https://www.tropicalhainan.com/hainan-ftp-business-forum/incentives-taxes-finance/ Hainan's English-language community forum. Ask questions, share experience, and find answers on life, work, and business in the Hainan Free Trade Port — from people who actually live here. en-US Wed, 22 Apr 2026 04:52:30 +0000 wpForo 60 https://www.tropicalhainan.com/hainan-ftp-business-forum/incentives-taxes-finance/rules-for-incremental-reward-for-rd-funds-for-high-tech-enterprises-in-hainan-province/ Mon, 20 Dec 2021 06:54:11 +0000 Rules for Incremental Reward for R&D Funds for High-tech Enterprises in Hainan Province



Detailed rules for reward of R&D fund increment of high-tech enterprises in Hainan Province



Release time: 2021-08-17,



Source: Hainan Provincial Government Website



Detailed rules for reward of R&D fund increment of high-tech enterprises in Hainan Province



Article 1: in order to regulate the management of incremental incentives for R&D expenses of high-tech enterprises, these rules are formulated in accordance with the Interim Measures for the Management of Special Funds for the Development of High-Tech Industries in Hainan Province.



Article 2: the subsidy funds mentioned in these Detailed Rules refer to the funds in the special funds for the development of high-tech industries arranged by provincial finances.

The budget of the provincial science and technology management department is used to support the incremental reward of R&D expenditures for high-tech enterprises (including high-tech enterprise cultivation Library enterprises).



Article 3: the Provincial Department of science and technology shall be responsible for the management of the subsidy funds, organize the application, review and summary of special allocating funds, and prepare funding plans; supervise and inspect the use of subsidy funds, carry out performance evaluation and later management. The science and technology management departments of all cities and counties are responsible for the acceptance of fund applications, preliminary examination, application to the Provincial Department of science and technology, fund allocation, cooperation with the Provincial Department of science and technology in the supervision and management of funds, etc.

  

Article 4: the incremental reward standard for R&D funds for high-tech enterprises (including incubator enterprises) shall be implemented in accordance with several policies of Hainan Province to support the development of high-tech enterprises (Trial) (Qiongfu No. 50) and the three-year action plan of Hainan Province for scientific and technological innovation (2021-2023).

 

Article 5: the R&D expenses shall be subject to the "deduction of R&D expenses" in the enterprise income tax return, and increment is calculated based on the difference between the previous two years. The basis for the collection of R&D funds is the "Announcement of the State Administration of Taxation on Issues Concerning the Collection Scope of the Pre-tax Deduction of R&D Expenses" (State Administration of Taxation Announcement No. 40 of 2017).



When calculating the increment of R&D funds in the first two years, only the part of the enterprise's own R&D funds is calculated each year (that is, the total R&D expenditures deduct the R&D incentives for the company from the fiscal year). If an enterprise has completed the final settlement and payment before the declaration of several policies for supporting the development of high-tech enterprises in Hainan Province (Trial) and has not filled in the "R&D expenses that can be added and deducted" in the enterprise income tax return, the relevant data in the special audit report may prevail.



Article 6: application conditions for incremental reward of R&D funds of high-tech enterprises:



(1) the enterprise, in the year of applying for funds, is within the validity period of the high-tech enterprise.



(II) the enterprise shall fill in the statistical survey and annual development report as required within the validity period of the high-tech enterprise.



(III) in the first two years of applying for funds, the proportion of the total research and development expenses to the total sales revenue of the same period in each year shall meet the relevant requirements, as follows:



1. For companies with sales income less than 50 million yuan (inclusive), the proportion shall not be less than 5%



2. For enterprises with sales revenue of 50 million yuan to 200 million yuan (inclusive), the proportion shall not be less than 4%.



3. The proportion of enterprises with sales revenue of more than 200 million yuan is not less than 3%.

 

(IV) in the first two years of applying for funds, the R&D expenses shall be truthfully filled in the corporate income tax return each year.



(V) enterprises with annual application funds exceeding 50,000 yuan (inclusive) need to entrust professional institutions to conduct special audits on R&D investment funds in the previous two years, and the audit results should be consistent with the relevant data in the tax return.



(VI) Companies that apply for an annual fund of no more than 50,000 yuan should record their R&D project ledger, R&D project initiation documents, R&D investment detailed account (auxiliary account), and related R&D equipment procurement materials (contracts, invoices, transfer records) , Material procurement materials (including contracts, invoices, warehouse records, etc.) and other relevant data on R&D investment are sorted out for reference.



Article 7: The application process of allocating funds. The Provincial Department of Science and Technology issues a capital declaration notice, and the applicant company submits the relevant materials to the city and county Science and Technology Management Department. The city and county science and technology management department reviews the application materials based on the data provided by the taxation department, and then submits it to the Provincial Science and Technology Department for review. The Provincial Science and Technology Department publicizes the funds of the enterprises to be supported to the society through official websites and other media, and the publicity period is generally not less than 5 working days.  



Article 8: the expenditure scope, supervision and management of subsidy funds shall be implemented in accordance with the Interim Measures for the management of special funds for the development of high and new technology industries in Hainan Province.

 

Article 9: High-tech enterprises that move in as a whole may apply for incremental R&D funding awards in accordance with regulations in the next year after they apply for move-in awards.



Article 10: the detailed rules shall be interpreted by the Provincial Department of science and technology.



