The thesis 为什么是海南
Why the Hainan Free Trade Port is the smart way in.
Everyone prices the Shanghai route. Beijing built a cheaper door on purpose, an island-sized free trade port designed to pull foreign business in. This page lays out the numbers, the catch, and who it's actually for.
The timing 时机
The island-wide customs closure is live. It is still early.
Hainan's special customs regime isn't a proposal. It's operating. The island now runs as a sealed customs territory: open at the "first line" to the world, managed at the "second line" into the mainland.
2018, The announcement
Beijing designates the whole of Hainan a pilot free trade zone, the largest in China by far.
2020, The master plan
The Hainan FTP master plan publishes the incentives: 15% tax, zero tariffs, freer flows of capital and people.
Dec 2025. Customs closure
Island-wide special customs operation begins. The incentives stop being pilot policy and become infrastructure.
2035. Full liberalisation
The stated trajectory: a mature, internationally competitive free trade port. Early entrants grow up with it.
In the world's press 国际报道
Don't take our word for it. Take theirs.
Morning Post
"China's Hainan launches separate customs regime allowing tariff-free imports"
Read the coverage THE STATE COUNCIL中国政府网 · english.gov.cn"China turns Hainan Island into special customs supervision zone in opening-up drive"
Read the coverage ASIA TIMES"China's Hainan Free Trade Port heralds new era of openness"
Read the coverage CHINA BRIEFINGby Dezan Shira & Associates"Hainan to launch independent customs operations December 18"
Read the coverageIndependent coverage of the Hainan Free Trade Port; each link opens on the publisher's site.
The obvious route 常规路线
The conventional route, fully costed.
A mainland WFOE works. Half a million foreign companies prove it. But "works" and "priced for you" are different things.
On the mainland you pay 25% corporate income tax before surcharges. Your imported equipment and stock clear customs at full duty plus VAT. Your foreign managers pay up to 45% personal income tax. And your competitors set all this up years before you, at lower rents than you'll get today.
Mainland setup, honestly itemised
- Corporate income tax
- 25% standard rate. Incentive zones exist, but are narrow and sector-specific.
- Imports
- Tariffs + 13% VAT on most goods and equipment at the border.
- Your expat team
- Progressive IIT to 45%; visas required before anyone lands.
- Competition
- The most saturated, most expensive cities in China.
The comparison 对比
The Hainan Free Trade Port vs mainland China.
Same country. Same legal system. Same access to 1.4 billion consumers. Different terms of entry.
| Line item | Mainland (Shanghai / Shenzhen) | Hainan Free Trade Port |
|---|---|---|
| Corporate income tax | 25% standard | 15% for encouraged industries with island substance |
| Personal income tax. Key talent | Progressive, up to 45% | Capped at 15% for qualifying talent |
| Import tariffs | Standard duties + VAT on entry | Zero tariff on 6,600+ goods entering the island |
| Selling into the mainland | Direct. You're onshore | Direct. Full Chinese entity; goods with 30%+ value added in Hainan enter tariff-free |
| Foreign ownership | Open, subject to national negative list | Open, with a shorter FTP negative list in key sectors |
| Getting your team in | Visa before travel, then permits | Visa-free entry for 85 nationalities; permits handled on-island |
| Capital & data flows | Standard SAFE controls | FTN accounts and progressively freer cross-border flows under FTP policy |
| Published Hainan FTP policy as of mid-2026. Incentives require qualification and real operations. We verify your case before you spend anything. Figures reviewed against official sources; not tax advice. | ||
Run your numbers 算一算
Put your own profit through the Hainan tax math.
The comparison table above is policy. This is your business. Drag the slider to your projected annual profit and see what the 15% corporate income tax rate keeps in your company.
$750,000
Illustration at headline CIT rates. The 15% rate applies to encouraged industries with substantive operations in Hainan. We confirm your eligibility in writing before you commit.
How goods move 货物流转
The 30% value added rule, in motion.
Since the December 2025 customs closure, goods enter Hainan from anywhere in the world at zero tariff. Add at least 30% value on the island, and they continue into mainland China with no import tariff at all. Your company sits at the center of that loop.
Have your own numbers assessed by a specialist.
Book a free consultationThe advantages, one by one 政策红利
The Hainan Free Trade Port: seven advantages.
15%
Corporate income tax
Ten points below the mainland rate, for companies in the encouraged-industries catalogue with substantive island operations. On a ¥10m profit, that's ¥1m a year staying in your business.
0
Tariffs on 6,600+ goods
Equipment, raw materials, vehicles and consumer goods enter Hainan duty-free under the zero-tariff catalogues, a structural cost advantage for importers and processors.
30%
The value-add bridge
Process goods in Hainan to at least 30% added value and they cross into the mainland with zero import tariff. Import duty-free, add value, sell to 1.4 billion people.
15%
Talent tax cap
Qualifying professionals pay personal income tax capped at 15%. Against up to 45% on the mainland. Hiring senior foreign staff stops being a tax punishment.
85
Countries, visa-free
Citizens of 85 countries enter Hainan without a visa. Fly in, inspect your operation, meet your team, open your bank account. Try that in Shanghai.
4
Freer flows
Trade, capital, people and data move more freely here than anywhere else in China. FTN multi-currency accounts, streamlined forex, open data pilots.
2035
The trajectory
Hainan's policy path runs to 2035: a fully mature free trade port on the model of the world's great entrepôts. Companies that enter now grow up inside the system, with track record, relationships and grandfathered positions that late arrivals will pay for.
