Investing in Hainan: Industry, Economics, and Policy

Hainan (海南) is the smallest and most southern province of the Folks’s Republic of China (PRC), comprising a number of islands within the South China Sea. The overwhelming majority (about 97 %) of the province is made up of the island of Hainan, which can also be China’s largest and most populous. The title, which interprets to “south of the ocean,” displays the island’s location, which lies south of the Qiongzhou Strait, which divides it from the Leizhou Peninsula. 

Almost 200 islands unfold throughout three archipelagos, Zhongsha, Xisha, and Nansha, belong to the Hainan province, with a complete land measurement of 33,920 sq. kilometers – of which the island of Hainan covers 32,900 sq. kilometers. From 1950 to 1988, the world was part of Guangdong province, then grew to become the biggest Particular Financial Zone (SEZ) as a part of the then-ongoing Chinese language financial reform program led by Deng Xiaoping. 

Hainan contains 10 counties and 10 main cities. On the northern shore of Hainan Island is Haikou, the provincial seat, whereas on the southern aspect is Sanya, a preferred vacationer vacation spot. Wenchang, Sansha, Qionghai, Wanning, Wuzhishan, Dongfang, and Danzhou are different important cities.  

The island is inhabited by numerous ethnic teams: 15 % of the inhabitants is made up of indigenous peoples just like the Li, who’re among the many 56 ethnic teams formally acknowledged by the Chinese language authorities. The Han neighborhood nonetheless makes up the bulk (82 %) of the inhabitants. 

Hainan’s location within the economically developed space of the PRD area and inside a 1.5-hour flight radius of Hong Kong, Macao, Shenzhen, and Guangzhou, ensures entry to capital, technical help, and expertise.   

Its advantageous place has turned Hainan into a major transport hub that hyperlinks China’s southeast coastal areas with ASEAN and Southeast Asian markets and serves as a key entry level for China’s opening as much as the Pacific and the Indian Oceans. It’s located within the overlap space of the South China Financial Circle, Guangxi Beibu Gulf Financial Zone, and the ASEAN Financial Circle. 

On June 1, 2020, Chinese language authorities launched the Total Plan for the Building of Hainan Free Commerce Port, a large-scale plan to rework your entire island province right into a free commerce port (FTP) – making it the biggest particular financial zone in China. The insurance policies are designed to scale back Hainan’s dependency on conventional sectors and to function a key location for commerce and funding inside China. Along with a phased technique for capital account opening and free motion of capital, Hainan will provide larger market entry to overseas companies, particularly in sectors like telecommunications, tourism, and training.

Resulting from its giant territory (measuring 13-times the entire space of the remaining 23 commerce zones in China), various industries, wealthy assets, and the FTP improvement plan, Hainan is changing into a hotspot for overseas traders.  

On this article, we offer an outline of Hainan’s financial and industrial improvement and focus on the advantages of investing on this quickly rising area.  

Financial overview

The GDP of Hainan has been rising constantly. Based on the Hainan Provincial Bureau of Statistics, 2021 Hainan’s financial system grew 11.2 % year-on-year to RMB 647.52 billion (US$89.224) in 2021.  

With a reported price of RMB 135.39 billion (US$18.66 billion), the service sector has grown to be a serious contributor to the province’s financial system. The wholesale and retailing industries registered their largest development in 2021, with a 35.6 % improve over the earlier 12 months. 

In 2021, each trade skilled balanced and constant development:  

• The worth added of the first trade was RMB 125.44 billion (US$17.28 billion), up 3.9 % year-on-year. 
• The worth added of the secondary trade was RMB 123.88 billion (US$17.03 billion), up 6 % year-on-year. 
• The worth added of the tertiary trade was RMB 398.19 billion (US$54.88 billion), up 15.3 % year-on-year. 

Amongst all Chinese language provinces, Hainan has the best GDP share within the main sector. Agriculture contributes probably the most to Hainan’s financial system, which is dominated by the fishing trade. The island’s intensive shoreline makes it a good atmosphere for shrimp, shellfish, and different aquatic merchandise. Sanya and Qinglan are two of the primary fishing ports in Hainan.  