Article 11: These Detailed Rules shall come into force on September 13, 2021 and shall be valid for three years.]]> Tax, Incentives & Finance Tropical Hainan https://www.tropicalhainan.com/hainan-ftp-business-forum/incentives-taxes-finance/rules-for-incremental-reward-for-rd-funds-for-high-tech-enterprises-in-hainan-province/ https://www.tropicalhainan.com/hainan-ftp-business-forum/incentives-taxes-finance/collection-and-administration-of-the-taxes-on-the-domestic-sales-of-goods-with-added-value-from-processing-in-yangpu/ Mon, 20 Dec 2021 00:42:59 +0000 Circular of the General Administration of Customs on Issuing the Interim Measures of the Customs for the Collection and Administration of the Taxes on the Domestic Sales of Goods with Added Value from Processing in the Yangpu Bonded Port Area



(All information in this document is authentic in Chinese. English is provided for reference only. In case of any discrepancy, the Chinese version shall prevail.)



From the Hainan Provincial Development and Reform Commission, the Department of Industry and Information Technology of Hainan Province, the Department of Finance of Hainan Province, the Department of Agriculture and Rural Affairs of Hainan Province, the Department of Commerce of Hainan Province, the Haikou Customs, and the Hainan Provincial Tax Service of the State Taxation Administration.



The Interim Measures of the Customs for the Collection and Administration of the Taxes on the Domestic Sales of Goods with Added Value from Processing in the Yangpu Bonded Port Area, which were formulated upon study by the General Administration of Customs in accordance with the Customs Law of the People's Republic of China, the Measures of the Customs of the People's Republic of China for Supervision of the Yangpu Bonded Port Area and other relevant provisions and through negotiation with the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Finance, the Ministry of Agriculture and Rural Affairs, the Ministry of Commerce and the State Taxation Administration in order to implement the Overall Plan for the Construction of Hainan Free Trade Port and give full play to the pilot role of the Yangpu Bonded Port Area, are hereby issued to you upon approval by the State Council for your effective implementation.



General Administration of Customs

July 8, 2021



Interim Measures of the Customs for the Collection and Administration of the Taxes on the Domestic Sales of Goods with Added Value from Processing in the Yangpu Bonded Port Area



Article 1 The Measures are formulated upon approval of the State Council in accordance with the Customs Law of the People's Republic of China, the Measures of the Customs of the People's Republic of China for Supervision of the Yangpu Bonded Port Area and other relevant provisions in order to implement the Overall Plan for the Construction of Hainan Free Trade Port and give full play to the pilot role of the Yangpu Bonded Port Area.



Article 2 For the purpose of the Measures, enterprises engaged in encouraged industries refer to the enterprises whose main business is the industrial items specified in the catalog of encouraged industries of Hainan Free Trade Port, with the main business income accounting for more than 60% of the total enterprise income.



Enterprises engaged in encouraged industries shall register in the Yangpu Bonded Port Area, have independent legal personality, and file with the Yangpu Economic Development Zone Administrative Committee (the filed enterprises engaged in encouraged industries are hereinafter collectively referred to as "filed enterprises").



For the purpose of the Measures, imported materials and parts refer to the goods that have entered the area from abroad without going through the import taxation procedures.



For the purpose of the Measures, the added value from processing more than 30% refers to the added value of the goods containing imported materials and parts after manufacturing and processing by filed enterprises in the Yangpu Bonded Port Area that is more than 30% (inclusive, the same below) of the total value of imported materials and parts and materials and parts purchased from outside the area within the territory of China.



Article 3 The Yangpu public information service platform established by Hainan Province shall meet the requirements for enterprises engaged in encouraged industries to handle the business related to filing and added value from processing. The Yangpu public information service platform shall be subject to the management system of "one account for one enterprise".



Filed enterprises shall be connected to the platform in accordance with the methods and data standards recognized by the customs, submit authentic, accurate, effective and traceable information and data, and comply with the requirements of the customs for tax collection and administration and follow-up regulation.



Through the Yangpu public information service platform, the customs will share the information required for enterprise filing, customs tax collection and administration, and follow-up regulation with the Yangpu Economic Development Zone Administrative Committee and the relevant departments of Hainan Province.



Article 4 If the goods produced by enterprises engaged in encouraged industries in the Yangpu Bonded Port Area that contain imported materials and parts and have the added value from processing more than 30% are sold outside the area within the territory of China, import tariffs will be exempt, while import value-added taxes and consumption taxes will be levied in accordance with provisions.



If the goods produced by enterprises engaged in encouraged industries in the Yangpu Bonded Port Area that contain imported materials and parts and have the added value from processing less than 30% are sold outside the area within the territory of China, the current policies for selective imposition of tariffs on domestic sales in comprehensive bonded areas apply; the imposition of tariffs may be applied for based on the corresponding imported materials and parts or the actual inspection status (finished products), and import value-added taxes and consumption taxes will be levied in accordance with provisions.



Article 5 The calculation formula for added value from processing more than 30% is as follows: × 100% ≥ 30%.



The relevant prices in the calculation formula shall be determined in accordance with the Measures for Assessing and Determining the Duty-paid Value of Bonded Goods Sold in the Domestic Market (Order of the General Administration of Customs No.211) and the Measures for Assessing and Determining the Duty-paid Value of Imported and Exported Goods (Order of the General Administration of Customs No.213). Specifically:



1. The price of goods sold outside the area within the territory of China shall be determined based on the transaction price when the filed enterprise sells the goods obtained from manufacturing and processing that contain imported materials and parts outside the area within the territory of China;



2. The price of materials and parts imported from abroad shall be determined based on the transaction price of such materials and parts imported by the filed enterprise from abroad, including expenses for transportation of such materials and parts to the domestic destination before unloading and related expenses and insurance premiums.



3. The price of materials and parts purchased from outside the area within the territory of China shall be determined based on the transaction price of such materials and parts purchased by the filed enterprise from outside the area within the territory of China, including expenses for transportation of such materials and parts to the Yangpu Bonded Port Area and related expenses and insurance premiums.



