Provisions of Shanghai Municipality on Promoting the Transformation of New and H

　　In order to implement the "Law of the People's Republic of China on Promoting the Transformation of Scientific and Technological Achievements" and the "Action Program of Shanghai for Revitalizing the City Through Science and Education", accelerate the transformation of new and high-tech achievements in this Municipality, actively cultivate new industries, optimize the structure of the new and high-tech industry and form a new and high-tech industry chain, these Provisions are formulated.

　　1. The Municipal People's Government shall publish a "Guidance Catalogue of High-tech Industries and Technologies in Shanghai". Any legal person or natural person may, in accordance with the Guidance Catalogue published by the Municipal People's Government, apply for the accreditation of the transformation projects of new and high-tech achievements and of new and high-tech enterprises.

　　Relevant departments of the Municipal People's Government shall jointly establish a "one-stop" service window at the Shanghai Service Center for Transformation of New and High-tech Achievements to provide the service for policy consultation, and to coordinate settlement of the difficult problems that may arise in the process of the transformation of new and high-tech achievements and of the development of new and high-tech enterprises.

　　2. This Municipality practices the accreditation system for the transformation projects of new and high-tech achievements. The Shanghai Service Center for Transformation of New and High-tech Achievements shall accept and handle, and be responsible for organizing the accreditation of the transformation projects of new and high-tech achievements all the year round. With regard to the accredited projects of software, integrated circuit and innovative medicine, all scientific research projects listed in the National 863 Plan, and the projects that have won the financing from the fund for technological innovation by small and medium-sized enterprises of scientific and technological type, the accreditation procedures for transformation of achievements shall be simplified.

　　Where the transformation contents of an accredited transformation project of new and high-tech achievements are found to run counter to the application of the project seriously or the transformation has not been implemented within a prescribed period of time, such project shall be deprived of its accreditation qualification and be stopped from continuing to enjoy relevant preferential policy treatment.

　　3. This Municipality practices the accreditation system for new and high-tech enterprises. The Shanghai Municipal Office for Accreditation of New and High-tech Enterprises shall accept and handle, and be responsible for organizing the accreditation of new and high-tech enterprises in this Municipality all the year round. With regard to the accredited enterprises of software or integrated circuit, the accreditation procedures shall be simplified. The accredited new and high-tech enterprises may enjoy relevant preferential policy as prescribed. New and high-tech enterprises shall be encouraged to converge at the national high-tech industry development zone.

　　4. All kinds of enterprises and institutions, particularly institutions of higher learning, scientific research institutes and state-owned enterprises and institutions shall carry out in various ways the practice of the technological and managerial factors participating in the distribution of income. With regard to the transformation of job-related achievements, the parties concerned may agree on the stock right, yields or rewards due to the persons who made the achievements, according to the mode of transformation.

　　If new and high-tech achievements are invested as stocks in the transformation project, the person who made the achievements may be entitled to no less than 20% of the stocks corresponding to the investment.

　　If the new and high-tech achievement is transferred to others for transformation, the person who made the achievements may be entitled to no less than 20% of the after-tax income from the transfer.

　　Where the tranformation of an achievement is carried out by an enterprise or institution itself or in cooperation with others, the enterprise or institution may, within 3 to 5 years upon the project making a profit, draw every year no less than 5% of the after-tax profit realized from the transformation to reward the person who made the achievement; with regard to an achievement independently developed by an enterprise that does not belong to its mainline business areas, the enterprise may, within 3 to 5 years upon the project making a profit, draw every year 10% of the after-tax profit realized from the transformation to reward the person who made the achievement.

　　Scientific and technological personnel in institutions of higher leaning, scientific research institutes, and state-owned enterprises and institutions may, when coming up against difficulties in carrying out the practice of the technological and managerial factors participating in the distribution of income, consult or make complaints to the Shanghai Service Center for Transformation of New and High-tech Achievements.

　　5. If a new and high-tech achievement is invested as intangible property in a transformation project, its value as intangible property may account for up to 35% of the registered capital. If the parties to the cooperation have agreed on the percentage otherwise, such agreement shall prevail.

　　When new and high-tech achievements are invested as intangible property, their value shall be assessed by a qualified assessment agency, or may be approved through consultation by the investors, who agree to bear joint and several liabilities. The enterprise shall go through the capital verification formalities on the strength of the assessment report issued by the assessment agency or the agreement made by the investors on bearing joint and several liabilities.

　　Institutions of higher learning and scientific research institutes with corporate capacity may establish foreign-invested new and high-tech enterprises in cooperation with foreign investors.

　　Domestic scientific research personnel who have worked in a foreign-invested new and high-tech enterprise for over one year are allowed to become Chinese investors in that enterprise. A foreign-invested high-tech enterprise may practice the mode of sub-contracting the processing or production of its R&D products, and shall be allowed to lease its own products.

　　6. When an accredited new and high-tech enterprise （solely state-owned） is carrying out the transformation of the ownership, the enterprise may, upon approval of the investors, use no more than 35% of the past 3 years' added value from the state-owned net assets （not including the added value from the real estate） as stocks to reward the personnel who made contribution to the enterprise, particularly scientific and technological and managerial personnel.

　　A high-tech enterprise, or an enterprise engaged in a transformation project of new and high-tech achievements may reward scientific and technological and managerial personnel in such forms as share option, stock option or technological dividends. The person enjoying technological dividends may use the technological dividends as investment to buy the stocks of the enterprise and go through the registration formalities for stock right according to law.

　　7. Enterprises are encouraged to boost the input into technological development. The expenses for technological development （including the expenses for the designing of new products, formulation of technological procedures, modulation of equipment, patent and technological data retrieval specially used for research activities, and the scientific research and trial manufacture entrusted to other units, and other expenses related to the trial manufacture and technological research of new products） incurred by an enterprise in the current year may be listed in expenditure according to reality; where those expenses actually increase more than 10% over the previous year, 50% of the expenses actually incurred in technological development may again be deducted from the taxable income for the current year. The expenses incurred by the enterprise in the purchase of the special-purpose or key installations and testing instruments for trial manufacture that are specially needed for the development of a new technology or for the research and manufacture of a new product may be included in the cost in one lump-sum or in installments. The revenues from technological transfer or technological development and the related technological consultation or service shall be exempted from business tax.

　　The expenses for technological development actually incurred by the industrial group with the support mainly from the state assets shall be not less than 1% to 3% of the sales income in the current year.

　　8. An accredited transformation project of new and high-tech achievements of the enterprise registered in this Municipality shall, according to the condition of fulfilling comprehensive economic index and the specific nature of intellectual property of the project, be given support for its special research and development from the special financial fund within a certain period of time upon accreditation. The government shall, refund the land-use fees and the rents for leasing land for the transformation project of new and high-tech achivements within three years upon the accreditation of realization of manufacture or trial manufacture by the Shanghai Service Center for Transformation of New and High-tech Achievements. The transaction fees for purchasing housing for production or business and the property rights registration fees shall be exempted. In case the land use nature is changed or the land is not used for the transformation project of new and high-tech achivements, the amount granted in the preferential treatment enjoyed by the enterprise shall be returned in full.