Tropical money crops like coconut, pepper, espresso, tea, and rubber are broadly grown in Hainan, which can also be probably the most important breeding floor for tropical fruit seeds in China. Pineapple, lychee, longan, and bananas are among the many most notable fruits grown on the island. The province additionally serves as a hub to provide natural medicines. 

The manufacturing trade in Hainan is comparatively small. In 2020, the processing of petroleum and nuclear gas constituted round 23.2 % of the entire industrial output. Different important industries on the island, in addition to transportation tools, usually take care of pure assets. Notably, Hainan is the biggest producer of rubber in China. There’s a giant number of rubber items produced there, together with latex gloves, conveyor belts, and tires. Meals processing and beverage-related industries are each strong.  

Hainan’s tertiary sector has additionally shortly developed in recent times, and in 2021 it accounted for 61.5 % of the financial system.  

Hainan’s commerce and funding

The Hainan FTP is present process a high-level opening-up by China. As its enterprise atmosphere continues to enhance, Hainan has skilled a major improve in worldwide funding inflows.

Overseas direct funding (FDI) within the province reportedly elevated from US$740 million in 2018 to US$3.52 billion in 2021. That was in contrast with a nationwide development charge of 8.1 %.

Preferential insurance policies allowed extra overseas capital to penetrate the precise financial system in Hainan. In 2021, over 97 % of the province’s complete overseas funding was within the province’s superior manufacturing and fashionable companies sectors.

Hainan welcomed 1,936 new foreign-invested companies in 2021, a rise of 92.6 % from the earlier 12 months. In 2021, the precise use of overseas capital was US$3.519 billion. Between 2018 and 2020, Hainan doubled its utilization of overseas capital, with the worth exceeding exceeded US$8.8 billion, roughly the entire quantity of overseas capital interested in Hainan within the earlier three many years mixed since its institution.

Hong Kong is Hainan’s main funding accomplice, proudly owning 75.3 % of the entire used FDI of which 53.1 % was used for leasing and industrial companies and the remaining 22.7 % for geologic prospecting, technical companies, and scientific analysis.

Key industries to observe in Hainan FTP

Tourism

Hainan goals at changing into a tourism-centered industrial system by 2025, with sightseeing as its cornerstone, and pushing the event of sectors equivalent to luxurious tourism, tradition, and sports activities tourism, and health-oriented tourism. The province goals at embracing extra various, high-end, and globalized tourism companies due to enhanced enterprise varieties, better-released shopper potential, extra high-end companies accessible, and corresponding procedures and mechanisms consistent with worldwide norms.

In 2021, over 81 million vacationers traveled to Hainan, up 25.5 % from the earlier 12 months and up 97.5 % from 2019. Tourism-related income elevated by 58.6 % in comparison with 2020 and by 30.9 % in comparison with 2019, to achieve RMB 138.43 billion (US$16.1 billion).

By offering higher leisure services, encouraging national-level sports-related tourism demonstration zones, and bettering the tourism and cultural enterprise atmosphere, Hainan intends to determine itself as a number one hotspot for “island-wide” tourism.

The tourism trade in Hainan has a number of improvement benefits, together with:

• Distinctive tourism assets: Hainan is the one tropical island province in China, which gives a wide selection of pure assets for vacationers.
• Obligation-free upon exit: Hainan options the most important duty-free retailer on the earth, and the costs there are 15 % to 35 % decrease than common. On July 1, 2020, the federal government elevated the annual duty-free buying cap per particular person from RMB 30,000 (US$4,134.74) to RMB 100,000 (US$13,782.46), with no time restrictions. Moreover, digital items, equivalent to cell phones, had been added to the record, growing the variety of eligible product classes from 38 to 45.
• Excessive density of luxurious motels: Hainan is dwelling to 94 worldwide model motels and 78 well-known resort administration corporations, all of which have a focus of luxurious resort motels.
• Visa-free coverage for 59 nations: Residents from 59 nations can enter Hainan with no visa, for a most keep of 30 days. Greater than overseas 470,000 vacationers entered Hainan with no visa in 2019 – a rise of 33 % over the earlier 12 months.

