CIRCULAR OF MINISTRY OF SCIENCE AND TECHNOLOGY ON DISTRIBUTING MEASURES FOR APPROVAL AND ADMINISTRATION OF SCIENTIFIC AND TECHNOLOGICAL ENTERPRISE INCUBATORS (INNOVATION CENTRE)

Circular of Ministry of Science and Technology on Distributing Measures for Approval and Administration of Scientific and Technological
Enterprise Incubators (Innovation Centre)

Guo Ke Fa Gao Zi [2006] No. 498

The competent departments of science and technology in all provinces, autonomous regions, municipalities directly under the central
government and cities specifically directly designated in the state plan, the Bureau of Science and Technology in Xinjiang Production
& Construction Corps and other relevant institutions:

For the purpose of implementing the Outline of Long and Medium-Term National Scientific and Technological Development Programme (2006-2020),
promoting the fast and sound development of scientific and technological enterprise incubators in an all-round way and further enhancing
and standardizing the administration of scientific and technological enterprise incubators, Ministry of Science and Technology has
formulated the Circular of Ministry of Science and Technology on Distributing Measures for Approval and Administration of Scientific
and Technological Enterprise Incubators (Innovation Centre), in accordance with the Circular of State Council on Supporting Policies
of Implementing Outline of Long and Medium-Term National Scientific and Technological Development Programme (2006-2020) (Guo Fa [2006]
No.6). It is hereby distributed and do follow it on the basis of the local realities.

Appendix: Measures for Approval and Administration of Scientific and Technological Enterprise Incubators (Innovation Centre)

Ministry of Science and Technology

December 7, 2006
Appendix:
Measures for Approval and Administration of Scientific and Technological Enterprise Incubators (Innovation Centre)
Chapter I General Provisions

Article 1

The present Measures are formulated in accordance with Circular of State Council on Supporting Policies of Implementing Outline of
Long and Medium-Term National Scientific and Technological Development Programme (2006-2020), for the purpose of implementing the
Outline of Long and Medium-Term National Scientific and Technological Development Programme (2006-2020) (Guo Fa [2005] No.44, hereinafter
referred to as the Outline of Programme), creating an environment of motivating independent innovation, propelling the conversion
of scientific and technological fruits, cultivating small and medium-sized scientific and technological enterprises, developing high-tech
industries, standardizing the administration of scientific and technological enterprise incubators in our country and promoting their
healthy development and striving to build a innovative country.

Article 2

Scientific and technological enterprise incubators (or high-tech innovation centres, hereinafter referred to as innovation centres)
are institutions of scientific and technological innovation aimed at promoting the conversion of scientific and technological fruits
and cultivating high-tech enterprises and entrepreneurs. Innovation centres are an integral part of the national innovation system
and the core of the regional one.

Article 3

The State Council and the competent departments of science and technology at various levels are in charge of the macro-regulation
of and shall provide technical guidance to innovation centres.

Chapter II Major Functions and Objectives

Article 4

Innovation centres aim at providing for incubated enterprises the shared facilities of research and development, pilot manufacturing,
operation area and office and the services in various fields such as policy, management, law, accounting, financing, market extension
and training, etc., so as to reduce the risks and costs of innovation, raise the survival and success rates of those enterprises
and cultivate successful scientific and technological enterprises and entrepreneurs.

Article 5

Innovation centres shall establish operating mechanisms suited to the socialist market economy and strive to improve their services
through various means and methods. They shall strive to realize a virtuous cycle of independent accounting, self-operating, self-constraint
and self-development and fully utilize the research, experiment, testing and manufacturing of local scientific and technological
institutions, higher education institutions, enterprises and their service agencies with a view to expanding their service functions
and raising the level of incubating service.

Article 6

The state encourages to establish specialized technology innovation centres for the purpose of raising the service level and quality
of innovation centres. Specialized technology innovation centres refer to those which focus on a special technical area with specific
incubating objects and specialized conditions, content and management team, aiming to cultivate and develop high-tech enterprises
of a certain technical field.

Chapter III The Approval and Administration of State High-Tech Innovation Centres

Article 7

Innovation centres at the prefecture level and above may apply for approval in accordance with the present Measures after being filed
with local provincial departments of science and technology.

Article 8

The department of science and technology under the State Council is in charge of the approval and administration of state high-tech
innovation centres.

