[photopress:zoneshenzhen1979.gif,full,alignright]There is a site, China Unique, which tries to keep up with the situation regarding Special Economic Zones in China. It is a sort of basic primer in that it says SEZ are development zones established by the PRC to encourage foreign investment in China, bring much needed jobs, technical knowledge, and future tax revenues in return for significant tax concessions at start-up of the operations and over a number of years.
The biggest benefit to the foreign investor is significant tax concessions during the early life of the project. These rates can vary by site and are subject to change from time to time. A typical example of the PRC tax concessions offered to a manufacturing startup typically looks like:
No tax during start-up years before making a profit.
The first year that your company makes a profit starts the “Tax Clock” and is year one.
The first and second year after the tax clock starts, there is no tax.
For years three and four, there is 1/2 of the normal tax rate.
In the fifth year, the company pays the full normal tax rate.
[photopress:zone_zhuhai.jpg,full,alignleft]SEZ’s also often have spec building suitable for operations, which means a quicker start-up.
The site has a warning: CAUTION: Do not be fooled into the belief that starting up your manufacturing operation in an SEZ will either provide easy or automatically approval for domestic sales rights.