"High Tech Certificate": the strategy to be competitive in China Go back »

2012-09-04 | Nanjing

Background

China identifies itself as the world’s innovation center. The core of China’s national development strategy is to enhance China’s capacity for independent innovation and make China an innovative country.

According to the 12^th Year plan China will transform its economy from simple OEM ("Original Equipment Manufacturer") assembly to higher, value-added manufacturing activities.

The Chinese government has enhanced its encouragement of domestic and foreign investment in advanced technologies, and has created a series of preferential tax and other policies to stimulate and promote the production of high-tech products and technology transfers into China and conferring “high-tech” status. The competition to attract investment by FIEs became so intense at the provincial, district, city and special economic zone levels.

The Definition

The term “high and new tech enterprises” refers to the resident enterprises that have been registered for one year or longer within China (excluding Hong Kong, Macao and Taiwan regions), have incessantly devoted to the research and development as well as transformation of technological achievements in industries stipulated in State Supported High and New Tech Category issued by The Ministry of Science and Technology of the PRC, The Ministry of Finance of the.

The Applicant, products/services must fall into the catalogue of General information of State Supported High and New Tech Category, 2011. Such catalogue classified the “high-tech” status into eight categories:

1.      Electronic Information Technology;

2.      Biology and medicine;

3.      Aviation and Space Technology;

4.      New Materials;

5.      High Tech Service;

6.      New Energy and Energy Saving Technology;

7.      Resources and Environmental Technology;

8.      Traditional Industries transformed with High and New Technology

Conditions

To be qualified as a “high-tech” an enterprise must meet the following requirements:

·         The products (services) are within the range as prescribed in the High and New Tech Fields;

·         The scientific and technical personnel with an educational background of junior college or higher account for at least 30 % of the total number of employees of the enterprise, of whom the research and development personnel account for at least 10 % of the total number of employees of the enterprise;

·         The enterprise has been incessantly carrying out research and development activities for the purpose of acquiring new knowledge of science and technology (excluding human culture and social science), for innovatively employing the new knowledge of science and technology or substantially improving the technologies or products (services), and the proportion between its total research and development expenditure during the recent 3 accounting years and its total sales revenue meets the following requirements:

·         The enterprise’s revenue from high and new tech products (services) accounts for at least 60% of its total revenue during the current year; and

·         The enterprise’s level of organization and management of research and development, capacity of transformation of scientific and technological achievements, number of independent intellectual property rights (in Suzhou, for example, the authorities requires that a company hold at least 6 patents. Please consider that such reference could be subject to change) , growth in sales and total assets as well as other indicators meet other requirements set by relevant government organs.

Validity

Jiangsu Technology Development Bureau is the local authority to certify High & New Technology Certificate in Jiangsu. The high and new tech enterprise qualifications shall be valid for a period of three years as of the date of issuance of the certificate. An enterprise shall file a re-examination application 3 months prior to the expiration of the valid period.

Conclusion

Qualifying for high-tech status, and thus enjoying preferential tax and additional benefits, may be highly desirable for those companies that need to revisit their investment in China and already consumed the first preferential policy of the previous years. IP strategies as well as their technology use methodologies will be the focus for the company management of the FIEs willing to win in the challenging Chinese market.

For more information please send an email to:

c.dandrea@picozzimorigi.it, or visit our website www.picozzimorigi.cn and www.picozzimorigi.com

Disclaimer 
This publication is distributed solely for information purposes and does not constitute legal advice.
Although all the information in this document was obtained from reliable official sources, no guarantee is given with regard to their accuracy and completeness.

This document may not be reproduced and copies of this document may not be distributed without our prior permission.

Source: © 2012 Picozzi & Morigi Law Firm