With a view to improve high-end tourism consumption and enhance the usual of the tourism sector, the province will actively promote new enterprises and vacationer hotspots via the next actions:

• Procuring excursions: Enhancing the comfort of duty-free buying rules.
• Sports activities excursions: Encouraging the combination of sports activities, tourism, and elder care.
• Medical excursions: Following the rules of the Boao Lecheng Worldwide Medical Tourism Advance Zone develop the opening of medical areas.
• Tradition excursions: Boosting the consumption of rising cultures equivalent to video video games and digital media.
• Cruise dwelling port development: Combining the cruise and sightseeing industries.
• Yacht excursions: Making a full-service platform for yacht excursions and intensifying oversight of boat rental.

Yachting and cruising

The coastal cities of Sanya and Haikou are dwelling to 2 cruise ports and 4 cruise berths. They will maintain a cruise ship that weighs as much as 150,000 tons. Between 2012 and 2019, 840,000 guests from 1,115 abroad ships visited Hainan.

The island province can also be well-known for its yacht-friendly atmosphere. 15 yacht marinas with 2,568 berths, 638 registered ships, 60 yacht golf equipment, and related companies have been created and are being run in Hainan. They embrace manufacturing, upkeep and restore, instruction, gross sales, monetary insurance coverage, and different companies. In 2019, there have been greater than 96,300 yachts within the province, and there have been 29,136 sailings – a rise of 70.9 % over the earlier 12 months. Hainan now plans to develop this sector even additional.

There are a number of benefits associated to the sector, together with:

• Imports of yachts and cruise ships are exempt from customs responsibility, import value-added tax, and consumption tax.
• Hainan is the one province that allows yacht leasing.
• Sanya is predicted to surpass all different cruise dwelling ports, changing into the most important on the earth.
• Corporations concerned within the cruise and yacht industries might be inspired to determine regional workplaces.
• As well as, the province plans to determine the Hainan Worldwide Yacht Buying and selling Middle and focus on the expansion of yacht buying and selling, show, leasing, design, manufacturing, upkeep, and crew coaching.

Finance

The finance sector in Hainan is repeatedly increasing, with monetary service suppliers displaying considerably improved capabilities and constructive developments throughout a variety of indicators. In 2021, the added worth of the Hainan monetary sector elevated by 3.6 % year-on-year to RMB 42.3 billion (US$5.8 billion), whereas provincial-level personal finance elevated by RMB 17.1 billion (US$2.3 billion), or 17.6 %, to RMB 114.1 billion (US$15.7 billion).

By handy cross-border monetary circulate, important efforts have been undertaken to construct new types of offshore worldwide commerce companies. Pilot banks recorded 521 linked transactions totaling US$146 million in 2021, a rise of 500 % year-on-year in foreign-related revenue and expenditure in new offshore international buying and selling actions.

Hainan has been pushing pilot certified overseas restricted accomplice (QFLP) and certified home restricted accomplice (QDLP) methods for cross-border funding. By the tip of 2021, 61 QFLP transactions had been completed, bringing in US$763 million. Forty-five QFLP funds have been established, with a complete registered capital of US$5.11 billion and a cross-border capital influx of US$636 million.

To additional facilitate cross-border financing, the Hainan authorities eradicated the requirement that non-financial corporations register their overseas money owed on a case-by-case foundation. In 2021, the State Administration of Overseas Alternate’s Hainan department finalized the once-and-for-all registration of 34 companies’ overseas loans totaling US$13.352 billion.

Furthermore, the provincial authorities has developed and improved a number of mechanisms for supporting micro, small, and medium-sized enterprises (MSMEs), in addition to incentive applications for various monetary establishments. By supporting MSMEs’ financing via government-funded funding, mortgage threat compensation, and financing ensures, Hainan has tried to boost its fiscal methods to encourage industrial development

Digital financial system

Since 2021, Hainan’s digital financial system has skilled super growth. With internet-based enterprises producing greater than RMB 150 billion (US$20.67 billion) in income, every year and taxes paid to complete RMB 5.8 billion (US$799.38 million), rising 15.5 % year-on-year – the creation of high-tech Hainan FTP has seen some preliminary success.

In industrial parks just like the Resort Software program Group of Hainan, quite a few well-known internet-based companies have established workplaces. The driving vitality of the digital financial system has been additionally led by cell apps, together with Haiyiban (a web-based grocery store offering idle land plots), the digital authorities service portal, the Hainan Public Service Platform of Instructional Assets, and the Hainan Points of interest app.