Article 6 If a filed enterprise applies for exemption of import tariffs on domestic sales of goods with added value from processing, it shall accurately calculate and truthfully declare the added value from processing of the relevant goods, be responsible for the data independently calculated and declared, and bear the corresponding legal liability.



The filed enterprise shall, before domestic sales of the relevant goods outside the area, go through the declaration procedures for added value from processing with the customs in accordance with provisions. If the added value from processing is more than 30%, the system of the customs will automatically generate the confirmation number for exemption of import tariffs on domestic sales of such goods with added value from processing, and the filed enterprise will notify the domestic importing enterprise outside the area of such number.



The domestic importing enterprise outside the area shall, with the confirmation number for exemption of import tariffs on domestic sales of goods with added value from processing, go through the import declaration procedures with the customs in accordance with provisions, and pay the relevant taxes.



In the customs declaration form, the column of nature of tax exemption shall be filled in with "goods with added value from processing", and the column of filling number with the confirmation number for exemption of import tariffs corresponding to such goods.



Article 7 The Measures shall apply to the domestic sales of goods with total added value from transfer for deep processing in the Yangpu Bonded Port Area that is more than 30%.



Article 8 The customs shall, based on risk analysis, randomly inspect and examine the ratio of added value from processing, price, classification, origin and other tax-related elements declared by enterprises.



Article 9 The customs shall inspect (examine) enterprises in accordance with the law.



Article 10 The domestic sales of goods with added value from processing more than 30% outside the area will not be exempt from import tariffs if:



1. materials and parts imported from abroad are commodities subject to tariff quota management.



2. goods only undergo one or more kinds of micro processing or treatment such as blending, change of packaging, splitting, combined packaging, sharpening, simple grinding or simple cutting; or



3. other circumstances under which import tariffs shall be levied in accordance with the relevant provisions occur.



Article 11 If the goods produced by filed enterprises in the Yangpu Bonded Port Area that do not contain imported materials and parts are sold outside the area within the territory of China, import tariffs will be exempt, while import value-added taxes and consumption taxes will levied in accordance with provisions, and the matters relating to customs tax collection and administration shall be subject to the Measures.



Article 12 If any violation of the Measures constitutes a smuggling act, breach of regulatory provisions of the customs, or act subject to administrative punishments imposed by the customs according to laws and regulations, the customs shall impose punishments in accordance with the relevant laws and regulations; if a crime is constituted, criminal liability shall be investigated in accordance with the law.



Article 13 The Measures shall be interpreted by the General Administration of Customs.



Article 14 The Measures will come into force simultaneously with the launch of the Yangpu public information service platform and the information system of the Haikou Customs and be abolished on December 31, 2024.]]> Tax, Incentives & Finance Tropical Hainan https://www.tropicalhainan.com/hainan-ftp-business-forum/incentives-taxes-finance/collection-and-administration-of-the-taxes-on-the-domestic-sales-of-goods-with-added-value-from-processing-in-yangpu/ https://www.tropicalhainan.com/hainan-ftp-business-forum/incentives-taxes-finance/hsbc-opens-branch-on-hainan-island/ Tue, 14 Dec 2021 01:17:44 +0000 HSBC opens branch on Hainan Island



The Haikou branch of HSBC Bank (China) Co Ltd officially opened for business on Hainan Island.



HSBC said that the new branch will give financial support to Hainan province to help it build into a high-level free trade port, create an intersection promoting China's dual-circulation development paradigm, and help domestic and overseas companies grasp trade opportunities brought about by the development of the FTP.



"The Hainan Free Trade Port is one of the best examples of China continuously opening up its markets and deeply integrating into the global economy. Backed by a super-sized domestic market, Hainan, which combines the location advantage of connecting China with ASEAN, and policy advantages from building the FTP, is striving to become an important intersection promoting China's dual-circulation strategy," said Mark Wang, president and chief executive officer of HSBC Bank (China) Co Ltd.



The new branch of HSBC will focus on corporate banking and will offer a wide range of financial solutions, including working capital loans, project financing and trade financing, in both renminbi and foreign currencies.



Hainan is planning to establish a financial system which adapts to a high-level free trade port by 2025.



It is expected that the value added of the financial sector of Hainan province will hit 100 billion yuan ($15.7 billion) in 2025; the financial sector will contribute 10 percent to the provincial GDP; and the number of all types of financial institutions will reach 1,000, according to the 14th Five-Year Plan (2021-25) for the development of the financial industry of Hainan province.]]> Tax, Incentives & Finance Tropical Hainan https://www.tropicalhainan.com/hainan-ftp-business-forum/incentives-taxes-finance/hsbc-opens-branch-on-hainan-island/ https://www.tropicalhainan.com/hainan-ftp-business-forum/incentives-taxes-finance/2nd-batch-of-qualified-domestic-limited-partner-qdlp-overseas-investment-pilot-enterprises-in-the-hainan-ftp-listed/ Mon, 22 Nov 2021 00:31:13 +0000 2nd batch of Qualified Domestic Limited Partner (QDLP) overseas investment pilot enterprises in the Hainan Free Trade Port listed.



August 16th, 2021, the Hainan Local Financial Supervision and Administration accepted application materials from enterprises for being listed in the 2nd batch of Qualified Domestic Limited Partner (or QDLP) overseas investment pilot enterprises in the Hainan Free Trade Port.



The Qualified Domestic Limited Partnership (QDLP) is a pilot program developed by Chinese government to allow foreign asset managers to raise RMB from wealthy and institutional investors in China for overseas investment.



Under the QDLP program, foreign asset managers can establish an investment entity in China as a general partner.



They can also set up a Qualified Domestic Investment Fund to feed into the master fund managed by an overseas management group. This pilot program requires the RMB Fund Enterprise to appoint a qualified commercial bank as a custodian bank, which will operate the business of RMB and foreign exchange settlement within the quota approved by the Hainan authorities.



