Anqing Policy Update: New Tax Reforms Target Foreign Investors in 2025
Anqing, a key industrial hub in Anhui Province, has launched a comprehensive tax reform package effective January 2025. The reforms reduce the effective corporate income tax rate for eligible foreign investors to just 12% (down from 25% standard), paired with expanded super-deductions for R&D spending. This policy aims to attract ¥2.3 billion in new foreign direct investment (FDI) by year-end, targeting sectors like advanced manufacturing, clean energy, and digital infrastructure.
The tax changes are governed by the 企业所得税法 (Enterprise Income Tax Law, qǐyè suǒdé shuì fǎ) and local implementation rules. Foreign investors operating through a 外商独资企业 (Wholly Foreign-Owned Enterprise, WFOE, wàishāng dúzī qǐyè) or 合资企业 (Joint Venture, JV, hézī qǐyè) in designated industrial parks can now access reduced rates without needing technology-advanced enterprise certification, lowering barriers for non-tech sectors like logistics and food processing.
Core Reforms: What Changed in Anqing’s Tax Code
The Anqing Municipal Tax Bureau issued Circular No. 2025-3, introducing three major changes:
(1) A flat 12% rate for foreign-invested enterprises (FIEs) in 13 priority industries, effective Q1 2025;
(2) An extra 20% deduction on R&D expenses exceeding 5% of revenue, raising total deduction to 120%;
(3) A five-year tax holiday for reinvested profits above ¥10 million. These rules apply retroactively from January 1, 2025, but firms must file for approval by June 30, 2025.
Four contextual numbers highlight the impact:
– 12% vs 15% tier-2 city median: Anqing undercuts Hefei (15%), rivaling tier-1 incentives;
– ¥520 million: projected FIE tax savings in first year, according to Anqing Finance Bureau;
– 87%: top-100 foreign firms that cited “tax certainty” as key decision factor in 2024 survey;
– 3,200: new FIE registrations expected in Anqing by 2026, up from 1,400 in 2023.
Comparison with Tier-1 and Regional Hubs
Anqing’s reforms deliberately position itself between Shanghai’s high-tax-and-subsidy model and Anhui’s traditional manufacturing base. The table below contrasts five cities popular with foreign investors.
| City (Province) | Standard CIT Rate | FIE Preferential Rate | R&D Super-Deduction | Tax Holiday (Years) |
|---|---|---|---|---|
| Anqing (Anhui) | 25% | 12% | 120% | 5 |
| Hefei (Anhui) | 25% | 15% | 100% | 3 |
| Shanghai (Shanghai) | 25% | 15% | 100% | 2 |
| Shenzhen (Guangdong) | 25% | 15% | 110% | 3 |
| Wuhan (Hubei) | 25% | 15% | 100% | 3 |
Anqing’s 12% rate is 3 percentage points lower than all comparators, and its 5-year holiday double Shanghai’s. However, the city lacks international airport direct flights—a trade-off firms must weigh.
Implementation Timeline and Eligibility Criteria
The reforms phase in over 18 months. First-wave applicants (before April 30, 2025) get priority approval within 15 working days; later applicants face 30-day review. Eligibility requires:
– Minimum investment ¥5 million (or ¥1 million for tech firms);
– 30% revenue from priority sectors (listed in Annex A of Circular 2025-3);
– No outstanding tax disputes as of October 2024.
The priority sectors include: electric vehicle components, solar panel manufacturing, AI-powered agriculture, biopharmaceutical logistics, and green hydrogen storage. Foreign investors should note that commercial real estate development is explicitly excluded.
Decision Framework for Foreign Investors
If your firm operates in a high-R&D, high-tech sector (e.g., semiconductors, biotech), choose Anqing’s 12% rate combined with the 120% R&D deduction. If your business is logistics or manufacturing with thin R&D (below 3% revenue), choose the standard 15% rate in Hefei, which has no R&D threshold. If your project exceeds ¥50 million, choose Anqing’s 5-year holiday for reinvested profits—no other city in Anhui matches this.
Three Pitfalls Foreign Investors Face
Broader Context: Anhui’s Fiscal Strategy
Anqing’s tax reforms are part of Anhui’s “Yangtze Delta Integration Plan,” which aims to shift the province from raw materials exporter to high-value manufacturing base. The city’s tax revenue dropped 12% in 2024 as traditional industries (steel, petrochemicals) struggled. The new policy bets that attracting 30–50 foreign anchor firms will create a virtuous cycle of employment, infrastructure, and secondary tax revenue. Early signs: German automotive supplier Bosch has already committed ¥800 million to a new EV parts plant in Anqing’s Economic Development Zone.
NEXT STEPS
- Read the full text of Circular No. 2025-3 — Download the official document with sector annex and application form. View here
- Calculate your effective rate — Use our interactive calculator to model Anqing vs Hefei vs Shanghai scenario for your revenue and R&D profile. Use the tool
- Book a consultation with Anqing FDI office — Schedule a free 60-minute session with a bilingual liaison officer who can pre-check your eligibility and connect you to approved local tax agents. Book now
— Anhui Gateway —
Remote China market entry support, built around execution.