To realize sooner digitalization, Hainan has been steadily growing the capability of its digital infrastructure, beginning the constructing of world communication infrastructures, and offering institutional and coverage assist. Corporations within the digital sector can lower their working bills by investing in Hainan and concentrating on the development of high-tech and AI. Insurance policies such because the low tax charges will additional entice high-tech companies and professionals to maneuver to Hainan.

Petrochemicals

Oil and gasoline exploration, processing, transportation, storage, and buying and selling have all come collectively to kind a full industrial chain. To create a brand new built-in development combine with upstream exploration, midstream processing, thorough use, and downstream new supplies manufacturing, Hainan will additional prolong the commercial chain and enhance high-tech involvement.

The federal government has arrange regional headquarters in Haikou and a service base in Chengmai to hurry up the transformation of the district of Dongfang into a brand new materials base with pure gasoline chemical merchandise, and the world of Yangpu into a brand new materials base with a hundred-billion-level new petrochemical materials base with worldwide affect.

Estimates anticipate that by 2025, the gross worth of the Hainan petrochemicals sector will attain RMB 200 billion (US$27.56 billion).

Aerospace

Hainan is dwelling to the Wenchang Satellite tv for pc Launch Middle – China’s first coastal launch website and one of many few low-latitude launch websites worldwide.

To revitalize the aerospace industries in Hainan, the Hainan authorities has signed a number of framework agreements and strategic cooperation agreements with China Aerospace Science and Expertise Company, China Aerospace Science and Trade Company Ltd., and the Chinese language Academy of Sciences.

Preferential insurance policies supplied in Hainan FTP

The FTP grasp plan set out the blueprint for the preferential insurance policies, which was translated to particular insurance policies by the Announcement of Hainan Provincial Tax Service, State Taxation Administration on Points Referring to Company Earnings Tax Incentives for Hainan Free FTP, the Discover of Hainan Provincial Folks’s Authorities on Promulgation of the Provisional Measures of Hainan Free Commerce Port for the Listing-based Administration of Excessive-end Expertise and Expertise in Brief Provide Who Are Entitled to Preferential Particular person Earnings Tax Insurance policies,  Hainan FTP Rules on Worldwide Vessels, the Hainan FTP Rules on Social Credit score, the Hainan FTP Rules on Enhancing Enterprise Setting, and the Hainan FTP Rules on Honest Competitors, and so forth.

On June 10, 2021, the Hainan FTP Legislation was enacted, changing present coverage incentives into legislative actuality and offering authorized ensures for numerous future reforms. The Hainan FTP Legislation contains eight chapters overlaying all of the areas concerned within the port’s development, together with the liberalization and facilitation of commerce and funding, fiscal and taxation methods, environmental protections, industrial improvement and expertise assist, and different complete measures.

Commerce liberalization and facilitation

The Hainan FTP ensures to “set up a particular customs supervision zone system of Hainan FTP for impartial customs operations all through Hainan Island”.

For cross-border commerce in items, in keeping with the masterplan, Hainan FTP will arrange a “first line” to abroad nations and areas, and a “second line” to the Chinese language mainland.

In precept, the primary line might be open – items, besides these on Listing of Items and Articles Prohibited or Restricted from Import and Export at Hainan FTP (anticipated to be launched by the tip of 2023), might be freely imported and exported between abroad areas and Hainan FTP beneath customs’ particular supervision.

And the second line might be extra tightly managed – items coming into the Chinese language mainland from Hainan will undergo procedures in accordance with related import rules, customs duties, and taxes.

For cross-border commerce in service, Hainan adopts a unfavorable record for cross-border companies in commerce—in 2021, the Ministry of Commerce issued the Particular Administrative Measures for Cross-border Commerce in Providers in Hainan Free Commerce Port (Detrimental Listing).

Below this Hainan’s unfavorable record for cross-border companies in commerce, abroad service suppliers are usually not allowed to supply the companies prohibited by the record via the cross-border provide, consumption overseas, and motion of pure individuals in the entire Hainan Island.

However on the identical time, it implies that unlisted financial actions are thought of allowed, and home and abroad companies suppliers ought to get pleasure from a degree enjoying discipline and equal market entry in unlisted sectors.

