Region/Countries: Asia, China Industry: Multiple Sectors Date: June 2020

Why this is important to Wisconsin businesses: With liberalized trade, investment and visa policies, the port offers opportunities for Wisconsin companies.

With the construction of the Hainan Free Trade Port, China seeks to elevate its trade and investment facilitation policies to match international standards. The port will work to promote liberalization and facilitation of trade in services, with a negative list introduced to break barriers for overseas service providers. In addition, a “zero tariff” policy will apply to trade in goods. There is no storage period for the goods in Hainan Free Trade Port, and the storage place can be chosen freely. The goods subject to the “zero-tariff” policy are exempt from routine supervision by customs.

The port will impose a maximum of 15% personal income tax for eligible talent. Visa policies will be streamlined as well, with relaxed restrictions and the ability to apply for visa-free entry for commercial trade, visits, family reunions, medical treatment, exhibitions and sports events. The 15-day visa-free stay policy also applies to foreign tourist groups traveling by cruise ship.
On the investment side , the roles of tourism, modern services and high-tech industries are emphasized.

Foreign investors who get involved before 2025 can receive a total corporate tax exemption. The plan includes financial benefits and guarantees for startups from the central government and simplified legal procedures.

Foreign investment will be subject to a management system combining pre-establishment national treatment and a negative list designated for the free trade port, further reducing restrictions and prohibitions within free trade zones. The free trade port will also take the lead in expanding the opening up of the financial service sector, with special consideration for the creation of international marketplaces of energy, shipping, property rights and equities.

The key industrial parks—designed to highlight three major fields (tourism, modern services and advanced technologies)—are expected to play a leading role in the construction of the free trade port.

Hainan is also accelerating construction work on the expansion of Haikou Meilan International Airport to serve the development of its free trade port.

The second phase of the project in Haikou (the capital of Hainan) is expected to be ready for operation before the end of 2020. The new project will help the airport achieve annual throughput target of 4.2 million international passengers right away, with the number expected to reach 10 million in the future.

The offshore duty-free shopping quota has been raised, making Hainan a shopper’s paradise, and an addition increase is proposed to raise the quota to ¥100,000 ($14,130) per person per year. According to Haikou Customs, duty-free sales have brought in ¥55.07 billion ($7.86 billion) in the past nine years.