Rules and Support

Micro Businesses & Growers
Policies That Actually Apply

A policy guide for small growers and workshops: foreign ownership rules, farmland leases, VAT and small-business tax relief, and how to apply for local subsidies.

Last updated：2026-11

Four Things to Get Straight

Most Big-Company Incentives Do Not Fit Your Scale

The usual mistake for small teams is not a lack of policy but copying a big-company checklist: the 15% corporate rate requires a 60% encouraged-industry revenue test, and foreign investors cannot register as sole traders or cooperative members. Here is what you can realistically use — and what you cannot.

Foreign Ownership: 100% Is Possible — But Not as a Sole Trader

For ordinary crop growing, primary processing and sales, a foreign investor can hold 100% of a company. Two points are easily missed: first, foreign nationals cannot operate as individual businesses (getihu), sole proprietorships or members of farmers' cooperatives, so the local “family farm” registration route is closed to foreigners — you need a company; second, seed breeding is restricted: wheat and maize variety breeding and seed production require Chinese control (Chinese share of at least 34% for wheat), and R&D, growing or propagation-material production involving China's rare and endemic superior varieties is prohibited. Subject to the 2024 Negative List and the latest official rules.

2024 Negative List: same treatment outside the list

Land: You Cannot Buy It, But You Can Lease It

Rural land is collectively owned and cannot be bought; foreigners cannot acquire ownership of farmland. The workable route is a transfer of land-use rights: sign a contract with the village collective or farmers, and as social capital you also need the township government's qualification review, project review and filing. The term cannot exceed the remaining term of the land contract, and the contract should spell out rent adjustments, renewal, exit and compensation for improvements. Facility agricultural land (greenhouses, a caretaker's hut, sorting and packing, cold storage) is managed as agricultural facility land and is normally filed with the township government rather than approved as construction land; housing, restaurants and other non-agricultural uses are not allowed, and local standards for ancillary structures vary. Subject to the latest rules of the local natural-resources and agriculture authorities.

Lease contract + township review + facility-land filing

Tax: Exemptions Have Limits, and the 15% Rate Rarely Applies

Sales of self-produced primary agricultural products are exempt from VAT, but processed goods such as roasted coffee, dried fruit or blended herbal tea generally are not and are taxed either as a small-scale taxpayer or a general taxpayer. Small-scale taxpayers with monthly sales up to CNY 100,000 pay no VAT, and the 3% levy rate is reduced to 1% through 31 December 2027. For corporate income tax, small low-profit enterprises (taxable income up to CNY 3 million, up to 300 employees, total assets up to CNY 50 million) bear an effective rate of about 5%, also through 31 December 2027; income from direct farming, forestry, animal husbandry and fishery projects is exempt or reduced, with flowers, tea, beverage crops and spices usually taxed at half. The 15% Western Development rate requires at least 60% of revenue from encouraged industries, which small growers and primary processors usually cannot meet — do not treat it as a default. Subject to the latest official rules.

VAT exemption hinges on being primary produce you grew

Subsidies: Real, But Filed Through County Calls

Subsidies exist for farm machinery, protected agriculture, on-farm cold storage, organic and green certification, and cross-border e-commerce or trade fairs. Most are organised annually by county-level agriculture or commerce departments, usually on a build-first, reimburse-later or buy-first, reimburse-later basis, and require contracts, invoices, acceptance documents and a bank account. Catalogues, amounts and thresholds differ widely by locality and change every year, so do not budget from another county's experience. We can check your documents before the window opens, but approval rests with the authorities. Subject to the latest local application guidelines.

Reimburse after completion, annual windows; subject to local rules

Incentives a Small Team Might Actually Qualify For

The thresholds come first in this table: check whether you qualify before counting the savings. Amounts and rules change, so confirm with the competent authorities before filing.

PolicyWho Qualifies and on What TermsWhat You GetHow to File
VAT exemption on own produceAgricultural producers selling their own primary produce; processed goods generally do not qualifyNo VAT on qualifying salesSelf-assess when filing and keep growing, purchasing and sales records; subject to the tax authorities' latest interpretation
Small-scale taxpayer VAT reliefAnnual VAT-taxable sales below CNY 5 million, registered as a small-scale taxpayerNo VAT below CNY 100,000 monthly sales; 3% levy reduced to 1% (through 31 December 2027)Claimed in the regular e-tax filing; no prior approval needed
Small low-profit enterprise CITTaxable income up to CNY 3 million, up to 300 employees, total assets up to CNY 50 million, in a non-restricted industry25% of income counted and taxed at 20%, an effective rate of about 5% (through 31 December 2027)Declared in prepayment and annual settlement; keep headcount and asset records
Farming, forestry, livestock and fishery CITDirectly engaged in crop growing, primary processing and similar projectsProject income exempt or reduced; flowers, tea, beverage crops and spices usually halvedClaimed at annual settlement; keep area, output and cost records
Western Development 15% rateMain business in the Western encouraged-industries catalogue, with 60%+ of total revenue from itCIT reduced to 15% (policy extended to the end of 2030)High threshold, usually out of reach for small growers; assessed case by case by the authorities
Farm machinery purchase subsidyBuying machinery on the subsidy catalogue and using it for farmingFixed-amount subsidy per machine, usually reimbursed after purchaseApply to the county agriculture department with invoices, machine details and a bank account
Protected agriculture, cold chain and certification subsidiesBuilding or upgrading greenhouses or on-farm cold storage, or obtaining organic or green certificationA share of investment or certification cost; standards vary by localityFile land-use records, contracts and acceptance documents under the county guidelines

Policies are subject to the latest official announcements: the small low-profit enterprise and small-scale taxpayer rules run through 31 December 2027, and the Western Development policy to the end of 2030. Confirm eligibility, subsidy amounts and filing requirements with a tax adviser, the local authorities or our team.

