编者按：2007年4月，本所与全省发行的英文杂志IN TOUCH(月刊)建立合作关系，由国际经贸法律部负责编写英文稿件，结合外国人、外国企业关心的常见法律事务，分“住在杭州”、“行在杭州”、 “创业在杭州”、“生活在杭州”等版块，在2007年5月至2008年4 月的每期杂志上刊登一个版面的文章。本所还担任了该刊物的姐妹报纸HANGZHOU WEEKLY的常年法律顾问。以下是本所刊登在IN TOUCH 杂志2007年12月、2008年4月的稿件

　　　　　　　　Influences of the New Enterprise Income Tax Law over FIEs
　　On March 16, 2007, the National People’s Congress of China adopted a new Enterprise Income Tax Law which will be effective from the first day of the following year. At that time, the bifurcated Chinese tax codes respectively applied to the foreign-invested enterprises/ foreign enterprises (FIEs/FEs) and domestic-invested enterprises (DEs) will be repealed.
　　What does the new law mean to FIEs and FEs, challenges or opportunities?
　　For FIEs, the new law closes the era of ultra national treatment for foreign investments in China and creates a level playing field for foreign and domestic enterprises in terms of enterprise income tax. For FEs established under the laws of another country but with “de facto” management bodies located within the territory of China, as the new law re-defines the meaning of “resident enterprise”, enterprise income tax shall be levied in China before the profits reaped abroad going to the pockets of the shareholders.
　　The influences are also in the following aspects:
　　a. Tax rate
　　The new law imposes a uniform tax rate of 25% on both FIEs and DEs, which relieves the income tax burden for DEs but for FIEs, the preference is diminished to a large extent. However, the new tax rate is still at a middle or even low level compared to other countries the world.
　　b. Deduction of taxable income
　　Under the current law, 50% of the research and development expenditure may be deducted, while under the new law, the rate is raised to 150%, which is intended to encourage the high-tech research and development.
　　The new law also sets the deduction ceiling for public welfare donation and advertising expenses. That is within the amount of 12% of the annual profits for the former and within 15% of the annual sales income for the latter.
　　c. Preferential policies
　　The new law updates the current “subject -divided” policies with the new ones applied mainly by the criterion of industries and supplemented by the criterion of districts. The policies are devised to lead investments to flow to the high-tech, environmental protection industries, etc., and the central and west areas as well.
　　In addition, enterprises conceiving tax planning strategies shall pay special attention to the relevant content of “affiliated enterprises”, “controlled FEs”, and make reasonable arrangements by taking the advantages of the transition period of tax preferences.
　　Tips: Transition period of tax preferences
　　For enterprises established before March 16, 2007, the transition period is 5 years;
　　For enterprises established between March 17 and December 31, 2007, the tax preferences are still applicable for the accounting year of 2007.

　　　　　　　　　　　　　　　Manage Legal Risks of Investment
　　Hangzhou is a city flexibly integrating the natural advantages with modern industries and guiding the trend of leisure economy; a city where living is like a tour and the feeling of peace and happiness is being transformed into vigor and fortune. Conditions being ripe, with the West Lake Forum to Qiantang River Venturing, Hangzhou is becoming more and more prosperous. In November 2004, Hangzhou was selected by CCTV the city of the strongest economic vitality in 　　China. And the honor of the city also includes:
　　＊Appraised by the Ministry of Public Security to be the most secured city in China;
　　＊Assessed as the city with best investment environment for two years successively in the investigation report released by the World Bank ranking among 23 cities in China;
　　＊In September 2004, appraised by the Forbes Magazine the first in the 2004 list of the best commercial cities of mainland China.
　　It is important for foreign investors to understand the opportunities that await them. And investors have reason to be optimistic that the returns will be amazing. However, sophisticated investors know that all investments carry with them some level of risk. An important element of investment management is recognizing various types of risks and controlling their impact on your overall portfolio. Primary types of legal risks are outlined below.
　　Ⅰ With complicated legislative levels and equivocal legislative competence, foreign investors may often find Chinese law vague and ambiguous.
　　Ⅱ Use administrative measures (such as confidential files, internal regulations, administrative directions and sanctions, etc. ) instead of legal practice to supervise foreign capitals, lacking in transparency.
　　Ⅲ Fair competition system between foreign and domestic funds.
　　In one hand, the government has sparing no efforts to consummate the legal system, and making it unified, steady, clarity and foreseeable; in the other hand, foreign investors should establish their reply strategies, like lucubrate the legal environment of Hangzhou first and find yourself the right legal counsel. A team of competent and reliable lawyer will provide high quality legal services and turn out to be your best investment. With the development of socialist market economy system comes the improvement of legal system. Considering highlights of the macroscopic readjustment, our experienced lawyer group would like to call your special attention to two issues as follows:
　　＊Land
　　Ⅰ whether it is an industrial land or not; if not, consult with the government officials and discuss the feasibilities of land requisition and usage alteration.
　　Ⅱ basic price of the land; According to law, the price of land transfer shall not under 70% of the basic price of the land. An excellent lawyer will resort to multitudinous measures to cut down the land cost.
　　Ⅲ the way of land transfer; recognize if it is transfer by contract or by bidding to avoid illegal procedure.
　　＊Labor
　　Ⅰminimum wage system and average salary standard as well as the local regulations about payment.
　　Ⅱ the local social security system and its future layout; consult with your lawyer to set up the respond steps.
　　Ⅲ dispute settlement system, like conflict between capital and labor, responsibilities of the local administration, etc..