Helpson receives 'National High-Tech Enterprise' status

Nov 22 2010

China Pharma Holdings, Inc. ("China Pharma") (NYSE Amex: CPHI), which develops, manufactures, and markets specialty pharmaceutical products in China, today announced that its wholly owned subsidiary, Hainan Helpson Medical & Biotechnology Co., Ltd ("Helpson"), received the "National High-Tech Enterprise" status ("National HT Status") from the PRC government, as recognized by the Ministry of Science and Technology of China, the Ministry of Finance, and the State Administration of Taxation. With this designation, China Pharma is entitled to a preferential tax rate of 15 percent for the coming three years, which is notably lower than the statutory income tax rate of 25 percent.

To be recognized as a "National High-Tech Enterprise", China Pharma's wholly owned subsidiary, Helpson, has met the following requirements: (i) it possesses pipeline products with independent intellectual property within one of the "key high-tech fields supported by the state"; (ii) it leverages scientific technology to materially improve technological/product advancements, while continuously practicing creative research and development; (iii) its research and development, organizational, management, and technical outcome transference capabilities are in line with the requirements; (iv) it has sufficient independent intellectual property that supports revenues generated by transformational scientific and technological achievements, and capital growth.

According to the Enterprise Income Tax Law of the People's Republic of China, implemented on January 1, 2008, the statutory tax rate is 25%. However, as a High-Tech enterprise, the Company will benefit from a preferential tax rate of 15% for a defined period of time.

"We are pleased to pass the rigorous national evaluation process that has led to this privileged distinction," remarked Ms. Zhilin Li, President and CEO of the Company. "We will be eligible for a preferential tax rate for the next three years, as well as a government subsidy for innovative programs. This status is valid from 2011 through 2013 and will be renewable upon evaluation by relevant government authorities every three years."