Article 9

The requirements as follows shall be met to be approved as the state high-tech innovation centre:

1.

clear orientation and in line with the conditions listed in Article 2 ;

2.

strong leadership, rational setups, and more than 70% of the management possessing a junior college degree and above;

3.

having more than 10000 m2 of disposable area (more than 5000 m2 in case of specialized technology innovation centres), with incubated
enterprises covering more than 2/3 of it;

4.

complete service facilities and good service functions to provide services in various fields in commerce, capital, information, consultancy,
market, training, technological development and exchange and international cooperation, etc.

5.

good management practice, strict financial management system, complete statistic data of the innovation centre and incubated enterprises
and reporting required them to Ministry of Science and Technology for at least 2 consecutive years;

6.

with more than 80 incubated enterprises in the disposable area of the innovation centre (more than 50 in case of specialized technology
innovation centres);

7.

with altogether more than 25 graduate enterprises, and more than 1000 job opportunities provided by them and other incubated enterprises
(the figures shall be 15 and 500 in case of specialized technology innovation centres);

8.

with more than 3 million RMB of seed fund or incubating fund, and having established regular business relations with investment and
guarantee agencies;

9.

with more than 3 years of actual operating time and in good operation status;

10.

specialized technology innovation centres shall have specialized technology platforms or pilot bases and specialized capabilities
of technical consultancy and management training.

Article 10

Incubated enterprises of state high-tech innovation centres shall meet the requirements as follows:

1.

with the registered location and office area of the enterprises within the incubating area of the innovation centre;

2.

newly registered or established for less than 2 years before applying to enter the innovation centre;

3.

incubating for no more than 3 years in the innovation centre;

4.

with no more than 2 million RMB as the registered capital;

5.

with a turnover of no more than 2 million RMB the previous year for enterprises which move in;

6.

renting less than 1000 m2 of the incubating area of the innovation centre;

7.

the programmes or products the enterprises research on, develop and manufacture falling within the scope of China High-Tech Product
Catalogue issued by Ministry of Science and Technology, etc.;

8.

the head to be scientific and technological personnel familiar with the research and development of the products of the enterprise.

Article 11

Graduate enterprises from state high-tech innovation centres shall meet at least two of the requirements as follows:

1.

approved by the competent departments of science and technology at the provincial level to be high-tech enterprise;

2.

having operated for more than 2 years, in good operation, the major products having considerable production scale, the annual income
from technology, industry and trade totaling more than 5 million RMB and with more than 1 million RMB as the fixed assets and self-possessed
fund;

3.

having established modern corporate structure and sound financial system.

Article 12

The application of state high-tech innovation centres shall be first filed to the local provincial departments of science and technology
and after examination, and the latter shall report it to the department of science and technology under the State Council, which
will organize experts to evaluate it and decide on its approval on the basis of the evaluation. High-tech innovation centres which
meet the requirements in Articles 9, 10 and 11 will be granted the plate of “State High-Tech Innovation Centres” and publicized.
They will remain subordinate to the original governing department.

Article 13

The department of science and technology under the State Council will conduct an annual appraisal to the state high-tech innovation
centres. Those which fail to meet the requirements for two consecutive years will be disqualified.

Chapter IV Policies and Measures

Article 14

State high-tech innovation centres will be exempted from business tax, income tax, property tax and urban and township land use tax
for a certain period of time as of the date of approval; the measures for implementation will be formulated by the departments of
finance and taxation under the State Council.

Article 15

In accordance with Law of the People’s Republic of China on the Promotion of Small and Medium-sized Enterprises, local governments
at various levels and the competent departments of science and technology shall formulate favourable policies in terms of planning,
land use and finance, etc.

Article 16

The department of science and technology under the State Council will incorporate national innovation centres into the scope of plan
of national scientific and technological development. The competent departments of science and technology at various levels and the
administrative agencies of state high-tech innovation centres shall incorporate the work of innovation centre into the regional plan
of scientific and technological development and provide necessary support for their construction and development.

Article 17

The state supports and encourages local governments at various levels to establish innovation centres which are for public good and
guide the development of regional innovation system; the state supports and encourages the establishment of innovation centres of
various forms by enterprises, individuals and other institutions.

Article 18

The State Council and the local competent departments of science and technology at various levels will conduct an appraisal to the
work of innovation centre at irregular intervals and commend those with remarkable contribution to the innovation centres.

Chapter V Supplementary Provisions

Article 19

The provincial departments of science and technology may formulate measures for approval and administration of provincial high-tech
innovation centres according to Chapter 3 of the present Measures.

Article 20

The department of science and technology under the State Council shall be responsible for the interpretation of the present Measures.