Hainan province is located in the southernmost part of China. Hainan has a special geographical advantage. To the north, it is delimited by Qiongzhou Strait and Guangdong Province. The other three sides are separated from the sea. It is adjacent to the Philippines, Brunei, Indonesia and Malaysia. It is a maritime hub between the Indian Ocean and the Pacific Ocean, as well as a regional center connecting Northeast Asia and Southeast Asia. At present, Hainan Province is China‘s largest special economic zone, the largest pilot free trade zone.
During the construction of Hainan Pilot Free Trade Port, the following considerations shall be taken: Establishing a new open economic system; deepen market-oriented reform and create a legal, international and convenient business environment; carry out the new development concept, promote high-quality development and build a modern economic system; supporting economic globalization and build a community with a shared future for mankind.
Policies of Hainan Pilot Free Trade Port as following:
ü Income tax
1. Maximum personal income tax of 15 percent for eligible talents. | For the senior personnel and talents in short supply who work in Hainan free trade port, the part whose actual individual income tax exceeds 15% shall be exempted. |
2. Corporate income tax of 15 percent on encouraged industrial enterprises. | For the encouraged industrial enterprises registered in Hainan free trade port and operated substantially, the corporate income tax shall be reduced by 15%. |
ü Enterprise and industry tax
1. Exempt from import duties, import value-added tax and consumption tax on imported production equipment for enterprises 'own use. | 1.Implement the negative list management of “zero customs duty” for the production equipment imported by the enterprise for self use. 2.Goods under the management of "zero customs duty" list shall be exempted from import tariff, import value-added tax and consumption tax. |
2. Tax exemption for some tertiary industries. | For the tourism industry, modern service industry and high-tech industry enterprises established in Hainan free trade port, the income from newly increased overseas direct investment before 2025 shall be exempted from corporate income tax. |
3. Tax policy on capital expenditure of enterprises. | For the capital expenditure that meets the requirements of the enterprise, it is allowed to deduct or accelerate the depreciation and amortization in a lump sum before tax in the current period. |
4. "Hainan manufacturing and processing" principle. | Goods produced in Hainan or with the processing value of imported materials and parts exceeding 30% will be exempted from import tariff when entering the mainland. |
ü Import duties, import value-added tax and consumption tax
1. Exempt from import duties, import value-added tax and consumption tax on imported goods purchased by island residents. | 1. For the imported goods consumed by the residents in Hainan, the positive list management shall be implemented, and the purchase of duty-free goods in the island shall be allowed. 2. Goods and articles under the management of "zero duty" list shall be exempted from import duties, import value-added tax and consumption tax. |
2. Exempt from import duties, import value-added tax and consumption tax on imported operational vehicles and yachts. | 1. The positive list management of "zero duty" shall be implemented for the ships, aircrafts and other means of transport and yachts imported from the island for transportation and tourism. 2. Goods and articles under the management of "zero duty" list shall be exempted from import duty, import value-added tax and consumption tax. |
3. Exempt from import duties, import value-added tax and consumption tax on raw and auxiliary materials imported for production. | 1. For the imported raw and auxiliary materials imported for production and self use or consumed in the production and processing activities (or in the process of service trade) in the mode of "two ends outside", the positive list management of "zero duty" shall be implemented. 2. Goods and articles under the management of "zero duty" list shall be exempted from import duty, import value-added tax and consumption tax. |
ü Livelihood
1. Offshore duty-free shopping policy. | Raise the quota for offshore duty-free shopping to RMB 100,000 per person per year and expand the categories of duty-free products. |
2. Implement a more convenient visa-free entry policy. | 1. Expand the visa-free entry channel from the invitation reception of travel agencies to the self declaration or invitation reception of foreigners through corporates. 2. Expanding restrictions on the reasons for foreigners to apply for visa-free entry into Hainan and allowing foreigners to apply for visa-free entry into Hainan for business, visits, family visits, medical treatment, exhibitions, sports competitions and other reasons. 3. Implement a 15-day visa-free policy for foreign tourist groups to enter the country by cruise. |
3. Open branch schools independently of special majors. | Allow overseas high-level universities and colleges specialized in science, engineering, agriculture and medicine to set up branch independently in Hainan. |
4. Build Hainan into an island featuring innovative and international education. | |
5. Tax exemption on imports and sales for overseas exhibits during the exhibition. | When holding China International Consumer Goods Expo and the import and sales of overseas exhibits of national level exhibitions, enjoy the tax-free policy during the exhibition period. The tax-free policy will be specifically formulated by the relevant departments. |
6. Enable non-residents to participate in trading and fund settlement at trading venues. | |
7. Build a regional medical center. | To sum up the experience of pilot construction of regional medical center and study and support the construction of Regional Medical Center in Hainan. |
8. Issue Hainan provincial bonds globally. | |
9. Build a pilot zone for cruise tourism. | Speed up the development of Sanya into an international cruise home port, support the construction of cruise tourism pilot area, and attract international cruise registration. |
10. Build a pilot zone for reform, development and innovation of the yacht industry. | Set up yacht industry reform and development innovation pilot area, support the establishment of national level tourist resort and 5A level scenic spot. |
11. Build Hainan into an International Design Island. | |
12. Build a national sino-foreign culture and trade exchange base. | |
13. Develop over-the-counter (OTC) derivatives services. | |
14. Authorize the Hainan government to manage and adjust the use of cultivated land, permanent basic farmland, forestland and land for construction. | Under the premise of not breaking through the ecological protection red line, permanent basic farmland area, cultivated land and forest land retention, total scale of construction land and other important indicators clearly defined in the land spatial planning of Hainan Province and ensuring the quality is not reduced, Hainan is authorized to examine and approve the layout adjustment of cultivated land, permanent basic farmland, forest land and construction land in the whole province and incorporate them into Hainan Province and city according to the conditions stipulated by the state County land space planning. |
