IV. Strengthening support through fiscal and taxation policies

Lin-gang Special Area will establish a fiscal and tax system conductive to the gathering of industries and talents and strengthen financial support according to the principle of "local financial resources retention and urban special support". Investment and financial channels shall be further expanded to help market objects play a role in the construction of Lin-gang Special Area to provide strong support for its development.

(16) Establishing special development funds for Lin-gang Special Area. The local income generated by Lin-gang Special Area will be used for the construction of the area. Tax revenue, land leasing revenue, infrastructure supporting fees and special funds at municipal and district levels shall be integrated to establish special development funds, which will contribute no less than 100 billion yuan ($14.3 billion) in five years to support industry, innovation and entrepreneurship, talent introduction and training, construction of infrastructure and public facilities in the area. The special development funds may be used to increase the support for research and development (R&D), innovation, technological transformation and application of new products, and reward core innovation teams in key industries. For particularly important projects, Lin-gang Special Area Administration may apply for special funds.

(17) Implementing tax support. Enterprises in Lin-gang Special Area that meet the requirements and are engaged in R&D in core projects in key areas such as integrated circuits, artificial intelligence (AI), biomedicine and civil aviation will be levied enterprise income tax at a reduced rate of 15 percent for five years from the date of establishment. According to State regulations, qualified enterprises specializing in production and design of integrated circuits and software shall enjoy preferential policies on enterprise income tax. Subsidies shall be given to overseas high-end and urgently needed talents working in the Special Area to make up the balance of individual income tax. Special tax policies shall be applied for goods entering the physical fence zone from abroad as well as for transactions of goods and services between enterprises in the physical fence zone. Lin-gang Special Area will expand the application scope of value added tax (VAT) policy for service exports in Lin-gang Special Area, study new tax policies for overseas investment and offshore business development, and explore a tax policy for pilot free trade accounts without causing tax base erosion and profit transfer.

(18) Increasing support for the issuance of government bonds in Lin-gang Special Area. The local government will further support the issuance of government bonds in the area, especially for major projects.

(19) Developing cross-border financial business according to international standards. In compliance with prevailing international rules and regulations, Lin-gang Special Area will encourage financial institutions to provide cross-border services such as bond issuance, investment mergers and acquisitions, and centralized operation of funds to enterprises and non-residents in the area on the premise of legal compliance, risks under control and sustainable business. Lin-gang Special Area will support enterprises to carry out authentic and legal offshore resale business. Financial institutions may provide efficient and convenient cross-border financial services for these enterprises.

(20) Strengthening the flexibility of cross-border funds. Funds raised abroad by enterprises in Lin-gang Special Area, funds raised abroad and income obtained from cross-border services by qualified financial institutions can be used independently for business and investment activities in Lin-gang Special Area and abroad. Qualified and honest high-quality enterprises in Lin-gang Special Area may be facilitated with foreign exchange receipts and expenditures after being recognized by the Special Area Administration.

(21) Promoting the construction of a fund management center. The entry threshold for centralized operation of cross-border funds shall be lowered, and the two-way capital pooling of cross-border funds by enterprises in Lin-gang Special Area shall be further facilitated to realize centralized management of funds.

(22) Giving full play to bank credit, insurance funds and financing guarantee funds. Lin-gang Special Area will study the support policies of providing long-term, low-interest loans to key industries and attracting insurance capital as well as policies that support interest discounts at municipal and district levels. Lin-gang Special Area will encourage innovation in financing guarantee methods, and strengthen support for small and medium-sized enterprises by municipal policy-based financing guarantee funds.

(23) Increasing the scale of direct financing for key industries. Priority will be given to support the listing of qualified enterprises in key sectors such as integrated circuits, AI, biomedicine, aerospace and new-energy vehicles. Lin-gang Special Area shall be supported to establish investment platforms for emerging industries and innovate equity investments to promote social investment in major industrial projects and start-up companies.