The Chinese government has recently announced the building of a high-quality and high-standard free trade port in south China’s Hainan Province. In 2018, China also announced the decision to develop Hainan into a pilot free trade zone, and with this move, the government wants to continue to develop the province, opening-up to foreign investments to help the economy.
China aims to build the southern island province into a globally influential duty-free trading center by the middle of the century.
The plan aims to facilitate free trade, investment and cross-border capital flows in Hainan and says designated imported goods will be exempted from tariffs on the whole island.
Below Hainan Provincial Bureau of International Economic Development (Invest in Hainan) lists all the 60 key policies to facilitate foreign investments in the province.
Policies about Taxes
1. Maximum personal income tax of 15 percent for eligible talents
2. Corporate income tax of 15 percent on encouraged industrial enterprises
3. Allow qualified capital expenditures to be fully tax deducted, or to accelerate depreciation and amortization
4. Export tax rebates on domestically built ships that are registered at Yangpu Port of China and engaged in international transport
5. Adopt a trial policy of tax rebates at the port of departure on goods that use Yangpu Port of China as a transit port for the final departure from China
Policies about Exemptions
6. Exemption from import duties, import value-added tax, and consumption tax on imported production equipment for enterprises’ own use
7. Exemption from import duties, import value-added tax, and consumption tax on imported operational vehicles and yachts
8. Exemption from import duties, import value-added tax, and consumption tax on raw and auxiliary materials imported for production
9. Exemption from import duties, import value-added tax, and consumption tax on imported goods purchased by island residents
10. Exemption from corporate tax on the income acquired from a new foreign direct investment before 2025 for tourism, modern services, and high-tech industry enterprises
11. Tax exemption on imports and sales for overseas exhibits during the exhibition
12. Products originating from Hainan, including output products whose added value exceeds 30 percent after the domestic processing of imported intermediary products, are exempt from taxes when entering the rest of China
Policies about Industries
13. Build Yangpu Port of China into an international port of registry
14. Build Hainan into an island featuring innovative and international education
15. Establish a multi-functional free trade account system
16. Establish Hainan International Intellectual Property Rights Exchange
17. Support overseas securities, funds, and futures institutions to set up wholly-owned or jointly-owned institutes in Hainan
18. Support the establishment of property insurance, life insurance, and reinsurance companies, mutual insurance organizations, and self-insurance companies
19. Build an international aviation hub
20. Build a new international land and sea transport hub to connect Western China with the world
21. Build a regional medical center
22. Build a national base featuring China’ s technology blockchain and industrial innovation
23. Build a pilot zone for cruise tourism
24. Build a pilot zone for reform, development, and innovation of the yacht industry
25. Build Hainan into an International Design Island
26. Build a national sino-foreign culture and trade exchange base
Policies about Financial and Insurance Markets
27. Replace pre-audit with post-audit for the banking sector on authenticity review of cross-border and new international trade
28. Remove restrictions on overseas ship and aircraft financing
29. Decentralize the registration management of foreign debts issued by enterprises to Hainan
30. Expand the scope of cross-border asset transfer
31. Allow enterprises listed overseas to handle foreign exchange registration directly at banks
32. Support to develop cross-border medical insurance products in cooperation with overseas institutions
33. Support the construction of trading venues for international energy, shipping, property rights, and equity stakes
34. Enable non-residents to participate in trading and fund settlement at trading venues
35. Develop over-the-counter (OTC) derivatives services
36. Conduct cross-border asset management services
37. Issue Hainan provincial bonds globally
Policies about Data and Telecommunication
38. Open up value-added telecommunications services
39. Conduct services of online data processing and transaction processing
40. Open up basic telecommunications services in a safe and orderly fashion
41. Conduct the International Internet Data Interaction Pilot Project
Policies about Market Access
42. Conduct the negative list of cross-border trade in services for Hainan Free Trade Port
43. Grant enterprises to get access to the market with a prior commitment
44. Conduct the special list of market access to the Hainan Free Trade Port
45. Conduct the negative list of foreign investment access to the Hainan Free Trade Port
Policies about Visa
46. Implement a more convenient visa-free entry policy
47. Conduct a negative list management system on the issuance of work permits for foreign employees
General Policies
48. Allow flights in and out of Hainan to refuel with bonded aviation fuel
49. Allow ships (those engaged in domestic and foreign trade) that transit at Yangpu Port of China to refuel with bonded oil
50. Allow overseas high-level universities and vocational colleges specialized in science, engineering, agriculture and medicine to open branch schools independently in Hainan
51. Treat domestic and foreign enterprises as equals in government procurement
52. Salary ranges employed as main indices to evaluate talents
53. Permit foreign personnel to serve as legal representatives in legal bodies, public institutions, and state-owned enterprises
54. Prioritize the support of listing Chinese enterprises overseas
55. Expand air traffic rights, including the Fifth Freedom and Seventh Freedom
56. Authorize the Hainan government to manage and adjust the use of cultivated land, permanent basic farmland, forestland, and land for construction
57. Grant greater autonomy to various industry organizations
58. Formulate laws and regulations based on the reality of Hainan’ s free trade port construction
59. Raise the quota for offshore duty-free shopping to RMB 100,000 per person per year and expand the categories of duty-free products
60. Adopt an import & export management system featuring “free flow through the first line and efficient control at the second line” in Yangpu Bonded Port Area and other qualified zones.
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