What is the Hainan Free Trade Port?

The Hainan Free Trade Port (FTP) is a special economic zone (SEZ) that was established in 2020. The FTP is located on the island of Hainan, which is located in the South China Sea. The goal of the FTP is to transform Hainan into a world-class free-trade hub similar to that of Singapore and Hong Kong.

The FTP is a special economic zone (SEZ) that operates under a different set of laws and regulations than the rest of China. For example, businesses operating in the FTP are not subject to the same restrictions on foreign investment as businesses operating in other parts of China. The FTP is established in 34,000 square kilometres of land, which makes it the largest of its kind in the world.

History of the Hainan Free Trade Port:

In June 2021, the Hainan Free Trade Port Law of PRC took effect a year after China announced its major plans for Hainan. The goal is to implement a series of policies that will transform Hainan into a world-class free-trade hub similar to that of Singapore and Hong Kong. It is important to note however that the FTP is still in its early stages of development. It will take time for Hainan to reach that level of development.

The greatest advantage that the Hainan FTP offers is the exemption of goods usually prohibited from being imported or exported. It is important to note however, that there are still some restrictions on trade in the FTP. For example, goods that are considered to be of national security interest are still subject to restrictions.

Other overseas merchandise will also be allowed free trade after 2025. Goods exported overseas from the Hainan FTP will still be subject to export and tax regulations. However, merchandise not on the import taxation list can be imported tariff-free. Goods entering the Hainan FTP from mainland China will also be handled according to domestic regulations.

The Chinese government aims to make Hainan a key destination for commerce, attracting shoppers and business players away from other major ports like Hong Kong. Foreign investors can invest in Chinese private equity products, along with being able to transfer capital into and out of the country, as long as it is within the provided limits.

The Hainan FTP is also a testing ground for innovative real estate policies. The finance ministry has been considering enforcing property taxes to stabilize market prices, and Hainan will be a good candidate for an initial testing phase of the policy. If deemed successful, programs implemented in the Hainan FTP will be brought to mainland China.

What are the Benefits of the Hainan Free Trade Port?

The Hainan Free Trade Port offers many benefits to businesses and investors. Some of these benefits include:

Relaxed Regulations:

Reduced taxes: Companies registered inside the Hainan FTP benefit from a lower corporate tax rate of 15%. They are also exempt from paying tax duties on the initial importation of goods into China.

Relaxed regulations: Customs procedures in the FTP have been simplified and streamlined. Foreign exchange controls have also been relaxed, and Hainan FTP bank accounts can be held in multiple currencies. Foreign investment caps have been lifted in certain industries, such as international maritime transport, breeding of new vegetable varieties, and seed production of new variants.

Foreign investors will have greater access and opportunity to invest in numerous key sectors not usually available to them including telecommunications, tourism, and education.

Foreign investment caps will be lifted in certain areas like international maritime transport, breeding of new vegetable varieties, and seed production of new variants.

Easier Access to the Chinese Market:

A series of preferential policies have been implemented to make it easier for overseas brands to enter the Chinese market. The FTP has also promoted global trade exchanges, which has accelerated the introduction of foreign products to China.

What are the Investment opportunities in the Hainan Free Trade Port?

The Hainan Free Trade Port offers many investment opportunities for businesses and investors. Some of these opportunities include:

Tourism and Hospitality: The Hainan FTP specifically encourages the sectors of tourism/hospitality. The government has implemented a number of policies to promote tourism in the FTP, including visa-free entry for certain countries and tax breaks for tourism businesses.

Real Estate: Hainan FTP will be a testing ground for innovative real estate policies. The government is experimenting with a number of new policies, such as allowing foreigners to own property in the FTP and providing tax breaks for real estate developers.

Manufacturing: The zero-tariff regime will be fully established by 2025, allowing a wide range of goods to be imported into the FTP with zero tariffs. Import VAT and consumption tax exclusion may also apply. This makes the FTZ an attractive destination for manufacturing businesses that want to avoid paying tariffs on imported goods.

Education: Foreign investors will have greater access and opportunity to invest in numerous key sectors not usually available to them including education. The government has relaxed the restrictions on foreign investment in education, making it easier for foreign investors to start or invest in schools.

Healthcare: The government has relaxed the restrictions on foreign investment in healthcare, making it easier for foreign investors to start or invest in hospitals and clinics in the FTP.

Culture and Tourism: The Hainan FTP specifically encourages the sectors of culture and tourism. The government has invested heavily in developing the cultural and tourism infrastructure, making it an attractive destination for businesses that want to cater to tourists and residents.

Culture and Tourism in the Hainan Free Trade Port:

The Hainan Free Trade Port offers a range of opportunities for businesses and investors in the tourism industry. With its beautiful beaches and rich culture, the port is an attractive destination for tourists.

In addition to its natural beauty, the port also offers duty-free shopping, cultural immersion, and medical tourism. These features make the Hainan Free Trade Port a prime location for businesses looking to invest in the tourism industry.

• Beautiful beaches: Hainan is known for its beautiful beaches, which are popular with tourists from all over the world.

• Tropical climate: Hainan’s tropical climate makes it an attractive destination for tourists year-round.
• Rich culture: Hainan is home to a rich culture that a variety of ethnic groups (including the Li and Miao), each with its own unique customs and traditions.
• Duty-free shopping: The FTP offers duty-free shopping, which is a major draw for tourists.
• Cultural immersion: The FTP offers a variety of opportunities for cultural immersion, such as visiting museums, temples, and other cultural attractions.
• Medical tourism: The FTP is a major destination for medical tourism, due to its high-quality healthcare facilities and affordable prices.

The Hainan Free Trade Port (FTP) is a new and exciting development that has the potential to revolutionize the economy of Hainan and China as a whole. The FTP offers a number of benefits to businesses and investors, including reduced taxes, relaxed regulations, and easier access to the Chinese market. The FTP is also expected to boost tourism and cultural exchange between Hainan and the rest of the world.

Despite its early stages of development, the FTP is already attracting significant interest from businesses and investors. The Chinese government is committed to developing the FTP into a successful free-trade hub, and it is investing heavily in infrastructure and regulations to make it an attractive destination for businesses.

If the FTP is successful, it could have a major impact on the global economy. The FTP could become a major centre for trade, investment, and tourism, and it could help to boost economic growth in China and the region.

Related article: How to Set Up a Company in Hainan Free Trade Port, a Complete Guide