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FAQs about the SME and PTE funding program (FPSP)
http://www.dongguantoday.com    8/10/2009 7:29:00 PM

1. What is the purpose of FPSP?

SMEs are frequently faced with difficulties in funding, which also serve as a bottleneck for their development. In particular, the global financial crisis has made an impact on the economic development of Dongguan, posing more challenges and difficulties for SMEs undergoing industrial transformation and upgrade. The FPSP fund is now at the top of Dongguan’s agenda. As a bridge between credit borrowers and lenders, the government of Dongguan is committed to significantly easing the pressure of SME funding by lowering the funding threshold for designated enterprises on one hand and sharing the risks with financial institutions on the other.

2. What is FPSP?

According to the declared regulations on eligibility and procedures, the government selects eligible enterprises to enter the FPSP Database. FPSP is composed of the following three parts:
• Loan support: For newly increased loans granted by banks to enterprises after Oct. 1, 2008 (not including a new loan granted to pay an old loan), the government provides direct loan support.
• Credit guarantee support: For newly increased loans issued by credit guarantee institutions to enterprises, the government provides credit guarantee support.
• Loan interest subsidies: For newly increased loans issued to designated enterprises (not including short-term bills and trade funding), the government provides loan interest subsidies.
All banks and credit guarantee institutions participating in this program should sign a cooperation agreement with the government of Dongguan.

3. What enterprises are qualified to be entered in the FPSP Database?

SMEs in the Database must abide by related laws and rules and follow the industrial orientation of Dongguan. To be eligible for the Database, an SME shall:
• Be a domestic enterprise
• Register with the Administration of Industry and Commerce(AIC)
• Pay tax in accordance with the law
• Possess an independent legal person identity
• Engage in a manufacturing business with an annual sales less than 300 million yuan
• Have good credit, including that of the company and all shareholders
The SME must also meet one of the following criteria:
• Award winner of a famous brand or trademark at a provincial level or above
• One of the 100 private enterprises at the provincial level; one of the top 50 private enterprises and leading industrial enterprises at the city level; a leading enterprise of equipment manufacturing; or a growing SME at the city level or above
• Bid winner of a major project while a developer of a technology innovation project. (including the following projects at three levels)
National level: Special project of national major industrial technology development; special project of national textile restructuring; or special development project of national SMEs
Provincial level: Special break-through bid project in key fields in Guangdong and Hong Kong; special bid project of technological renovation supported by the Provincial Financial Bureau; special project of potential exploration; special project of restructuring; or special SME project
City level: Special project of technological renovation and innovation; special project of equipment manufacturing development; special project of SME development; special project introducing technology and equipment re-innovation; or special project of technological absorption and digestion, etc.

The SME may be a high-tech enterprise at one of the following levels:

• National level: High-tech enterprises; innovative pilot enterprises and software enterprises; high-tech enterprises,
• Provincial level: Privately run technology enterprise and software enterprise; innovative pilot enterprise; intellectual property strategy pilot enterprise; intellectual property pilot enterprise; or dominant enterprise of intellectual property and software enterprises
• City Level: Privately run technology enterprise; patent pilot enterprise; patent incubating enterprise; or technology award winner (scheduling project and patent) at the city level or above.

The SME must meet one of the criteria below:

• A top 100 information technology (IT) business in Dongguan; IT enterprise targeted for restructuring and upgrading; key independent innovation enterprise of IT industry; IT industry enterprise in China’s 11th five-year plan; enterprise operating in an innovative industrial park, key enterprise in an industrial park; pioneer enterprise extending the application of information technology; or key software enterprise included in the national plan.
• Be in line with national industrial orientation such as high-tech industry prioritized by the government
• Enterprise with a technology center or engineering R&D center at the city level or above
• IPO candidate enterprise in Dongguan
• Candidate approved by a town/subdistrict government and reviewed by BOET after receiving a bank recommendation or application filing

PTEs on the Database shall abide by related laws and rules and follow the industrial orientation of Dongguan. To be eligible for the Database, a PTE shall:

• Be an overseas-invested enterprise
• Register with the Administration of Industry and Commerce (AIC)
• Pay taxes in accordance with the law
• Possess an independent legal personal identity and engage in a processing and trade business. (including processing with supplied materials and/or with imported materials)
• Pass a joint annual inspection
• Be categorized as A and/or B in the customs system
• Have a good credit history for itself and its shareholders

PTEs must also meet one of the following criteria:

• Currently following the industrial orientation of overseas-invested enterprises in Dongguan
• A high-tech enterprise at national or provincial level
• An award winner of a famous brand or trademark at the provincial level or above
• An IPO candidate enterprise in Dongguan
• A transformation and upgrade enterprise prioritized by a town/subdistrict government of Dongguan
• A pilot enterprise of “brand building” with domestic sales in Dongguan
• A candidate approved by the town/subdistrict government and reviewed by BOET after bank recommendation or application filing

NOTE: Enterprises transformed from any of the three OEM forms and compensation trade into overseas-invested enterprises are eligible for FPSP as long as they meet the above requirements regardless of the time of transformation.

4. How does an eligible enterprise get access to FPSP?

To have access to FPSP, an eligible enterprise can apply individually or be recommended by a banking institution.
(a) For enterprises chosen and recommended by banking institutions, the Dongguan sub-branch of the People's Bank of China collects candidate information and forwards it to BOET or BOFTEC for final review.
(b) Enterprises applying by themselves should prepare two copies of the following documents and submit them to a town/subdistrict BOET or BOFTEC. Having been given assessments by the town/subdistrict government, their application should be forwarded to BOET or BOFTEC for final review. The required documents are as follows:
• Application Form for Key Small and Medium Enterprises or Application Form for Key Processing Trade Enterprises
• Business registration license, organization code certificate, tax registration certificate identity documents of the legal representative and shareholders (cooperate shareholder business licenses, if available)
• Other valid documents including, but not limited to, award certificates, project contracts, government documents

5. Where can I get the Application Form for Key Small and Medium Enterprises and/or Application Form for Key Processing Trade Enterprises?

The application forms can be obtained from a town/subdistrict BOET or BOFTEC, or downloaded from websites for BOET (dgetb.dg.gov.cn),BOFTEC (www.dgboftec.gov.cn), or Bureau of Science & Technology (www.dgstb.gov.cn), or Bureau of Taiwan Affairs (dgtw.dg.gov.cn).

6. Will the eligible enterprises automatically be listed in the Database for SMEs and PTEs?

No. Upon bank recommendation or application filing, the eligible SMEs or PTEs will be reviewed by BOET or BOFTEC for final review. BOET will make a list of the qualified enterprises and notify the public through city-level media (notice period should be no less than 5 days). During the notice period, written public comments are collected and forwarded to BOET or BOFTEC. Provided there is no dissent or the dissent is invalid during the notice period, the enterprise will be officially added to the Database of SMEs and PTEs. BOET will make public the Database of SMEs and PTEs prioritized by the government.

7. What can an SME or PTE candidate do in the event of dissent during the notice period?

In the event their application encounters dissent, candidates should respond within one month and submit supporting documents to BOFTEC or BOEC for reevaluation. Enterprises that waive their right to respond will be regarded as withdrawing from the reevaluation process.

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Source:www.dgtoday.com.cn/ Dongguan Bureau of Foreign Trade and Economic Cooperation  Editor: Tan Jing
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