Funding liberalization and facilitation

Funding-wise, Hainan will launch the “most-streamlined-approval system” for funding, implement simplified unfavorable record for overseas funding and particular measures for enjoyable market entry, and steadily undertake the “system of market entry upon dedication”.

On February 1, 2021, Hainan adopted the Particular Administrative Measures for the Entry of Overseas Funding in Hainan Free Commerce Port (2020 Version), additionally dubbed because the “FI Detrimental Listing for Hainan FTP”, which expanded market entry to overseas funding in a number of sectors, equivalent to telecommunications, training, enterprise companies, manufacturing, and mining, in Hainan FTP.

As well as, to additional enhance enterprise and funding atmosphere, a extra handy visa coverage might be carried out for overseas expertise and expatriates. Presently, Hainan gives a free visa coverage for overseas nationals from 59 completely different nations, who can keep within the island province for a complete of 30 days. The Haikou Meilan Worldwide Airport, Sanya Phoenix Worldwide Airport, and all ship ports qualify for the 30 days visa exemption.

Preferential tax incentives

Hainan FTP gives a number of preferential tax insurance policies to encourage commerce and funding. Based on official plans, China goals to launch island-wide impartial customs operations and implement a simplified tax regime in Hainan by round 2025.

• Zero tariffs: Earlier than the island-wide impartial customs operations, some items imported from abroad topic to record administration (one zero-tariffs unfavorable record and three constructive lists) might be exempt from import duties, value-added tax (VAT), and consumption tax. Following the completion of impartial customs operations of Hainan FTP (round 2025), all items imported from abroad might be exempt from import duties, aside from these listed within the to-be-formulated Detrimental Listing of Commodities Topic to Import Taxes and items prohibited from importing into Hainan by regulation. To be famous, items coming into the Chinese language mainland from Hainan FTP are nonetheless topic to import taxes; nevertheless, items produced by inspired industrial enterprises that don’t include imported supplies or include the imported supplies however attain a sure proportion (30 %) of value-added processing in Hainan FTP might be exempt from import tariff.
• Lowered company revenue tax charge of 15 % : Corporations with a confirmed monitor file of “substantive operations” registered within the Hainan FTP are eligible for company revenue tax (CIT) charge of 15 % – decrease than the statutory CIT charge in China at 25 %. By “substantive operation”, authorities confer with the precise administration of the enterprise, such because the board of administrators and board of shareholders, who must be based mostly in Hainan FTP and should implement substantive administration and management over the enterprise’s manufacturing and enterprise operations, workers, accounts, and properties from Hainan. Earlier than the island-wide impartial customs operations, the companies operations should fall within the class of the inspired industries of Hainan to be eligible for the CIT incentive. The revenue from the primary enterprise of the enterprises should be equal to at the very least 60 % or extra of their complete revenue. Following the island-wide impartial customs operations, this coverage might be expanded to all trade sectors, besides these on Hainan FTP’s funding unfavorable record.
• CIT exemption on abroad revenue: Enterprises of tourism, fashionable service, and high-tech sectors registered in Hainan FTP are exempt from paying CIT on revenue from new abroad direct funding between January 1, 2020 and December 31, 2024, by satisfying the stipulated standards.
• One-off pre-tax deduction or accelerated depreciation and amortization for newly bought property: Hainan-registered enterprises are allowed to speed up the pre-tax deduction of the price of mounted property (excluding constructing) or intangible property which are acquired between January 1, 2020 and December 31, 2024. This coverage is much like the nationwide one concerning depreciation and amortization for newly bought property. Nevertheless, Hainan’s accelerated depreciation/ amortization regime for eligible capital expenditure is extra relaxed as a result of the nationwide one solely covers mounted property, whereas Hainan’s coverage covers each mounted property and intangible property.
• IIT incentives: Throughout the interval from January 1, 2020, to December 31, 2024, for certified high-end and urgently wanted abilities working at Hainan FTP (each overseas and home abilities) can get pleasure from a partial particular person revenue tax (IIT) exemption. That’s, the portion of the IIT exceeding 15 % of their taxable revenue might be exempt. Overpaid tax might be refunded to the expertise instantly after the expertise completes the annual IIT reconciliation. From 2025 to 2035, Hainan FTP will restrict the progressive IIT charges on complete revenue and enterprise revenue to three %, 10 %, and 15 %. The traditional progressive IIT charges nationwide are: 3 %, 10 %, 20 %, 25 %, 30 %, 35 %, and 45 % for complete revenue and 5 %, 10 %, 20 %, 30 %, and 35 % for enterprise revenue for certified people residing in Hainan. Hainan’s IIT incentives are extra preferential than these supplied in GBA in some respects.