Hainan reviewed and published the second batch of overseas investment qualified domestic limited partners (qdlp) in Hainan Province. The list of pilot projects (including controlling shareholders, actual controllers or tentative names) is as follows:



Equity investment



诺安资本管理有限公司 / Lion Capital Management Co., Ltd.



Website: https://www.lionfund.com.cn/en/index.jsp



Email: yangy@lionscapital.com.cn



Telephone: (+86) 028-83390058



Investor: Beijing Lion Enterprise Management Co., Ltd. Investment Organization: Lion Capital Business Scope: Asset Management ); Investment Management ; Investment Consulting;.



浦银国际投资管理有限公司 / SPDB International Investment Management Co., Ltd.



Website: No



Email: No



Telephone: No



北京厚生投资管理中心（有限合伙) / Beijing Housheng Investment Management Center (Limited Partnership)



Website: http://www.hosencapital.com/



Email: legal@hosencapital.com



Telephone: (+86) 010-51208208



西藏禹泽投资管理有限公司 Tibet Yuze Investment Management Co., Ltd.



Website: No



Email: 13599057958@139.com



Telephone: 0591-83858102



Tibet Yuze Investment Management Co., Ltd. was established on July 08, 2015. The legal representative is Zheng Zheng, the registered capital is 20 million yuan, and the unified social credit code is 9154009132132759X5.



The company business scope includes: investment management (excluding financial and brokerage business); equity investment management; asset management (excluding financial asset management and insurance asset management); Financial consulting (not to be engaged in bookkeeping), business consulting, and corporate management consulting, for projects that are subject to approval in accordance with the law, the project can only be operated after being approved by the relevant departments.



海南天堃私募股权投资基金管理有限公司 / Hainan Tiankun Private Equity Investment Fund Management Co., Ltd.



Website: No



Email: No



Telephone: (+86)



Hainan Tiankun Private Equity Investment Fund Management Co., Ltd. was established on January 20, 2021.



The legal representative is Yuan Jian, the registered capital is 10 million yuan, and the unified social credit code is 91460000MA5TUK9H71.



The company address is located in Jiangdong New District, Haikou City, Hainan Province No. 63-1, Qiongshan Avenue, Hefeng Homeland Relocation Headquarters-86, the industry belongs to the capital market service.



The business scope includes: general projects: private equity investment fund management, venture capital fund management services (must be in the China Securities Investment Fund Association Business activities can only be carried out after completing the registration and filing) (except for licensed businesses, they can independently operate projects that are not prohibited or restricted by laws and regulations in accordance with the law).



景泰创业投资私募基金管理（海南）合伙企业（有限合伙）/ Jingtai Venture Capital Private Equity Fund Management (Hainan) Partnership Enterprise (Limited Partnership)



Website: No



Email: No



Telephone: No



Relocation Headquarters, No. 63-1, Qiongshan Avenue, Jiangdong New District, Haikou City, Hainan Province -269, Hefeng Homeland, Meilan District, Haikou City



Executive Partner: Shenzhen Jingtai Lifeng Investment Development Co., Ltd.



合盛元（海南）私募基金管理有限公司 / Heshengyuan (Hainan) Private Equity Fund Management Co., Ltd.



Website: No



Email: zhouli01@shandagames.com



Telephone: 021-50504740



Non-equity investment



瑞士联合资产管理亚洲有限公司 Swiss United Asset Management Asia Co., Ltd.



Website: No



Email: No



Telephone: No



冠通北纬资产管理（北京）有限公司 / Guantong North Latitude Asset Management (Beijing) Co., Ltd.



Website: http://www.gtfutures.com.cn/



Email: LWZQUQU@163.COM



Telephone: (+86) 010-62638590



Guantong North Latitude Asset Management (Beijing) Co., Ltd. was established on May 15, 2007, the legal representative is Qu Xiurong, the registered capital is 20 million yuan, the unified social credit code is 91110108662173779D, and the company address is located in Zhichun, Haidian District, Beijing 1210, 12th Floor, No. 111 Road,



The industry belongs to the business service industry, and the business scope includes: investment management. ("1. It is not allowed to raise funds in public without the approval of relevant departments; 2. It is not allowed to openly conduct securities products and financial derivatives trading activities; 3. It is not allowed to issue loans; 4. Guarantee; 5. Don’t promise investors that the investment capital will not be lost or promise the lowest return”; the enterprise chooses its own business projects according to law and carries out business activities; projects subject to approval according to law shall be operated in accordance with the approved content after approval by relevant departments Activities; it is not allowed to engage in business activities that are prohibited and restricted by the city’s industrial policies.).



复星资产管理有限公司 / Fosun Asset Management Co., Ltd.



Website: No



Email: No



Telephone: No



Company Number: 1933831



浙江玉皇山南投资管理有限公司 / Zhejiang Yuhuang Shannan Investment Management Co., Ltd.



Website: http://www.ohfi.com.cn



Email: fuduo@ohfi.com.cn



Telephone: (+86) 0571-81591285



Zhejiang Yuhuang Shannan Hedge Fund Investment Management Co., Ltd. was registered and established in Zhejiang Administration for Industry and Commerce on October 22, 2014, with a paid-in capital of 100 million yuan. The company's affiliates Dunhe Asset Management, Yongan Futures, and Silicon Valley Paradise are all industry leaders. The company focuses on incubation investment and strategic cooperation in the field of hedge funds.



上海佳期投资管理有限公司 / Shanghai Jiaqi Investment Management Co., Ltd.



