Three Departments, including the Ministry of Finance ("MOF"), have recently issued the Circular on Matters Concerning Expanding the Implementation Scope of the Interim Measures for Equity and Dividend Incentives of State-Owned Technological Enterprises (the "Circular"), immediately effective from the date of issuance.
The Circular provides that, scientific and technological enterprises that are invested in by all levels of unlisted "scientific and technological subsidiaries" or "enterprises institutionally transformed from research institutes", into which state-owned technology-oriented small- and medium-sized enterprises or state-controlled listed companies make contributions, will be covered under the implementation scope of these incentives. For the purpose of the inclusion of above-said enterprises in the implementation scope, Article 2 of the Interim Measures for Equity and Dividend Incentives of State-Owned Technological Enterprises is rewritten accordingly to read: for the purpose of these Measures, state-owned technology-oriented enterprises refer to unlisted state-owned or state-controlled technology-oriented enterprises, with the legal personality within the territory of China (including all levels of unlisted scientific and technological subsidiaries, into which State-owned enterprises listed on the National Equities Exchange and Quotations or State-controlled listed companies make capital contributions), specifically including five types of enterprises, such as "high-tech firms recognized by the State". Furthermore, the Circular states that, high-tech firms recognized by the State will no longer be subject to any criteria in respect of research and development expenses and research and development staff members.