Straight answer 适不适合
Who Hainan is built for, and who it is not.
Hainan works hard for 适合
- Importers & exporters. Zero-tariff entry plus the 30% value-add bridge into the mainland.
- Traders & sourcing businesses, a Chinese entity, Chinese bank account and customs standing, at FTP cost.
- Holding & HQ structures. 15% tax and freer capital flows for your China operations.
- Light processing & assembly. Import duty-free, add value, ship inland tariff-free.
- Offshore trade & services. Book international business through an FTP entity with FTN banking.
Honestly, not for 不适合
- Businesses that need daily physical presence in Beijing or Shanghai. Client-site consulting, city retail. Register where your customers are.
- Sectors still restricted under the negative list. Parts of finance, media and telecoms remain closed or capped for foreign owners.
- Anyone hoping for a brass-plate shell. The incentives require real substance; a mailbox company gets audited, not rewarded.
- Purely domestic businesses with no China nexus at all. If you'll never trade with, in or through China, you don't need this island.
If you're in the right column, we'll tell you on the first call, and point you somewhere better suited. That policy costs us sales and wins us referrals.
The alternatives 替代方案
Hong Kong, Shanghai, or Hainan.
Fair question. Here's the honest matrix.
| Consideration | Hong Kong | Shanghai / Shenzhen | Hainan FTP |
|---|---|---|---|
| Corporate tax | 8.25 to 16.5% | 25% | 15% (qualified) |
| Is it a Chinese entity? | No. Offshore; selling inland still means import duties or a mainland subsidiary | Yes | Yes. Direct mainland market access |
| Import tariffs into China | Full tariffs at the border | Full tariffs at the border | Zero into Hainan; zero inland at 30% value-add |
| Operating cost | Among the highest on earth | Tier-1 city costs | Fraction of both. Rent, salaries, living |
| Best use | Offshore finance & holding | Onshore presence at premium cost | China market entry with FTP economics |
| Many structures combine these. E.g. a Hong Kong holding company owning a Hainan operating entity. That's a design conversation, not a checkbox. | |||
The bridge 如何落地
The policy is proven. Execution is what you hire.
Policy is only as good as your registration, your tax qualification and your bank account. That execution is our entire business.
1 · Company formation
WFOE registered, chops cut, licences issued.
2 · Tax qualification
Encouraged-industry filing and the substance plan that keeps 15% yours.
3 · Banking & capital
Corporate and FTN accounts opened, capital injected correctly.
4 · People & visas
Z visas, work permits and the 15% talent registration for your team.
Hainan, specifically 关于海南
Hainan, answered.
01Do I need to live in Hainan to get the Free Trade Port benefits?
No. Your company needs real operations on the island, an address, activity, accounting. You can live anywhere. The 15% personal tax cap is the one benefit tied to individuals actually spending qualifying time in Hainan.
02Who qualifies for Hainan's 15% corporate income tax?
Companies in the encouraged-industries catalogue with substantive operations on the island. It's policy, not a promotion, but it's conditional: your activity must sit in the catalogue and your operations must be real. We assess this before you register, in writing, and structure the substance plan so you keep the rate at audit time.
03Which industries qualify for Hainan Free Trade Port incentives?
The catalogue is broad: trading and distribution, processing and manufacturing, logistics, tourism and hospitality, modern services, tech and R&D, headquarters functions, and more. Restricted sectors under China's negative list remain restricted. Bring us your actual business model. That's a ten-minute answer on a call.
04Can my Hainan company sell to the rest of China?
Yes. It's a full Chinese legal entity. It invoices mainland customers like any local company. For goods, the 30% value-add rule additionally lets Hainan-processed products enter the mainland tariff-free.
05How does the 30% added-value rule work?
Import components or goods into Hainan at zero tariff, process them on the island, and if that processing adds at least 30% to their value, the finished goods enter mainland China with no import tariff. It is the rule that turns Hainan into a manufacturing and assembly gateway to the Chinese market. We assess whether your product and process meet the threshold before you commit.
06What counts as substantive operations in Hainan?
Substance. Hainan rewards companies that genuinely operate there and audits ones that pretend to. The incentives are real, published policy, but they're earned with an address, activity and clean books, not with a registration certificate alone. That's exactly the work we do.
Client words 客户之声
From people already on the island.
I was done managing manufacturers through a broker overseas. HCSG registered my company while I stayed focused on product. Best business decision I’ve made in years.
Samuel Lamont Chatman II海南查特曼户外运动有限公司 · licence on fileWhat I respect: they told me first what would NOT work for my case, then gave me a structure the tax bureau wouldn’t question. That honesty saved me real money.
Ononiwu Ifeanyi Kingsley海南帝金进出口贸易有限公司 · licence on fileSix months watching YouTube videos, too scared to start. One call explained more than all of them. Licence in the first week, set up in five. I only regret waiting.
Adil Chaudhary Asfand Yar海南乔杜里贸易有限公司 · licence on fileReal clients, real registrations, every review is paired with that client’s watermarked business licence. See the licence wall.
For advisers 合作伙伴
Advising clients into China? Deliver it, through partnership.
If your firm advises companies heading into China, the Global Partnership Programme gives you a licensed Haikou delivery team, a transparent profit share and the Hainan Builder partner portal. By application, regional seats are limited.
Next step 下一步
Find out what Hainan would save your business.
Bring your business model. We'll bring the catalogue, the tax math and a straight answer, including "don't do this" if that's the truth.