Post–customs closure, Hainan is no longer merely a geographic concept, but a strategic platform defined by institutional innovation, policy empowerment, and market liberalization. It represents an ideal gateway for multinational enterprises to establish a foothold in Asia and participate in China’s long-term growth.

Institutional Opening-Up: Building a World-Class Business Environment

The commencement of customs closure operations signifies Hainan’s formal entry into a new regulatory framework of“within the territory but outside the customs zone.” Under this model, Hainan adopts a higher standard of trade liberalization and investment facilitation, fostering a business environment that is market-oriented, law-based, internationalized, and highly efficient.

• “First line liberalized, second line regulated”: Goods entering the Hainan FTP from overseas are subject to zero tariffs, significantly reducing operating costs for enterprises. Goods moving from Hainan into China are regulated in accordance with relevant requirements, ensuring efficient supply chain integration. This framework creates compelling cost advantages for enterprises engaged in processing and manufacturing, warehousing and logistics, and international trade.
• Investment liberalization and facilitation: A comprehensive negative list system is fully implemented, with all sectors outside the list open to investment. Procedures for establishing foreign-invested enterprises are substantially simplified, with most sectors adopting a filing-based system that enables “market entry upon registration.” In parallel, financial opening-up measures — such as capital account convertibility and freer cross-border capital flows — provide enterprises with flexible and efficient financing and investment support.

Policy Synergies: Creating Comprehensive Investment Appeal

The Hainan FTP offers the most competitive tax and industrial incentive framework introduced in China to date, delivering tangible profitability and sustainable growth momentum for enterprises.

• Highly competitive tax regime:
• • Corporate Income Tax (CIT): Enterprises in encouraged industries that are registered and substantively operating in the Hainan FTP are eligible for a reduced CIT rate of 15%.
  • Individual Income Tax (IIT): For high-end and urgently needed talent, the portion of IIT exceeding an effective tax burden of 15% is exempt.
  • Customs duties: Under a “zero-tariff” positive list, raw and auxiliary materials imported for self-use in production or for processing activities under the “processing trade with foreign inputs and markets” model are exempt from customs duties. Enterprises’ self-use production equipment, operational vehicles, and yachts also enjoy zero-tariff treatment.
  • Value-Added Tax (VAT) and Consumption Tax: Eligible exported goods and services benefit from tax refunds or exemptions.
• Targeted industrial policies: Priority is given to tourism, modern services, high-tech industries, and high-efficiency tropical agriculture. At the same time, Hainan is actively fostering emerging sectors such as the digital economy, biomedicine, aerospace technology, clean energy, and fintech — providing foreign investors with clear strategic pathways and substantial growth potential.

Strategic Location and Market Reach: A Gateway Linking China and the World

Located at the heart of the South China Sea, Hainan serves as a vital hub connecting China with Southeast Asia and global markets.

• Asia-Pacific logistics connectivity: Leveraging infrastructure such as Yangpu International Shipping Hub and the Haikou regional international aviation hub, Hainan is building an integrated, international logistics network to support regional and global supply chains.
• Access to China’s vast domestic market: Hainan functions as a frontline gateway to China. Enterprises operating in Hainan can benefit from the FTP’s high-level openness while efficiently accessing China’s market of 1.4 billion consumers — enabling a strategic model of “Based in Hainan, Serving China, Connecting the World.”

Growing with Hainan, Sharing the Dividends of a New Era

The development of the Hainan FTP is a cornerstone of China’s new phase of reform and opening-up. The central government has granted Hainan extensive autonomy in reform initiatives, ensuring policy stability and continuity. Customs closure operations are not an endpoint, but the starting point of a new round of high-level opening-up. Looking ahead, more trade, investment, and financial rules aligned with international practices will be piloted in Hainan, delivering ongoing institutional dividends for investors.

Triide’s Perspectives

Investing in Hainan is akin to investing in China’s next round of growth. Beyond its exceptional natural environment, Hainan offers a carefully cultivated investment ecosystem. It not only provides competitive cost advantages, but also aspires to become a forward looking and innovative platform for global resource allocation. Global entrepreneurs and investors are well positioned to seize this historic opportunity — leveraging on Hainan to establish your strategic base for expansion into Asia Pacific markets, as an R&D hub, a center for manufacturing , or a trade platform — and to participate in shaping the future of this island through mutually beneficial collaboration.

Please email gofurther@triide.com to contact the Triide team. Partner with us to unlock your success in the Free Trade Port.