AccessTel China Inc. Qualifies for Favorable Tax Status in China
SAN JOSE, Calif.--(BUSINESS WIRE)--Nov. 22, 2000--The Board of Directors of Shopss.com, Inc. (OTC BB:SHPS - news), which will soon be renamed AccessTel Inc., is pleased to announce that its 100 percent owned subsidiary, AccessTel (China) Inc., qualifies for favorable tax treatment in China.
AccessTel (China) Inc. will develop the Chinese market with the Shanghai Haplink Information System Co., Ltd. and implement broadband wireless access technical solutions in China. AccessTel (China) INc.'s agreement is aimed at promoting the development of information technology in the Shanghai CAOHEJING New Technology Development Zone; to better provide broadband wireless Internet access technologies for enterprises within the zone; and to provide solutions for the best information access technologies.
The CAOHEJING Hi-Tech Park is the only development zone granted by the State Council in China that can enjoy the favorable policies of both the economic and technological development zone and the hi-tech industry development zone. The State and the Shanghai Municipal Government give the Park the support and promotion force for the development of investment and trade.
The Shanghai CAOHEJING Hi-Tech Park Development Corp.:
In October 1988, upon the approval of the Shanghai Municipal Government, Shanghai CAOHEJING Hi-Tech Park Development Corp. was set up as an administration and service institute. It was authorized to help create a good investment and trade environment to lure funds and advanced technology. The Shanghai CAOHEJING Hi-Tech Park covers an area of over 6 sq km, with approximately 1,000 operating companies of which 260 are foreign owned with a contracted investment of $1.5 billion (US). Over the last few years companies including Lucent Technologies, Intel, Lattice Bell, Philips, Dupont, 3M, GE, and Toshiba have all operated successfully in Park.
Preferential Policies:
In order to guarantee the legal commercial benefits of the overseas investors, the state and government of China has formulated a series of laws and regulations to encourage the foreign investment. Any foreign invested production enterprise in the Park shall pay enterprise income tax at a reduced rate of 15 percent on the income derived from production, business and other resources. The enterprises scheduled to operate for a period of 10 years or more shall be exempt from enterprise income taxes in the first and second profit-making years and allowed a 50 percent reduction in the third to fifth years.
The technologically advanced enterprises may extend for another three years the payment for income tax at a rate reduced by one half. If the rate of enterprise income tax is less than 10 percent from the beginning of the sixth year, the technologically advanced enterprises shall pay the income tax at a rate of 10 percent. If the output value of product export amounts to 70 percent or more of the total, the enterprises shall pay the income tax at a rate of 10 percent after the expiration of the period of income tax reductions and exemptions.
The sino-foreign joint ventures in the Park are allowed to remit their profit abroad, free from income tax of their remittance. The productive foreign invested enterprises are exempt from the local income tax by the end of 2000. Any export enterprise whose products for exports cover 70 percent or more is still free from local income tax after the tax-free period. The foreign-funded enterprises can enjoy the exemption of real estate tax for five years from the first month when their houses are built or bought.
AccessTel, through joint ventures and acquisitions, is poised to begin supplying Broadband Wireless, VoIP and Utility Meter Reading over a wireless and wired broadband network. These services will be provided primarily in China and the Western United States from AccessTel's base in San Jose, Calif. The wireless network and wireless local loop (WLL) services will provide rapid deployment of phone, fax, high-speed data, video and fixed ISP connections. AccessTel Inc. is deploying the latest broadband wireless strategies and telecom solutions (2 1/2G - 3G) in China.
The Shanghai Haplink Information System Co., Ltd. is a high technology enterprise controlled by Shanghai CAOHEJING New Technology Development Zone General Corporation. It is mainly engaged in Internet service provision (ISP), providing value added services in the network communications field (ICP), and the research and development of Internet technologies. The Shanghai Haplink Information System Co., Ltd. has had many years of experience in the provision of Internet services, and has gained market share in the Shanghai region as well as the CAOHEJING Development Zone.
With regard to the resources respectively invested by the parties in their technical cooperation, these can be credited as capital invested in the form of tangible and intangible assets after being priced according to the requirements of relevant Chinese government laws and policies.
Stuart Bockler, CFO of AccessTel, added, ``The introduction of AccessTel China Inc. approved for operation in China for a term of 20 years will qualify for a reduced rate of taxation in China and will be allowed to remit our profit to the US parent AccessTel Inc., free from or at a preferential rate of income tax on of our remittance. The Shanghai CAOHEJING New Technology Development Zone offers AccessTel Inc. significant opportunities to deploy our wireless broadband strategies with both local infrastructure and Governmental assistance.''
The new company will import related technical equipment needed for research and development, and will import it from its U.S. parent or from other affiliated companies. Due to their high technology contents, the main products of the new company will be the domestic market in China, and a percentage of overseas sales will be determined and implemented in accordance with the provisions of applicable Chinese laws. In the event that operations require additional licenses, the new company will complete relevant procedures in accordance with the provisions of applicable Chinese laws. The Project was approved by the CAOHEJING New Technology Development Zone in Shanghai, China on Sep. 19, 2000. AccessTel Inc.'s Web site is www.accesstelinc.net.
Forward-looking statements in this release are made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties, including, without limitation, continued acceptance of the company's products and technological changes, the company's dependence upon third-party suppliers, intellectual property rights and other risks detailed from time to time in the company's periodic reports filed with the Securities and Exchange Commission.
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Contact:
Shopps.com/AccessTel Inc.
Lawrence Liang or Stuart Bockler, 732/591-0520
or
Worldwide Corporate Finance
Sy Mitzner, 818/783-0054
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