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2025-09-18Conditions for High-Tech Enterprise Recognition in China
The standard corporate income tax rate in China is 25% currently. Ratified high-tech enterprises may enjoy a preferential corporate income tax rate of 15% and receive policy support such as special funds from national and local governments, scientific and technological project funding, and additional deductions for R&D expenses. So what are the conditions to apply for high-tech enterprise recognition?
According to the Measures for the Administration of the Recognition of High and New Technology Enterprise (Guokefahuo [2016] 32) jointly issued by the Ministry of Science and Technology, Ministry of Finance and State Administration of Taxation of the PRC, to apply for high-tech enterprise recognition, the following basic conditions shall be satisfied simultaneously:
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The enterprise shall have been incorporated for more than one year when applying for ratification.
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The enterprise acquires the ownership of the intellectual property rights that play a core supporting role in the technologies of its main products (services) by means of independent R&D, transfer, gift, merger and acquisition, etc.
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The technologies that play a core supporting role in the main products (services) of the enterprise fall within the scope prescribed in the Fields of High and New Technology under the Primary Support of the State.
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The number of scientific and technological personnel engaged in R&D and related technological innovation activities shall account for not less than 10% of the total number of employees of the enterprise in the current year.
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The proportion of the total R&D expenses in the total sales revenue of the enterprise in the last three fiscal years (the actual operation period less than three years shall be calculated according to the actual operation period) shall meet the following requirements:
(1) For the enterprise with sales revenue of less than RMB50 million (inclusive) in the last year, the proportion shall not be less than 5%;
(2) For the enterprise with sales revenue ranging from RMB50 million to RMB200 million (inclusive) in the last year, the proportion shall not be less than 4%; and
(3) For the enterprise with sales revenue of more than RMB200 million, the proportion shall not be less than 3%.
The total R&D expenses incurred by the enterprise in China shall account for no less than 60% of its total R&D expenses.
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The proportion of the income from new and high technology products (services) in the last year to the total income of the enterprise in the same period shall not be less than 60%.
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The evaluated innovation capability of the enterprise shall meet the corresponding requirements.
- The enterprise is absent from major safety or quality accident or serious environmental violation within one year prior to the application for ratification.
Currently, the Fields of High and New Technology under the Primary Support of the State cover the following eight fields: electronic information, biology and new medicine, aerospace, new materials, high-tech services, new energy and energy conservation, resources and environment, advanced manufacturing and automation.
KAIZEN Group is equipped with experienced and highly qualified professional consultants and is therefore well positioned to provide professional advices and services in respect of the formation and registration of company, application for various business licences and permits, company compliance, tax planning, audit and accounting in China. Please call and talk to our professional consultants for details.
Disclaimer
All information in this article is only for the purpose of information sharing, instead of professional suggestion. Kaizen will not assume any responsibility for loss or damage.
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All information in this article is only for the purpose of information sharing, instead of professional suggestion. Kaizen will not assume any responsibility for loss or damage.
WhatsApp/Line/Wechat: +852 5616 4140
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