Things one should know about Hainan FTP's island-wide special customs operations

en.hainan.gov.cn

Updated: 2025-07-18

A flurry of cargo handling and vessel movements fill the container terminal, with large ships lined up along the berths at Haikou Port. [Photo/VCG]

Editor's Note: China's Hainan Free Trade Port (FTP) will officially begin island-wide special customs operations on Dec 18, 2025, marking a major milestone in the country's push for higher-level openness.

Definition of special customs operations

Specifically in the context of the Hainan FTP, it refers to a new customs management system designed to facilitate the free flow of goods, capital and talent between Hainan and the global market.

Start date

Dec 18, 2025

Location

Hainan island-wide

Key aspects

1. Open up the "first line" zones between Hainan FTP and areas outside the borders of China's mainland

2. Regulate the "second line" zones between Hainan FTP and China's mainland

3. Freedom on the island

Explanation

1. It forms the basis for the comprehensive construction of Hainan FTP.

2. It does not imply isolation but rather the vitalization of free trade within the island.

3. The regulations primarily apply to goods and commodities. People traveling between Hainan and other regions within the country will not be affected in any way.

Difference in the zero tariff principle before and after special customs operations

Before	After
Some imported goods should be exempted from import tariff, import value-added tax and consumption tax	The goods excluded in the catalog of taxable imported goods and importable goods by Hainan FTP are exempted from import tariff

Impacts of special customs operations on people

On Hainan island

· Convenient entry and exit for business and trade activities

· Zero tariffs on most imports

· The lowest individual income tax in the country

· …….

Outside Hainan island

· Reduced cost of starting a business

· Increased investment opportunities

· Enjoy discounts on shopping while traveling

· …….

Reasons to choose Hainan for investment and trade

* The only free trade port in China

* Shortest negative list for foreign investment

* Support from the government

* One-stop services such as China (Hainan) International Trade Single Window and One-stop Service for Investment in Hainan

* "4+3+3" Modern Industrial System

4 Leading Industries

Tourism

Modern Services

High-tech Industry

High-efficiency Tropical Agriculture

3 Future-oriented Industries

Seed Industry

Deep Sea

Aerospace

3 Consumer Industries

High-end Shopping

Healthcare

Education

Achievements in the five years since the release of the Master Plan for the Construction of Hainan Free Trade Port

Design of institutional system at the Hainan FTP

(I) Free and convenient trade

1. Open up the "first line"

2. Regulate the "second line" well

3. Freedom on the island

4. Promote free and convenient trade in services

(II) Freedom and convenience of investment

5. Implement the "market access upon commitment" system

6. Innovate and improve the system of investment freedom

7. Establish and improve the fair competition system

8. Improve the system of property rights protection

(III) Free and convenient cross-border capital flow

9. Establish a multifunctional free trade account system

10. Facilitate the capital flow of cross-border trade and investment

11. Further open up the financial industry

12. Speed up financial reforms and innovations

(IV) Access freedom and facilitation

13. Access facilitation should be provided to high-end talent of foreign nationalities in terms of investment and start-ups, lecturing and exchanging activities, and business and trade.

14. Establish and improve talent service and management system. Efforts should be made to realize the linked approval and linked inspection of information on work permit, visa, and stay and residence.

15. Implement more convenient entry and exit management policy

(V) Transportation freedom and facilitation

16. Establish more free and open shipping system

17. Advance transportation facilitation and service guarantee level

(VI) Secure and orderly data flow

18. Orderly opening-up of communication resources and businesses

(VII) Modern industrial system

19. Tourism. Ecological and green development should always be put first.

20. Modern service industry. Efforts should be made to pool global innovation elements, deepen opening-up, both inwardly and outwardly, and attract transnational companies to set up their headquarters at the port.

21. High-tech industries. By focusing on platforms and carriers, industrial capacity and scale should be proliferated and prioritize the development of the IoTs, AI, blockchain, digital trade and other information industries.

(VIII) Tax system. A tax system that is applicable to high-level free trade ports should be established step by step according to the principles of zero tariff, low tax rate, streamlined tax structure, strengthened law enforcement and phased implementation.

22. Zero tariff

23. Low tax rate. Preferential corporate income tax rates should be applied to enterprises running their businesses at Hainan FTP, and preferential individual income tax rates should be applied to eligible individuals.

24. Streamlined tax structure. Efforts should be made to explore ways for streamlining the tax structure by combining with the orientation of China's tax reform.

25. Strengthened law enforcement. Tax administration departments should assess the tax payment behavior based on the places where substantial economic activities take place and value is created and publish early warnings.

26. Phased implementation. This means implementation of arrangements on zero tariff, low tax rate and streamlined tax structure according to the different phases of building Hainan FTP and eventually creating an internationally competitive tax system.

(IX) Social governance

27. Deepen the reform of government institutions

28. Promote transformation of government functions

29. Create a social governance pattern of joint construction, joint governance and sharing

30. Innovate the ecological civilization system and mechanism

(X) Rule of law

31. Formulate and implement the Hainan Free Trade Port Law

32. Formulate laws and regulations of the special economic zone

33. Establish a diversified settlement mechanism for commercial disputes

(XI) Risk prevention and control system

34. Trade risk prevention and control

35. Investment risk prevention and control

36. Financial risk prevention and control

37. Prevention and control of network security and data security risks

38. Prevention and control of public health risks

39. Ecological risk prevention and control

Sources: Master Plan for the Construction of Hainan Free Trade Port, CGTN and CCTV