Website: http://www.jqinvestments.com



Email: schen@jqinvestments.com



Telephone: (+86) 021-61620400



Shanghai Jiaqi Investment Management Co., Ltd. was established on November 28, 2014. The legal representative is Ji Qiang, the registered capital is 50 million yuan, and the unified social credit code is 91440400324820937J.



The company address is located in Lingang, China (Shanghai) Pilot Free Trade Zone Room 3721, Building 2, Lane 1800, Xinyang Road, New Area, belongs to the business service industry, and its business scope includes: general projects: investment management, asset management. (Except for items subject to approval in accordance with the law, the business license shall be used to carry out business activities independently in accordance with the law).



Pinpoint Asset Management (Singapore) Pte. Ltd



Website: www.pinpointfund.com



Email:



Telephone: +852 31922328



1 WALLICH STREET #24-05 GUOCO TOWER 078881



What is a qdlp?



Qualified domestic limited partner (qdlp) refers to the pilot fund management enterprises that have passed the qualification examination and obtained a quota, which can raise funds from domestic qualified investors and set up pilot funds to invest in overseas primary and secondary markets.



What are the applicable objects?



Qdlp enterprises are divided into pilot fund management enterprises and pilot funds. Qualified new fund management enterprises and existing fund management enterprises can apply for pilot qualification.



What are the main contents and highlights?



There are 11 chapters and 54 articles in the Interim Measures for qdlp.



The main contents include the interpretation of relevant definitions, responsibilities of relevant pilot units, access conditions and business scope of relevant market entities, establishment of pilot fund management enterprises and procedures of pilot quota application, access conditions and business responsibilities of custodians, process for foreign exchange purchase and foreign investment of enterprises, etc.



The administrative personnel's access conditions and business responsibilities, enterprise quota management, information disclosure requirements, supervision and management requirements, ownership of interpretation rights and implementation date, etc.



The main highlights include:



First, the threshold is low: It is required that the registered capital of the pilot fund management enterprise shall not be less than RMB 5 million or equivalent in foreign currency. Any entity among the controlling shareholder, actual controller or executive partner of the pilot fund management enterprise or the related entity of any of the above entities has not been severely punished by the local regulatory authority in the past year.



The second is investment is wide ranging: the scope of overseas investment by pilot funds includes: equity and bonds of overseas non-listed companies, stocks and bonds non-publicly issued and traded by overseas listed companies, overseas securities markets (including financial instruments traded in overseas securities markets, etc.), overseas equity investment funds and securities investment funds, overseas commodities and financial derivatives, etc.



The third is unrestricted: on the premise that the total amount of QDLP in Hainan Province is not exceeded, the quota application of a single pilot fund management company and the investment quota of a single project are unlimited. The relevant pilot units will determine the approved pilot quota according to the actual needs of the project.



The fourth is more flexible: QDLP pilot companies implement balance management for foreign investment quotas, and pilot fund management companies can initiate the establishment of multiple pilot funds, and can flexibly adjust the foreign investment quotas of a single pilot fund among the funds established by them. The sum of the foreign investment quota of a single pilot fund shall not exceed the foreign investment quota of the pilot fund management enterprise approved by the relevant pilot unit.]]> Tax, Incentives & Finance Tropical Hainan https://www.tropicalhainan.com/hainan-ftp-business-forum/incentives-taxes-finance/2nd-batch-of-qualified-domestic-limited-partner-qdlp-overseas-investment-pilot-enterprises-in-the-hainan-ftp-listed/ https://www.tropicalhainan.com/hainan-ftp-business-forum/incentives-taxes-finance/what-are-the-forms-of-foreign-investment-in-the-hainan-free-trade-port/ Tue, 09 Nov 2021 07:08:43 +0000 What are the Forms of foreign investment in the Hainan Free Trade Port



Chinese-Foreign Equity Joint Ventures, Chinese-Foreign Cooperative Joint Ventures, and Wholly Foreign-Owned Enterprises are the three main forms of foreign investment in China. Other investment forms include Joint Stock Limited Companies with Foreign Investment, Foreign Investment Companies, Chinese-Foreign Cooperative Exploitation, and BOT.



Chinese-Foreign Equity Joint Ventures



The Chinese-Foreign Equity Joint Venture is formed in China with joint capital from both Chinese and foreign companies, other economic organizations or individuals in accordance with the Law of the People's Republic of China on Chinese Foreign Equity Joint Ventures and its implementation regulations. The parties of the Chinese-Foreign Equity Joint Venture invest and operate jointly, and share the profits and losses in proportion to their respective shares of the registered capital. A Chinese-Foreign Equity Joint Venture is a limited liability company which has the status of a Chinese legal person. In general, the capital from the foreign party must not be less than 25% of the total. The partner may make capital contribution in currency or in non-currency property that may be valued in currency such as buildings, workshops, machinery and other physical objects, as well as in industrial property rights, proprietary technology, and land occupancy rights. The profits and other legitimate interest of foreign investors can be remitted out of the country or reinvested in China.



Chinese-Foreign Cooperative Joint Ventures



The Chinese-Foreign Cooperative Joint Venture, also called the Chinese-foreign contractual joint venture, is formed within the Chinese territory by foreign companies, enterprises, other economic organizations or individuals and Chinese companies, enterprises, other economic organizations or individuals in accordance with the Law of the People's Republic of China on Chinese-Foreign Contractual Joint Ventures and its implementation regulations.



The parties to a contractual joint venture should clearly prescribe in the contract their respective conditions, rights, obligations, profit distribution, responsibilities for risks and debts, the company's management mode and property disposal upon expiration of the venture. When establishing China-Foreign Contractual Joint Ventures, the foreign party usually provides all or most of the capital, technology and key equipment while the Chinese party provides land use rights, existing plants and facilities, or a certain amount of capital.



