Hainan Free Trade Port – 60 Key Policies for Foreign Investments

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 we list all the 60 key policies to facilitate foreign investments in the province.


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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

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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


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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

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