The place to speculate: key improvement zones in Hainan FTP

The complete island of Hainan is included within the Hainan FTP’s implementation space. Eleven main industrial parks had been constructed with the Hainan FTP and can function testing grounds and pilot zones for rules pertaining to it.

Yangpu financial improvement zone

The Yangpu Financial Improvement Zone, which lies northwest of Hainan, was the primary nationwide financial improvement zone in China to get Deng Xiaoping’s approval in 1992 for steady improvement by overseas traders beneath the bonded zone coverage. It additionally represents the junction between the brand new Western Land-sea Hall and the twenty first Century Maritime Silk Highway. The Bonded Port Space of Yangpu, which is often known as a prototype of the FTP, will function a pilot demonstration zone for it.

Full with mature public services, equivalent to public ports, normal factories, validation platforms, in addition to residential services, it focuses on attracting funding within the following sectors:

• Providers associated to the useful resource exploration of the South China Sea: Marine engineering, port development and operation, South China Sea useful resource discovery companies, and a petroleum product commerce heart.
• Petrochemicals and supporting industries: Ethylene, propylene, styrene, ethylene oxide, propylene oxide, OX downstream items, rubber and plastics manufacturing, and industrial gasoline.
• Bonded port-focused companies: Export-focused processing, logistics-driven warehousing, show, worldwide procurement, and commodities buying and selling.
• Superior manufacturing: Tools manufacturing, printing, and packaging.

The world gives a number of unique preferential insurance policies, together with:

• The unique use of “Yangpu Port of China” as a port of registry.
• Permit ships to refuel with bonded oil whereas carrying each home and overseas commerce items.
• Tax rebate at port departure.

Boao Lecheng Worldwide Medical Tourism Pilot Zone

Boao Lecheng Worldwide Medical Tourism Pilot Zone, as the one “particular medical zone” in China to comprehend opening-up within the medical fields, has attracted home and overseas high-end medical vacationer companies and cutting-edge medical analysis outcomes from everywhere in the world and has created an industrial cluster of worldwide medical companies. In Lecheng, greater than 20 medical establishments have opened for enterprise, and one other 10 establishments are set to hitch the league, specializing in fields like most cancers prevention and therapy, beauty medication, anti-aging, well being administration, and rehabilitation.

The Boao Lecheng Worldwide Medical Tourism Pilot Zone focuses on the availability of the next companies:

• Medical companies: Therapy for most cancers, regenerative medication, orthotics (joint) therapy, dentistry, integration of conventional Chinese language medication (TCM) and Western medication, and many others.
• Well being administration: Facilities for well being administration, medical examinations, a global maternity hospital, rehabilitation, medical cosmetics, and anti-aging therapies are all examples of those services.
• Well being companies: Boao Worldwide Well being Discussion board, Boao Medical Data Platform, and medical tourism intermediate service platform are examples of worldwide medical and well being organizations.

Haikou Jiangdong New District

Haikou Jiangdong New District is positioned on the East coast of Haikou. The district contains an built-in urban-rural combine, with a complete deliberate protection of 298 sq. kilometers.

The world gives a number of unique preferential insurance policies, together with:

• RMB 3 million (US$413,473) one-time incentives for newly established regional headquarters of worldwide organizations; RMB 2 million (US$275,649) one-time incentives for newly established regional headquarters of cross-border companies (establishments).
• RMB 10 million (US$1.37 million) one-off reward for newly established complete (regional) headquarters of high-tech or different companies that belong to the secondary trade and promise to contribute at the very least RMB 30 million (US$4.13 million) financially to the native financial system throughout the first 12 months of its registration; RMB 5 million (US$689123) one-off rewards for newly established complete (regional) headquarters of vacationer or different companies that belong to the tertiary trade.
• RMB 2 million (US$275,649) one-time incentive for newly established, quickly creating headquarters in key sectors.

