Policies and tax incentives

The governmental support, to local and foreign business, in the PRD region is very strong. One of the companies which we visited -China South International Industrial Materials City- reflects the strong governmental support. Firstly, the electricity and utility bills in this material city is lower compared to in Hongkong. The government gives assistance to local enterprises. Telephone calls in this area is cheaper than in other places. There is also free parking in the material city. All these governmental incentives will help to attract foreign investors to this area. In Guangzhou, motorcycles were banned so as to prevent motorcycle-burglaries from occurring. A safe and peaceful environment is what will attract foreign investors.

Tax charges are generally cheaper in the PRD region compared to the other parts of China. Based on what Mr Neo, Regional Director for Southern China (IE Singapore), described to us, the laws are very flexible in the PRD region. The taxation policies can be negotiated with the respective governmental authorities, one does not need to stick to law. For example, perhaps a certain amount of screws exported will be taxed accordingly. However, in the PRD, one can negotiate for a less rigid tax paying policy (a fixed amount of tax for any amount of screws exported). Note: One must establish a name for his/her company first!