When considering doing business in China, the first question that always comes to your mind is: in which city should I start my business? Choosing the right city to pursue your success in China is not a simple question. There are numerous factors to consider. The business attractiveness landscape is the comprehensive result of the business resource aggregation, urban hubness, resident activity, and future plasticity and development potential.
To help you choose your ideal location to start your business, Hongda has planned a series of blogs on the business attractiveness and eco-system in major cities and regions across China, including Beijing, Shanghai, Guangzhou, Shenzhen, Hainan, and Hong Kong S.A.R.!
Still not sure how to choose the optimal destination for your investment? Simply book a free meeting with Hongda’s consultation and we will discuss your business plan and advise you on the most suitable city for you to run your company. If you want to know the investment landscape of any other cities in China, you are also welcome to contact us and let us know your requirements!
Related blogs on China city series:
In our previous blogs, Hongda focused on some of the major cities in China: Guangzhou, Shanghai, and Beijing. Today, let’s look bigger! We will be introducing a whole province, Hainan Province. Just follow Hongda to Hainan and see what makes Hainan an ideal place for your investment.
Hainan is the most south province of China, covering a total area of 35 thousand square kilometers of land and 22 million square kilometers of sea. Meaning ‘south of the sea’, Hainan province can be divided into the Island of Hainan, which made up over 95% of the province’s land area, and numerous small islands scattered in the South China Sea.
Hainan was separated from Guangdong province and formally established in 1988, making it the youngest province in China. In 2008, the State Council approved the local government’s plan to build Hainan as the International Tourism Island, followed by the free trade port system in 2018. Since then, rapid economic growth has taken place in Hainan and international investments in this province have accelerated to settle. In June 2020, the Overall Plan for the Construction of Hainan Free Trade Port further expanded the pilot scale to the entire island province.
China has determined to transform Hainan into a world-class free trade port by 2050 recognized by the international investors, who has the competitiveness with those mature spots like Singapore and Hong Kong. There are surely your chances as well to invest in this island with beautiful mountains and beaches. Keep reading to find out more about the Hainan and see where the opportunities lie!
The huge area offers international investors opportunities in diverse industries, especially in sectors such as telecommunications, tourism, and daily consumption, making it the popular destination globally. Among them, there are four encouraged industries that worth your extra attention:
Tourism:
Modern services:
High-tech:
Tropical agriculture:
After determining the right industry to pursue your business, choosing the optimal industrial park or the development zone to land your operation is also crucial. Now let’s follow Hongda into some ideal locations to launch your projects.
Tourism: Boao Lecheng International Medical Tourism Pilot Zone
The Boao Lecheng International Medical Tourism Pilot Zone brings together domestic high-end tourism medical services and international cutting-edge medical achievements to form an international medical technology service cluster industrial zone. It is the only "medical special zone" in China that opens the medical market to the foreign investors. In this area, 24 medical institutions are in operation, and more than 20 oncology medical institutions are under construction or in preparation, covering medical industries such as prevention and treatment, beauty, anti-aging, health management and rehabilitation. As the core of investment in Boao, medical services, health management, and health services are strongly focused to promote cancer treatment, TCM and western medicine integration, medical examinations, rehabilitation center, and medical information service institutions.
Modern Services: Sanya Central Business District
Sanya CBD area is located in the center of Sanya City, coving an area of 442.15 hectares with 4 major sub-districts, the Phoenix Coast, East Coast, Yuechuan, and Hailuo. Its main aim is to support the modern services in Hainan, with outstanding support on headquarter economy and modern commerce. Policies regarding the support on professional services (accounting firms, law firms, consulting firms for cross-border enterprises), financial services (cross-border financing platforms, fund, capital and asset management agencies, etc.), and culture and recreation (artwork exhibition and auction, sports, recreation, entertainment services, and festival events have been implemented.
High-tech: Haikou National High-tech Industrial Development Zone
Haikou National High-tech Industrial Development Zone was approved by the State Council in 1991 as one of the earliest national science parks in China, with a planning area of 49.3 square kilometers. Its focuses on the development of bio-pharmacy, eco-friendly industrials, advanced manufacturing. A series of provincial, municipal, and high-technology zone industrial support policies are implemented in this area. These policies cover the pharmaceutical industry, biodegradable industry, financial industry, headquarters economy, as well as technology innovation, talent recruitment, and housing.
1. Incentive Benefits for Enterprise taxes:
According to the ‘Notice on the preferential corporate income tax policies of Hainan Free Trade Port’ issued by the Ministry of Finance and the State Taxation Administration, a capped 15% corporate income tax is implemented for taxpayers engaged in the ‘encouraged industry category of Hainan FTP’. For enterprises in tourism, modern services, and high-tech innovation, newly formed foreign branches and FDI players can enjoy a tax exemption of corporate income tax.
To enjoy the policies, there are two requirements that you should pay extra attention to: (1), your company needs to engage in ‘encouraged industry sectors’, and (2) you also must carry out substantial business operations in the HFTP. According to the general criteria, the substantial business operations can be determined as the place where a company's shareholder meetings, board meetings, or other management meetings are held; or the place where a company maintains its books and records. Based on Hongda’s practices, we also suggest that information regarding total assets, gross revenue, salary expenditure, and number of employees can also be provided for the tax authorities to determine. You are welcome to book a free meeting with Hongda (link to book a meeting) to discuss your own situation and let us help you find the best policies!
2. Incentive Benefits for Corporate Operation:
(1). Self-used production equipment for enterprises registered in Hainan Free Trade Port;
(2). Transportation vehicles and yachts operating in Hainan Free Trade Port;
(3). Hainan FTP based enterprise’s import of raw and auxiliary materials for the production of export goods or self-use consumption;
At the same time, for any goods produced by encouraged enterprises with local raw materials, or products made with imported raw materials and have a value added over 30%, a zero-tariff benefit is also implemented.
3. Incentive Benefits for Talent Recruitment:
In order to support the construction of Hainan Free Trade Port, the relevant preferential personal income tax policies were issued. For high-end talents and in-demand talents working in Hainan Free Trade Port, the portion of their actual personal income tax burden exceeding 15% will be exempted. Income that enjoys the above preferential policies includes comprehensive income from the Hainan Free Trade Port (including four types of income: salary, labor remuneration, author remuneration, and royalties), operating income, and talent subsidy income recognized by Hainan Province.
With the outstanding policies, Hainan FTP will surely be your ideal investment destination, especially when engaging in tourism, high-tech, and modern service industries. In order to make your business even more successful, it is always necessary to the preferential policies related to corporate income tax and the company's business model into consideration.
The Hongda team will pay more attention to the overall regional planning of the Hainan Free Trade Port and the introduction of relevant supporting policies. We will continue to maintain close communication with governments, chambers of commerce and various enterprises in Hainan. The province's overall business environment will be improved, and investors from various industries will realize more investment, cooperation opportunities and innovative business models in the Hainan Free Trade Port. If you want to find your own opportunities in Hainan, please free feel to book a free meeting with Hongda and discuss your plan! We are always happy to help!