Haikou Nationwide Excessive-Tech Improvement Zone

The only national-level high-tech zone within the province of Hainan was shaped in 1991 with a deliberate protection of 85.44 sq. kilometers. It manages Mei’an Eco-tech New Metropolis, Medical Valley Industrial Park, Shiziling Industrial Park, Haima Industrial Park, Yunlong Industrial Park, Mission Hills Resort, and West Coast Headquarters Financial Zone with a “seven parks in a single zone” structure. It’s the solely industrial space within the Hainan Free Commerce Port (FTP) that mixes the “vacationer, modern service, and high-tech trade” three industrial pillars.

With a deal with bio pharmacy, eco-friendly industries, superior manufacturing, digital financial system, and fashionable companies, the zone presents a number of sector-specific preferential insurance policies, together with:

• Pharmacy: Initiatives which have been declared and commercialized in Hainan and are included within the nationwide large initiatives of considerable new remedy improvement are eligible for prizes of as much as RMB 10 million (US$1.37 million). Bonuses of as much as RMB 12 million (US$1.65 million) are given for introducing Sort I novel drugs into analysis or for his or her commercialization on worldwide markets.
• Headquarter financial system: One-time incentives of RMB 10 million (US$1.37 million) can be found to high-tech or different companies within the secondary sector that has simply relocated their regional headquarters and pledge to make an preliminary monetary contribution to the neighborhood of at the very least RMB 30 million (US$4.13 million) throughout the first 12 months of registration.
• Sustainable financial system: Full biodegradable materials corporations will obtain one-time incentives of RMB 1 million (US$137,824), RMB 3 million (US$413,473), RMB 5 million (US$689,123), and RMB 8 million (US$1.1 million) when their annual essential enterprise revenue exceeds RMB 100 million (US$13.78 million), 300 million (US$41.34 million), RMB 500 million (US$68.91 million), and RMB 1 billion (US$137.82 million), respectively.

Hainan FTP funding outlook

The Hainan FTP will present new probabilities for overseas traders keen to participate in China’s development due to its interesting funding pitch, inspired industries, and advantageous tax rules. The Hainan FTP welcomed 1,936 new overseas corporations in 2021 alone, representing a development of 92.6 % year-on-year. Extra home and overseas traders are already getting ready to start operations on the island to utilize the profitable benefits accessible at this early stage.

All in all, there are a number of elements why overseas companies could set up themselves in Hainan. These embrace:

• Favorable location and high quality of life: Hainan has turn out to be a preferred journey vacation spot due to its distinctive pure benefits and an abundance of tourism assets, together with tropical coastal areas, unspoiled tropical rainforests, geothermal scorching springs, and wealthy ethnic customs. The proportion of days with fairly excessive ranges of air high quality reached 99.4 % in 2021.
• Preferential insurance policies: The development of the Hainan FTP, a large-scale plan to rework your entire island province right into a free commerce port, will contribute to remodeling the island province into the biggest particular financial zone in China. Overseas funding firms in Hainan have saved up the momentum of its fast development, so the construction of overseas funding has been additional optimized, overlaying 18 industries incorporating wholesale and retail, leasing and enterprise companies, and knowledge transmission, software program and knowledge expertise companies. As of 2022, foreign-funded enterprises account for almost all of newly established enterprises within the province.
• World presence: The island has earned its worldwide recognition for holding main occasions, together with the Hainan Expo, the Boao Discussion board for Asia, a BRICS summit, the primary Lancang-Mekong Cooperation Chief’s Assembly, and a Roundtable Convention on China-Africa Cooperation. Hainan has pleasant regional ties with the US state of Washington, in addition to sister bonds with 39 different areas from completely different nations.

Hainan has already paved its method to changing into a profitable pilot free commerce zone, with some folks arguing that the province island could even occupy Hong Kong’s main place as China’s prime free commerce port zone. That is significantly true when contemplating the appreciable funding that went into changing Hainan into an FTP zone.

Overseas traders could think about coming into Hainan’s profitable tourism trade and associated sectors like worldwide enterprise consulting, software program improvement, and human assets, making the most of the favorable tax coverage, incentives, and benefits.