Upon the expiration of the contractual joint venture stipulated in the contract, all the fixed assets of the contractual joint venture shall be returned gratis to the Chinese party; the foreign party may, within the period of the venture’s operation, apply to recoup its capital outlay in advance in the following ways:



(1) By reaching agreement in the contract of the contractual joint venture to enlarge the foreign party's proportion in the distribution of earnings on the basis of distribution according to the investment or conditions the foreign party provided for cooperation;



(2) By approval by the financial and tax authorities in accordance with relevant tax provisions of the State to recoup its capital outlay prior to the payment of income tax by the contractual joint venture;



(3) By recouping its capital outlay by other methods approved by the financial and tax authorities and other examination and approval authorities.



If the foreign party recoups its capital outlay in advance during the period of the venture's operation according to the provisions mentioned in the preceding paragraph, the Chinese and foreign parties shall be liable for the debts of the contractual joint venture according to the provisions of the relevant laws and the agreement in the contractual joint venture contract.



The Chinese-Foreign Cooperative Joint Venture may or may not possess the status of a legal person. A contractual joint venture which has legally attained the status of a Chinese legal person is a limited liability company. The parties to the venture shall bear liability for the contractual joint venture to the extent of their investment or in accordance with agreed conditions for cooperation in the contract. The contractual joint venture shall be liable for covering the debts of the venture with all its assets.



Wholly Foreign-Owned Enterprises



The Wholly Foreign-Owned Enterprise is invested entirely by foreign companies, enterprises, other economic organizations or individuals within the Chinese territory in accordance with the Law of the People's Republic of China on Wholly Foreign-Owned Enterprises and its implementation rules, and does not include branch offices established by foreign enterprises and other economic entities in China.



A wholly foreign-owned enterprise that meets the conditions for legal personality under the relevant Chinese laws shall obtain such status in accordance with the law. The organizational form of a foreign-capital enterprise shall be a limited liability company. Upon approval, the enterprise may also take any other liability form. With respect to a foreign-capital enterprise which is a limited liability company, the liability of the foreign investor to the enterprise shall be limited to the amount of investment subscribed and contributed to the enterprise by the investor. With respect to a foreign-capital enterprise which takes any other liability form, the liability of the foreign investor to the enterprise shall be dealt with in accordance with the provisions of Chinese laws and regulations.



Joint Stock Limited Companies with Foreign Investment



Joint Stock Limited Companies with Foreign Investment are companies set up within the Chinese territory by foreign companies, enterprises, or other economic organizations and Chinese companies, enterprises or other economic organizations on the principle of equality and mutual benefit and through subscribing for a certain proportion of stock. Foreign investors may also acquire A-shares of the PRC listed companies through medium and long-term strategic mergers and acquisitions under relevant laws and regulations.



The total capital of a joint stock limited company with foreign Investment is made up of different types of shares. Each stockholder takes certain responsibility for the company in accordance with the number of shares subscribed, and the company is responsible for debts with all its assets. The company is one of the forms of enterprises with foreign investment and is governed by the state according to the relevant laws and regulations concerning enterprises with foreign investment.



Foreign Investment Companies



Foreign investment companies are Chinese-foreign equity joint ventures or wholly foreign-owned enterprises within the Chinese territory that deal with direct investment. They take the form of limited liability companies.



The foreign investor who applies to establish a foreign investment company must enjoy good capital credit, sufficient economic strength for setting up an investment company, and meet either of the following conditions: A. its total registered assets must be at least US$400 million in the year prior to the application; the investor should have already established a foreign-invested enterprise within the territory of China and the amount of the investor's paid-in capital contribution to the registered capital thereof must exceed US$10million; or B. it should have already established more than ten foreign-invested enterprises within the territory of China, and the total amount of the investor's paid-in capital contribution to the registered capital thereof must exceed US $30 million.



Upon the approval of the Chinese government, a Foreign Investment Company enjoys a broader scope of business than other foreign-invested companies in an attempt to encourage overseas companies to carry out investment plans in China. At present, Foreign Investment Companies can invest in those fields of industry, agriculture, infrastructure and energy that the country encourages and permits.



Foreign-invested Venture Investment Enterprises



The term "venture investment" refers to an investment method consisting of equity investment, principally in unlisted high-tech enterprises (Investees), and start-up management services to such enterprises in order to obtain gains in the form of capital appreciation. The term "Foreign-invested Venture Investment Enterprise" (Venture Investment Enterprise) refers to a foreign-invested enterprise that is established in China by foreign investors or by both foreign investors and companies, enterprises or other economic organizations that are registered and established according to Chinese law (Chinese Investors). Pursuant to the Administration of Foreign-Invested Venture Investment Enterprises Provisions, the Venture Investment Enterprise engages in venture investment business activities.



The Venture Investment Enterprise may take the organizational form of a non-legal person entity or a company. The investors of a Venture Investment Enterprise that takes the organizational form of a non-legal person entity (Non-legal Person Venture Investment Enterprises) shall undertake joint and several liability for the debts of the Venture Investment Enterprise. The investors of a Non-legal Person Venture Investment Enterprise may agree in the contract for Venture Investment Enterprise that the requisite investors with venture investment as their main line of business shall undertake joint and several liability when the assets of the Non-legal Person Venture Investment Enterprise are insufficient to discharge the debts, and that the liability of other investors shall be limited to the amount of capital contribution to which they subscribed.



The establishment of a Venture Investment Enterprise shall satisfy the following conditions: (1). The number of investors shall be more than two and less than 50, and there shall be at least one requisite investor that has venture investment as its main line of business; (2). The minimum amount of capital contribution to which the investors of a Non-legal Person Venture Investment Enterprise subscribed shall be US$10 million, and the minimum amount of capital contribution to which the investors of a Corporate Venture Investment Enterprise subscribed shall be US$5 million. Except for the requisite investors, the minimum amount of capital contribution to which each of the other investors subscribed may not be less than US$1 million. Foreign Investors shall make their capital contributions in a freely convertible currency, whereas Chinese Investors shall make their capital contributions in Renminbi.



