A fleet of developments driven by the policies of the Hainan FTP

Since the publication of the master plan for the development of the Hainan Free Trade Port, China’s southernmost island province has implemented over 180 policy documents related to the comprehensive reform and opening up of the FTP. Those policies quickly began to pay off, and early results are already on the board.

Three “zero-tariff” lists expand capacity and increase efficiency

After the implementation of the Hainan FTP’s three “zero-tariff” lists for imported raw and auxiliary materials, vehicles and yachts for commercial operations, and equipment for internal production, Haikou Customs has overseen a total of 16.356 billion yuan (about $2.35 billion) in “zero tariff” imports as of the end of April, 2023.

The Haiqi Group’s imported “zero-tariff” vehicles. (Photo: Hainan Daily)

That’s not all. Even more tax policy benefits are showing up in the Hainan FTP.

The benefits of the “two 15%” income tax policies (a preferential 15% corporate income tax for certain enterprises and a 15% cap on individual income tax for high-end talent) continue to grow. In comparison with the national version, the Hainan FTP list of encouraged industries has 143 more entries. In 2022, the Hainan FTP’s “15% income tax” increased benefits by 122.7% for individuals and 35.7% for corporations.

The spending quotas for Hainan’s island departure duty free policy continue to go up. In 2020, the quota was raised to 100,000 yuan per person annually, and the categories of eligible duty-free products were increased to 45, with all travelers departing the province welcome to participate no matter their method of transportation.

Shoppers purchase items at the CDF Haikou Duty Free Shop at Mova Mall.(Photo: Hainan Daily)

Making trading and investing more free and convenient

Investment freedom and convenience is an important feature of a free trade port. Over the past few years, Hainan has continued to accelerate FTP policy implementation, making the province more and more attractive for investors.

Since China’s first cross-border service trade negative list was released in Hainan, as of March 2023, a total of 22 measures have been put in place to open up market access in the province. Hainan has thrown its weight behind the implementation of the "Special Management Measures for Foreign Investment Access in Hainan Free Trade Port (Negative List)" and other related regulations that have made Hainan’s negative access list for foreign investment the shortest in the nation.

Thanks to the island’s successful implementation of these special measures to increase market access, in the first quarter of 2023 over 200,000 new operating entities were added in Hainan, a growth rate that has remained the highest in the country for 37 consecutive months.

In 2022, Hainan’s new offshore international trade foreign related revenues and expenditures totaled 18.45 billion USD, and foreign related revenues and expenditures in trade in goods amounted to 40.91 billion USD, 3.5 times and 3.6 times the volumes in 2018, respectively.

The Yangpu Economic Development Zone International Container Terminal. (Photo: Hainan Daily)

There are currently a total of 42 ships operating at Yangpu and enjoying Hainan’s “zero-tariff” import policies, which have exempted a total of over 1.02 billion yuan ($0.14 billion) in tariffs and value added import taxes to date. Meanwhile, 39 international ships with a combined deadweight of over 5.2 million tons have been registered in the “China Yangpu Port.”

A one-way recognition list system for overseas professional qualifications has been set up, and a more open talent introduction and residence policy has been introduced. A “one-stop” talent service counter has also been opened. These measures continue to attract more talented personnel from across China and around the world to come to Hainan to take advantage of the innovation and entrepreneurship opportunities available here.

Staff at Haikou’s Meilan International Airport assist travelers with visa-free entry procedures. (Photo: Hainan Daily)