Currently, Minister of Science and Technology, Ministry of Finance and the State Administration of Taxation jointly publicize Measures on Designation of New and Hi-Tech Enterprises (hereafter, the Measures), elaborating the conditions of new and hi-tech enterprise designation. It clearly lists the independent IPRs for core technologies of the main products into the conditions, and makes the number of a company’s independent IPRs an important criterion for the designation.

According to the Measures, new and hi-tech enterprise refers to those resident enterprises in the categories stipulated by the Key Areas of High and New Technology under the State Supports that are constantly engaged in research, development and technological achievement transformation, have gained independent core enterprise IPRs, and have been operating on that basis. These enterprises should be registered in Chinese territory (excluding Hong Kong, Macao and Taiwan) for more than one year. Designated new and hi-tech enterprises will enjoy a series of preferential policies, including tax policy. The Measures became effect on January 1, 2008, according to which, enterprises that passed re-examinations can enjoy the title of new and hi-tech enterprises for three years and should apply for designation again after expiration.

The Measures note that Ministry of Science and Technology, Ministry of Finance and the State Administration of Taxation will jointly establish a leading group for new and hi-tech enterprise designation and management nationwide. A new and hi-tech enterprise should meet the following six qualifications simultaneously: First, the enterprise should possess independent IPRs for the core technologies of its main products (services) through ways such as independent development, assignation, donation and acquisition within the past three years, or through exclusive license for more than five years; second, its products (services) should be in the categories stipulated by the Key Areas of New and High and New Technology under the State Supports; third, scientist and technical personnel with college and university education shall account or more than 30 percent of all the staffs of the enterprises; scientists and technical personnel engaged in the research and development shall account or more than 10 percent of all the staffs of the enterprises; fourth, the enterprise should be constantly engaged in research and development (R&D), and the proportions of R&D expenditures among the company’s total sales revenue in the past three accounting years should meet certain norms. For instance, the proportion in the enterprise with the sales revenue in the past year less than 50 million yuan should be no less than 6 percent; for enterprises with annual sales of 50 million to 200 million yuan, the proportions should be higher than 4 percent; and enterprises with annual sales exceeding 200 million yuan should spend more than 3 percent of the revenue for R&D; fifth, revenues from new and hi-tech products (services) should account more than 60 percent of its total revenue that year; sixth, the enterprises should meet the requirements stipulated by the Guide Book of New and Hi-Tech Enterprise Designation and Management (to be formulated separately) in terms of the level of R&D organization and management, capacity of scientific and technological achievement transformation, the number of IPRs, and the growth of sales and gross assets.

The Key Areas of New and High and New Technological under the State Supports, as the appendix of the Measures, is published simultaneously, which include eight key new and high technological areas with the state supports, such as electronic information technology, biotechnology and neo-medical technology, aerospace and aeronautical technology, new materials technology, new energy and energy-saving technology, resource and environmental protection technology and high and new technology innovating traditional industries.