Chinese-Foreign Cooperative Exploitation



The term Chinese-Foreign Cooperative Exploitation means that a Chinese company and a foreign company sign a venture contract to carry out joint exploration and development of petroleum and mineral resources onshore and offshore. It is a widely-used form of economic cooperation in natural resources throughout the world. The striking features of the Cooperative Exploitation are high risk, high investment, and high return. Cooperative Exploitation is usually carried out in three phases: exploration, development and production.



Build-operate-transfer (BOT)



The form of BOT is that the investor takes charge of a certain industrial or infrastructure project in the host country, taking responsibility for its construction, operation, maintenance and transfer. The investor, within an agreed period, must run the facilities, and shall recoup its investment and expenses in operation, maintenance and other aspects in the project. At the termination of the contract, the ownership of the project will be transferred to the local government. In China, BOT is used in development of projects such as freeways, powerhouses, and sewage treatment plants.]]> Tax, Incentives & Finance Tropical Hainan https://www.tropicalhainan.com/hainan-ftp-business-forum/incentives-taxes-finance/what-are-the-forms-of-foreign-investment-in-the-hainan-free-trade-port/ https://www.tropicalhainan.com/hainan-ftp-business-forum/incentives-taxes-finance/announcement-on-issues-related-to-preferential-policies-of-corporate-income-tax-in-hainan-free-trade-port-july-2020/ Sun, 07 Nov 2021 08:36:54 +0000 Announcement on Issues Related to Preferential Policies of Corporate Income Tax in Hainan Free Trade Port July 2020



On July 31, the Hainan Taxation Bureau of State Administration of Taxation issued an announcement to clarify the relevant provisions of preferential policies on corporate income tax in Hainan Free Trade Port. The full text is as follows:



Announcement by Hainan Taxation Bureau of State Administration of Taxation on Issues Related to Preferential Policies of Corporate Income Tax in Hainan Free Trade Port (Announcement No.4, 2020, Hainan Taxation Bureau of State Administration of Taxation) In accordance with the provisions of the Corporate Income Tax Law of the People's Republic of China and its Implementation Regulations (hereinafter referred to as the Implementation Regulations) and the Notice by the Ministry of Finance and the State Administration of Taxation on Preferential Policies of Corporate Income Tax in Hainan Free Trade Port (Notice No. 31, 2020, hereinafter referred to as the Notice), the relevant issues concerning the implementation of preferential policies of corporate income tax in Hainan Free Trade Port are hereby announced as follows:



1. Issues concerning the 15% corporate income tax on enterprises in encouraged industries.



(1) Encouraged industrial enterprises that are registered in Hainan Free Trade Port (hereinafter referred to as FTP) and has a substantial operation record are levied at a reduced rate of 15% for their corporate income. Enterprises mentioned in this clause include the non-resident enterprise institutions and establishments in the FTP.



(2) For an enterprise with its head office located in the FTP, only the head office and branches of the enterprise located in the FTP (excluding the branches below third level that are set up in FTP by branches below second level which are established outside FTP) shall fall into the scope for judging whether they meet the specified conditions, while the branches set up outside the FTP shall not be included in the judgment scope;



For enterprises whose head office is established outside the FTP, only the branches set up in the FTP (excluding the branches below third level that are set up in FTP by branches below second level which are established outside FTP) shall be judged whether they meet the specified conditions, and the head offices and branches outside the FTP are not included in the judgment.



(3) Enterprises in encouraged industries can enjoy the policy of being levied at a reduced corporate income tax rate of 15%, which could be enjoyed when prepayment declaration is made under regulations. Enterprises should retain main documents for reference as follows:



1. Explanation document that the main business belongs to the specific items in the FTP catalogue of encouraged industries, and income from such main business accounts for more than 60% of the total corporate income;



2. Relevant information about the substantial operation of the enterprise, including total assets, total income, total personnel, total wages, etc., and their corresponding proportions distributed among institutions established in the FTP.



2. Issues concerning corporate tax exemption for income from new overseas direct investment for enterprises in tourism, modern service and high-tech industries established in FTP.



(1) The ‘new overseas direct investment’ mentioned in Article 2 of the Notice refers to the newly-added overseas direct investment of enterprises from January 1, 2020 to December 31, 2024, including the establishment of new branches and overseas investment in new enterprises, increased capital and shares of established overseas enterprises and acquired equity of overseas enterprises.



(2) The policy of exemption of corporate income tax on income from new overseas direct investment by enterprises in tourism, modern service industry, and high-tech industries can be enjoyed in accordance with regulations during the annual tax declaration.



Main documents for reference that should be retained are: Explanation documents that the enterprise belongs to the tourism industry, modern service industry, high-tech industry in the FTP catalogue of encouraged industries and that the newly-increased overseas direct investment income meets required conditions.



3. Issues concerning the one-off deduction or accelerated depreciation and amortization of newly purchased assets.



(1) For self-developed intangible assets, the time of purchase shall be identified as the time when the intended purpose of assets is achieved.



(2) One-off full deduction or accelerated amortization could be applied on intangible assets from the year when they are available for use.



