The regional government gives foreign-invested projects priority through each step of the formation process in planning, project approval, provision of capital, construction start-up, establishment of the business itself and registration.

The regional government protects the legitimate rights of foreign businessmen according to law. Foreign business people with an interest in a wholly-owned enterprise or a joint venture may empower friends or relatives in China to act as their agent regarding that interest provided that they have legally valid power of attorney; likewise, they may transfer possession or distribute in succession the said interest. When a foreign businessperson decides to cede his interest to the Chinese government for compensation or when the state proceeding from public interest requires the appropriation of that interest, such actions will be taken through legal procedures and appropriate compensation given.

In case of disagreements arising during the performance of a contract or other contract related disputes involving a foreign businessperson, the concerned parties should make their best efforts to seek a negotiated settlement. If any of the concerned parties refuse the negotiated settlement or if a settlement cannot be reached, the foreign businessperson may petition the Trade Arbitration Committee of the Tibet Autonomous Region for arbitration. With the consent of all parties to the contract, application may be made to national or provincial-level arbitration organizations in China or to international arbitration organizations.

Land use

Foreign businesspeople who invest in Tibet can buy building property and land-use rights for terms ranging from 50 to 70 years. A wholly foreign funded enterprise with a period of operation exceeding ten years is exempt from city land-use tax during the approved construction period if it occupies state-owned land and from cultivated land occupation taxes if it occupies cultivated land. During the eight years following the start of operations it will pay half of normal land use taxes. Enterprises with a period of operation less than ten years occupying cultivated land are exempt from cultivated land occupation taxes and from city land occupation taxes during the period of construction. Joint ventures, Sino-foreign cooperative enterprises and other joint operations using a site currently under the control of a Chinese partner or newly occupying approved state-owned land, are exempt from city land-use taxes during the approved construction period and, if they occupy cultivated land, from cultivated land occupation taxes. They are further exempt from land-use taxes for eight years following the start of operations. Production-type foreign-invested enterprises receive preferential treatment regarding land use fees.

Mining

Tibet exercises a compensable development of resources according to law. With the approval of the regional government, all mineral resources not specifically excluded by state statute can be exploited by foreign businesspeople. The foreign entity may participate in a joint venture or a cooperative enterprise or operate as wholly foreign-owned enterprise in prospecting and mining. China's "Mineral Resources Law" and "Provisions for Mineral Resources Compensation Levies and Their Management" state that resources tax and resources compensation are to be collected from all miners regardless of their economic status or form of operation or the type of mineral resource exploited (including, e.g., geothermal energy, sandstone used in brick and tile making, sand shale used in building, clay, granite and marble).

Import-export trade

The government encourages and supports Tibetan enterprises and joint ventures which choose to set up sole proprietorships or joint operations in neighboring counties to produce goods for sale exclusively outside China using raw materials, semi-manufactured goods or technical facilities from within or without the region. Foreign trade enterprises are permitted to swap imported goods with other provinces and regions in China for materials needed for engineering construction, production or daily life in Tibet. The Foreign Economic Relations and Trade Bureau of Tibet Autonomous Region is authorized to issue permits setting import and export commodity quotas with approval of the responsible state-level department, in addition to commodities exported under unified state management through tender offer and commodities imported by state-stipulated specialized companies.

Border trade

All goods, whether produced by enterprises in Tibet, other provinces of China or other countries, can be sold in border markets. Permits for import and export commodities can be obtained from local border trade administrative departments authorized by the Foreign Economic Relations and Trade Bureau of Tibet Autonomous Region. Commodities imported at border markets can be sold elsewhere in China after approval by the government of Tibet Autonomous Region.

Taxation

Industrial and commercial taxes, income tax and customs tax are reduced or remitted to varying degrees depending on the amount invested by the foreign businessperson, type of product produced and length of investment. Earnings from a production-type enterprise set up by a foreign businessperson in Tibet are subject to a ten percent business earnings tax beginning the first year the enterprise shows a profit: the enterprise is exempt from local taxes on earnings.

Production-type enterprises working in energy, transportation, agriculture or animal husbandry with a period of operations in excess of ten years are exempted from business earnings taxes for the first five years after they show a profit; business earnings taxes are then paid at a 50 percent discount for the subsequent three years. Enterprises engaging in processing agricultural or animal by-products or other processing or the manufacture of traditional handicrafts and tourist commodities with a period of operation in excess of ten years are exempted from taxes on earnings from the first four years after showing a profit: taxes on earnings then receive a 50 percent discount for the next two years. Tour smelted enterprises capitulated with an investment of over US$ 5 million or RMB 30 million yuan with a period of operation in excess of ten years are exempted from taxes on earning for three years after showing a profit, receiving a 50 percent discount on taxes on earnings the following year. Enterprise that do not meet the above descended standards are exempted from taxes on earnings for the first two years of operation and receive a 50 percent discount on taxes on earnings for their third year.

Foreign business entities that do not maintain a physical presence in Tibet but receive stock dividends, interest, rents, proprietary right use fees or other revenues from Tibet pay a seven percent tax on earnings, unless legally exempt. If a foreign businessperson reinvests profits earned from a business in Tibet in another operation in Tibet or use profits to expand production for a period no less than five years, he will be returned all his tax already paid on earnings from his investment. He pays all other taxes than those on earnings as other enterprises of the same type in Tibet do.

Foreign businesspersons are permitted to use RMB in place of foreign exchange for tax payments. When a foreign businessperson remits his profits or when a foreign staff member remits his personal income outside of China, he will be exempted from income tax on the remitted amount. Any enterprise with exports revenue accounting for more than 50 percent of sales revenue in a given year will receive a 50 percent discount on taxes on earnings for that year, in addition to the above exemptions and reduced rates. That portion of a foreign business entity's investment that goes for machinery, equipment, building materials, miscellaneous parts and components used in the enterprise is exempt from import taxes and the industrial and commercial consolidated tax. Likewise, reasonable quantities of imported office appliances, household items and vehicles for the foreign businessperson's own use are exempt from import taxes and the industrial and commercial consolidated tax; such articles do not require an import permit, only customs inspection.

Imported raw materials, accessory materials, packing materials, miscellaneous parts and components used in manufacturing or processing products exclusively for export are exempt from import taxes and the industrial and commercial consolidated tax. If only a portion of such goods produced are for export, that portion of imported materials and parts used for export production is exempt from import taxes and the industrial and commercial consolidated tax, while the remaining portion used for goods sold in China receives a 50 percent discount on import taxes and the industrial and commercial consolidated tax.