A Brazilian, chasing an entrepreneurial dream in China, gives a thumbs-up to the business environment, in Haikou, South China's Hainan province. [Photo/VCG]

Hainan Free Trade Port's core pillar of the province's high-level opening-up policy framework covers six key areas, namely trade, investment,cross-border capital, personnel, transportation and data, according to the 2025 Hainan Free Trade Port Investment Guide. What does the open policy framework contain?

I Trade liberalization and facilitation

Trade in Goods: The Hainan FTP has established a free and convenient trade policy framework characterized by "free flow across the first line and strict supervision across the second line".

First line (between Hainan FTP and areas outside the borders of China's mainland): Goods and items outside the prohibited or restricted list can flow freely through the first line. Imports outside the dutiable goods catalog are tariff-exempt, with customs supervision based on law.

Second line (between Hainan FTP and China's mainland): Goods entering China's mainland from Hainan are managed per existing import regulations.

Trade in Services: Adopts the Negative List for Cross-Border Trade in Services of Hainan FTP, which lists 70 special management measures across 11 categories for overseas service providers. Equal market access is granted for sectors outside the list.

Key opening-up areas:

Logistics: Restrictions are lifted on overseas ship inspection agencies operating in China without local subsidiaries.

Professional Services: Hainan law firms may hire foreign and China's Hong Kong-Macao lawyers as legal advisors; restrictions are lifted on foreign entities engaging in customs declaration services.

Finance: Overseas individuals can open securities or futures accounts and apply for investment consulting qualifications.

II Investment liberalization and facilitation

China's shortest negative list is introduced for foreign investment access, relaxing restrictions in key sectors:

International Education: Overseas high-level universities, vocational schools specializing in science, engineering, agriculture and medicine are permitted to open and operate independently in Hainan.

Digital Economy: Foreign investment restrictions are lifted on online data processing and transaction processing business; enterprises registered or with service facilities in Hainan are allowed to provide Internet Data Center and Content Distribution Network services in Hainan and internationally.

Legal Services: Permit foreign investment in certain non-litigious commercial legal affairs related to Hainan.

Mining: Bans removed on foreign investments in rare earth, radioactive minerals, and tungsten exploration, mining and beneficiation; equal treatment given to domestic and foreign investment based on national and provincial mining measures.

III Free and convenient cross-border capital flow

Hainan implements a high-level opening-up policy for cross-border trade and investment, facilitating more business entities to handle cross-border trade and investment transactions in compliance with regulations.

Current Account: Facilitates foreign exchange settlement, supports new international trade settlement, expands netting settlement scope for trade, exempts special refund registrations and optimizes the management of advances for another or installments in service trade.

Capital Account: Foreign-funded enterprises are exempt from domestic reinvestment registration; parent-subsidiary leasing companies share foreign debt quotas; banks handle certain capital account foreign exchange registrations directly.

A Brazilian chases entrepreneurial dream in Haikou, South China's Hainan province. [Photo/VCG]

IV Free and facilitated flow of people

Visa Exemptions:

The expanded Hainan FTP's visa-waiver policies allow ordinary passport holders from 86 countries to enter Hainan without a visa, the most favorable visa-free arrangement in China.

Talent Support: Opens 38 professional qualification exams to overseas personnel; unilaterally recognizes 219 overseas professional qualifications.

V Free and convenient transportation

Air Rights: Grants 5th and 7th freedom rights for passenger and cargo airlines. Foreign airlines can use Hainan as a base to operate routes between Hainan and third countries.

The 5th freedom right for passenger and cargo airlines refers to the right of a carrier of one country to pick up and transport passengers or cargo in a third country while operating an international route. It is also known as the "third-country traffic right".

The 7th freedom right for passenger and cargo airlines means that the aircraft of a country can carry passengers, goods and mail between two countries or regions outside its own country or region.

Ship Registration: Ships built in China and registered at "Yangpu Port (CN YPG)" for international transportation are deemed exports and eligible for VAT refunds.

VI Safe and orderly flow of data

Infrastructure Upgrades: In Nov 2024, Hainan became the 4th place, after Beijing, Shanghai and Guangdong, with international communication gateways for all three major telecom operators, namely, China Telecom, China Mobile and China Unicom, reducing transmission distance by about 1,000 kilometers and latency by around 5 milliseconds.

Major Milestones

Feb 8, 2025: The 2024 Negative List for Cross-Border Data Transfers released, covering 5 sectors, including deep-sea research, aerospace, seed technology, tourism and duty-free retail.

December 2024: Approved as a National Comprehensive Pilot Zone for Data Elements.

November 2024: Enacted China's only provincial-level Regulations on the Development of International Data Centers in Hainan FTP.

Dedicated Cross-Border Data Channels: Developing channels linking Hainan-Hong Kong and Hainan-Singapore-Hong Kong-the Philippines-Thailand-Malaysia to support services like gaming, telemedicine, and cross-border e-commerce.

Sources: 2025 Hainan Free Trade Port Investment Guide, Civil Aviation Administration of China and Sanya Tourist Board