Five Steps from Registration to Land and Subsidies

  1. Choose the entity and check access rules

    Typically 1–2 weeks

    Confirm your business scope — growing, primary processing, sales, export — and the entity type. Foreign investors can only set up a company, not register as a sole trader or cooperative member; check the negative list first if seeds or seedlings are involved.

  2. Incorporate and open accounts

    Typically 3–6 weeks

    Name filing, articles, establishment registration, seals, tax and FX registration and bank account opening. Overseas documents usually need notarisation and legalisation or an apostille — the most common source of delay.

  3. Find land and sign the lease

    Typically 2–8 weeks, depending on the village and review

    Negotiate land-use rights with the village collective or farmers and sign a written contract; as social capital you need the township's qualification and project review, plus filing with the township land-contract office. Address term, rent adjustment, renewal and exit in the contract.

  4. Facility-land filing and construction

    Typically 1–3 months

    Greenhouses, a caretaker's hut, sorting and packing and cold storage are managed as facility agricultural land and filed with the township; housing, restaurants and other non-agricultural uses are not allowed. Construction, environmental and fire-safety requirements are handled separately where they apply.

  5. Permits, certification and subsidy applications

    Typically 1–6 months; certification runs in years

    Obtain the food production licence (SC), export registration or organic certification as applicable, and watch the annual subsidy guidelines from county agriculture and commerce departments; submit contracts, invoices and acceptance documents within the window.

Six Questions Small Teams Ask Most

The answers below concern small-scale operations. Policy statements and filing requirements are subject to the latest official announcements, and final eligibility rests with the authorities.

How long can a foreigner lease farmland in Yunnan?

A land-use rights transfer cannot run beyond the remaining term of the land contract. The arrangement to extend the second-round farmland contract by another 30 years is being rolled out under national plans, so the actual term depends on the remaining contract term for that plot and local implementation; five to twenty years is common in practice. The contract must go through township review and filing, and should spell out rent adjustments, renewal, exit and compensation for improvements. Subject to the latest local rules.

Can a foreign investor own 100% of a farming and processing business?

For ordinary crop growing, primary processing and sales, a wholly foreign-owned company is allowed, and sectors outside the negative list are treated the same as domestic investment. But foreign nationals cannot register as individual businesses, sole proprietorships or cooperative members — you must set up a company. Seed breeding is restricted (Chinese control required for wheat and maize, with a Chinese share of at least 34% for wheat), and R&D, growing or propagation-material production of China's rare and endemic superior varieties is prohibited. Subject to the 2024 Negative List and the latest official rules.

Is agricultural produce exempt from VAT?

Sales of self-produced primary agricultural products are exempt — fresh fruit, vegetables and flowers you grew, or unprocessed coffee beans. Once processing changes the basic form, as with roasted coffee, dried fruit or blended herbal tea, the exemption generally no longer applies; you then pay VAT as a small-scale taxpayer (no VAT below CNY 100,000 monthly sales, 3% levy reduced to 1%, through 31 December 2027) or as a general taxpayer. The tax authorities' latest interpretation governs.

How do subsidies work, and how much can we get?

County agriculture or commerce departments usually publish annual application guidelines covering machinery, greenhouses and cold-chain facilities, organic and green certification, and cross-border e-commerce or trade fairs. Most are reimbursed after construction or purchase, and require filings or contracts, invoices, acceptance documents and a bank account. Amounts and thresholds vary widely by locality and change yearly, so do not budget from another county's experience; the latest local guidelines govern.

How do seasonal hiring and social insurance work?

Seasonal workers can be engaged on part-time or service agreements under local rules, with a written agreement, agreed hours and pay, and attendance and payment records kept. For part-time workers, work-injury insurance is normally paid by the employer, and commercial accident cover is advisable too. Full-time employees must be enrolled in social insurance (pension, medical, unemployment, work injury and maternity). Daily or seasonal cash settlement is common in agriculture, but it should not replace written agreements and records. Subject to the latest labour authority rules.

Do foreign staff — including the owner — need work permits?

Yes. Anyone actually working and being paid in China needs a foreigner work permit: usually a work permit notification first, then a Z visa to enter, followed by the work permit and a work-type residence permit. Documents include a passport, proof of education or work experience, a criminal record certificate, a medical check and the employment contract, with processing typically taking four to eight weeks. Holding shares in a company does not by itself grant long-term residence or the right to work. Conditions and timing follow the authorities' latest rules.

Check This List Against Your Own Scale

Tell us what you plan to grow or process, how much you will invest and how many people are involved. We will send a shortlist of policies you can and cannot use, plus the documents to prepare. Policies follow the latest official announcements, and final eligibility rests with the authorities.

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