(3) Enterprises that purchase intangible assets and take the approach of shortening amortization period or accelerating amortization speed in accordance with the provisions of Article 3 of the Notice can refer to the ‘Notice of Relevant Issues about Accounting Treatment for Income Tax related to Accelerated Depreciation on Enterprise Fixed Assets issued by the State Taxation Administration’ (Notice No.81, 2009)



(4) The one-off deduction or accelerated depreciation and amortization policy can be enjoyed when prepayment declaration is made under regulations, main documents for reference that enterprises should retain are as follows:



1. Documents about the point in time when assets are being purchased (ie. Invoices for assets purchased in currency, Description of the arrival time of assets purchased by installment or on credit, Description of completion settlement on self-built fix assets, Description of self-developed intangible assets when reaching their intended use);



2. Relevant asset accounting vouchers;



3. Adjustment of the ledger related to the differences between accounting practice and taxation practice for asset accounting.



Secondary branches and non-resident enterprise institutions and establishments that are set up in FTP and levied on auditing can enjoy one-off deduction or accelerated depreciation and amortization policy.



The announcement will be implemented from January 1, 2020 to December 31, 2024. Those who fail to enjoy the income tax allowances in time based on the preferential policy before the release of relevant documents can enjoy the allowances in the future monthly (quarterly) prepayment declarations or in the 2020 year-end final settlement.



Announcement is hereby given.



Hainan Provincial Taxation Bureau of State Taxation Administration

31 July, 2020 ]]> Tax, Incentives & Finance Tropical Hainan https://www.tropicalhainan.com/hainan-ftp-business-forum/incentives-taxes-finance/announcement-on-issues-related-to-preferential-policies-of-corporate-income-tax-in-hainan-free-trade-port-july-2020/ https://www.tropicalhainan.com/hainan-ftp-business-forum/incentives-taxes-finance/what-are-the-requirements-for-companies-to-benefit-from-the-15-preferential-tax-policy-in-the-hainan-free-trade-port/ Mon, 23 Aug 2021 03:26:28 +0000 What are the requirements for companies to benefit from the 15% preferential tax policy in the Hainan Free Trade port



From January 1, 2020, enterprises registered in Hainan may be subject to a corporate income tax (CIT) rate of 15 percent. To be eligible for the lower CIT rate, the main business of the enterprise must fall within the Encouraged Sectors list revealed in January.



Also, the main business of the enterprise must contribute at least 60 percent of the enterprise's total revenue, and the enterprise has to be in “substantive business operation” as defined by the official documents. By 2025, when the island will independently control its own customs operations, the policy will cover all enterprises outside a negative list registered in Hainan and engaged in substantive business activities.



The standards of the “substantive business operation,” according to Carol Cheng from KPMG China Tax Center, are “not new, but have long been implemented both in China and internationally.”



The company's management body must reside in Hainan and have real control over the operation, personnel, accounting and assets of the company. Major decisions have to be made by executives on the island. “It is international common practice,” said Cheng.



In building key industrial parks, local authorities in Hainan also made extra promises of cash rewards, subsidies and financial returns.



In May 2020, Haikou, capital of Hainan, released preferential policies to attract the film and TV industry. If registered in Haikou, such companies will get their CIT and value-added tax 100 percent reimbursed and an extra reward of between 1 million yuan (US$154,300) and 4 million yuan (US$617,200) based on their tax contributions.]]> Tax, Incentives & Finance Tropical Hainan https://www.tropicalhainan.com/hainan-ftp-business-forum/incentives-taxes-finance/what-are-the-requirements-for-companies-to-benefit-from-the-15-preferential-tax-policy-in-the-hainan-free-trade-port/ https://www.tropicalhainan.com/hainan-ftp-business-forum/incentives-taxes-finance/do-foreign-talents-with-higher-incomes-enjoy-higher-tax-preferences-could-you-give-an-example/ Tue, 06 Jul 2021 23:14:09 +0000


if the pre-tax annual comprehensive income is RMB 2 million, the tax payable before he/she works in the Port is about RMB 628,000, and the tax payable after he/she works in the Port is about RMB 270,000, representing a decrease of RMB 358,000.



Talents with higher income enjoy stronger preferences]]> Tax, Incentives & Finance Tropical Hainan https://www.tropicalhainan.com/hainan-ftp-business-forum/incentives-taxes-finance/do-foreign-talents-with-higher-incomes-enjoy-higher-tax-preferences-could-you-give-an-example/ https://www.tropicalhainan.com/hainan-ftp-business-forum/incentives-taxes-finance/what-specific-parts-of-individual-income-enjoy-individual-income-tax-policies-for-talents-in-the-hainan-ftp/ Tue, 06 Jul 2021 23:08:19 +0000


Comprehensive income specifically includes four incomes from wages and salaries, labor remuneration, author’s remuneration, and royalties in the Hainan FTP.



Operating income specifically includes income from production and operating activities of individuals, individual businesses, and individual sole proprietorship partnerships in the Hainan FTP.]]> Tax, Incentives & Finance Tropical Hainan https://www.tropicalhainan.com/hainan-ftp-business-forum/incentives-taxes-finance/what-specific-parts-of-individual-income-enjoy-individual-income-tax-policies-for-talents-in-the-hainan-ftp/ https://www.tropicalhainan.com/hainan-ftp-business-forum/incentives-taxes-finance/what-are-the-requirements-for-personnel-to-enjoy-individual-income-tax-policies-of-the-hainan-free-trade-port/ Tue, 06 Jul 2021 23:03:28 +0000 What are the requirements for personnel to enjoy individual income tax policies of the Hainan Free Trade port?



Three conditions are required:



Firstly, working in the Hainan Free Trade Port;



Secondly, belonging to the list of high-level foreign talents and talents urgently needed;



Thirdly, actual individual income tax burden exceeds 15%.]]> Tax, Incentives & Finance Tropical Hainan https://www.tropicalhainan.com/hainan-ftp-business-forum/incentives-taxes-finance/what-are-the-requirements-for-personnel-to-enjoy-individual-income-tax-policies-of-the-hainan-free-trade-port/