On the 1st of June 2020, the Master Plan for Hainan’s Free Trade Port was unveiled by the Chinese central government. This document proposes in total 39 new policies with regards to the liberalization and facilitation of trade, investments and cross-border capital flows to develop Hainan into a global state-of-the-art free trade port within the next five (5) years.
The highlights of the proposal are as follows:
1. Freedom of trade
The free trade port will adopt an arrangement characterized by "zero tariffs" on cargo trade. In addition, the enterprise income tax for companies in certain industries shall only be 15%. Similiarly the individual income tax for highly-skilled talent and talent in short supply shall be 15% at the most.
For the service industry the policy measures aim to liberalize market access and operations with a reduction of restrictions on cross-border trade in services.
2. Freedom of investment
Investment and “ease-of-doing-business” measures will be implemented encompassing both the setting-up of new businesses and to the deregistration and insolvency procedures of existing businesses.
Increased penalties for intellectual property infringement combined with a strengthening of the application of blockchain technology in intellectual property transactions which form part of a “Property Rights Protection System”.
3. Freedom of capital flows
The master plan brings a commitment to building a multi-functional free trade account system through implementing a policy of opening up of the financial industry in Hainan. This shall be acomplished through the removal of restrictions on offshore financing for ships and aircraft projects enablinhg the the creation of an international energy and shipping industry.
4. Freedom of entry and exit
A commitment to provide immigration facilities which will attract foreign talents for the purpose of making investments or will engage in academic exchanges and business activities.
A new wider visa-free entry policy with a longer free stay period shall be introduced for the province.
5. Freedom of transport
A less constrained and more open shipping system with further relaxation of airspace controls and relaxation of restrictions with regards to the right of navigation shall be introduced in the territorial waters around Hainan.