Haikou free trade zone in China is one of the newest export promotion zones. A free trade zone with an impressive array of manufacturing and trading companies, it provides for a good number of incentives and inducements for the companies operating there.
A number of features that the units get while working at the Haikou free trade zone are summarized as such:
Trading companies in the Haikou FTZ in China are levied up to a maximum of 15% enterprise income tax rate. However, companies with more than a decade of operations at the Haikou FTZ are provided with a tax holiday in the first year of profits and 10% flat income tax for the next two consecutive years.
Companies are allowed to secure processing orders and enter into trade contracts with other units in the zone. They can also trade with companies outside the zone with designs, raw materials and equipments.
Units in the Haikou FTZ in China are allowed to purchase raw materials and semi-finished products made in China through domestic trade and processing inside the zone.
Processing units in the Chinese free trade zone of Haikou may apply for permission to sell a part of their products inside the country after paying tariff and securing a license for imported materials.
The materials imported at the Haikou FTZ in China are fully bonded. When its products are shipped across the country, tariffs will be imposed on the imported raw materials.
The warehousing units inside the Haikou free trade zone can store all kinds of goods except those prohibited by the state. Imported goods into the domestic market can be stored here too.
Domestic and international business organizations operating from the Haikou FTZ can display their import and export products and use the exhibition halls.
Usual warehousing operations such as sorting, sub-packing, labeling, marking are allowed for the warehousing units at the free trade zone.
The companies registered in foreign lands have to form as independent legal entities and secure a license for doing trade, imports and exports from the free trade zone.
Trading companies do not have to pay any VAT while doing trade with each other and with import and export trade provided they have operations within the Haikou in China.
Trading units within the Haikou free trade zone are allowed to retain in full their foreign exchanges and carry on with the settlement and sale of exchange in banks, within the guidelines of concerned regulatory authorities.
Irrespective of the nature of businesses and foreign trade handled by companies inside the Haikou trade zone, all are treated as exports and relevant benefits are accrued to them.
As part of the future expansion plans, the local authorities at Haikou free trade zone are contemplating of setting up software and hardware parks at the zone. In addition to, units dealing in with chemicals, electronics, electrical appliances and toys all are going to be set up and expanded in near future.
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