government planning who have not enjoyed preferential policy shall have the enterprise income tax levied at the rate reduced by 10%.

¡¡Article 12 Software Enterprises with technical developing fee increasing by 10% or more compared with the former year shall enjoy tax countervail by the credit of 50% of the actual amount after approved by tax authorities.

¡¡Article 13 With regard to imported equipments and imported technology (including software), accessories and spare parts attached with the equipments as contracted, customs duty and import tax shall be exempted, except those listed in Category of Non-Duty-Free Commodities to be Imported for Foreign-funded Projects and Category of Non-Duty-Free Commodities to be Imported for Domestic-funded Projects.

¡¡Article 14 If software acquisition cost of software procured alone by enterprises or institutions reaches certain standard for fixed assets or composes invisible assets, then it may be calculated as fixed assets or invisible assets. Its depreciation or amortization period can be appropriately shortened to a minimum of 2 years after approved by tax departments.

¡¡Article 15 Accelerate the pace constructing Suzhou Postgraduate City and International Education Park, encourage all kinds of software training centers launched by social resources, establish software technical training college for cultivating different levels of software human talents so as to enhance the quality of Suzhou software talents.

¡¡Article 16 Establish ¡°Green Channel¡± for software export. Departments such as Customs, Entry-Exit Inspection Quarantine Bureaus shall provide convenience for export software and software outsourcing business to go through the customs. Software enterprises enjoy fast special counter service in the process of the collection, verification and writing-off of export proceeds in foreign exchange.

¡¡Article 17 With regard to software system analysts, system engineers or persons with professional ability and persons with management ability urgently required by software enterprises, they and their family members enjoy free ingoing of domicile, and their children have priority to enter schools and nurseries within certain districts. ¡¡

¡¡Article 18 Encourage software enterprises to launch international cooperation and exchange actively. Simplify the entry-exit examination and approval procedure for intermediate and high level management personnel and technical personnel.

¡¡Article 19 Encourage government organizations, enterprises and institutions to procure local software products of high quality. High quality software products shall be listed in the government procurement categories. Municipal major projects and application systems shall be undertaken by municipal software enterprises in priority. Under the condition of equal price and capacity, local software system shall be adopted in priority.

¡¡Article 20 Relevant government departments shall tighten measures against software smuggling and pirating crimes, strictly investigate and prosecute the activities of pirate software manufacturing and distribution.

¡¡Article 21 Software enterprises and software products involved in this document shall go through cognizance and annual verification system shall be applied according to relevant rules. Enterprises that failed in the annual verification shall have the software enterprises qualification cancelled and no longer enjoy the relevant preferential policies addressed in this document.

¡¡Article 22 IC project enterprises are regarded as software enterprises and enjoy equally the relevant preferential policies addressed in this document.

¡¡Article 23 Software enterprises involved in this document refer to those registered locally, regardless of the nature of ownerships.

¡¡Article 24 Suzhou Science and Technology Bureau is responsible for the explanation of this document.

¡¡Article 25 This document shall be implemented from the date of issue.

¡¡Key Words: ?Software, Industry, Development, Opinion


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