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Hainan Company Formation

Updated:2018-5-2 14:33:59    Source:www.tannet-group.comViews:1233

Hainan company formation is also referred to Hainan company registration, Hainan business setup, Hainan company incorporation, etc. Due to the past Boao Asia Forum held in this tropical island, Hainan once again draws the attention of foreign investors from all over the world. Nowadays, Hainan provides plenty of opportunities for foreign businesses.

Brief Introduction to Hainan
Hainan is the smallest and southernmost province of China, consisting of various islands in the South China Sea. There are a total of ten major cities and ten counties in Hainan Province. Haikou on the northern coast of Hainan Island is the capital while Sanya is a well-known tourist destination on the southern coast. The other major cities are Wenchang, Qionghai, Wanning, Wuzhishan, Dongfang, and Danzhou.

The climate of Hainan varies from subtropical to fully tropical. Compared to most of mainland China, the air quality of Hainan is far higher since it strays away from factory pollution. Hainan’s pillar industries encompass agriculture, tourism, petrochemical industry, electronics and information, and marine bio-pharmaceutical industry.

Preferential Policy and Government Support
According to a guidance issued by the Communist Party and the State Council, China aims to establish the Hainan Free Trade Zone (FTZ) by 2020 and build a Hainan free trade port by 2025. By 2035, Hainan’s free trade system should be completely developed.

Hainan will benefit from relaxed rules for setting up medical institutions, importing medical equipment and pharmaceuticals, and allowing foreign doctors to practice. Additionally, limited forms of gambling, namely horse racing and sports lotteries, will be permitted in Hainan, as previously rumored. Macau is currently the only jurisdiction in China that allows gambling.

As President Xi Jinping said, Hainan’s strategic positioning near ASEAN makes it an important location for trade with Southeast Asia. Hainan has the advantage of being on the front line with ASEAN countries. It should be a pioneer in opening up.

Principal Business Models for Foreign Investment
Before setting up a business, foreign investors should determine their organizational structure according to the operations of their enterprises at their own discretion. There are three principal business models for foreign companies seeking to establish themselves in China: Wholly Foreign Owned Enterprise (WFOE), Joint Venture (JV), and Representative Office (RO).

A Wholly Foreign-Owned Enterprise (WFOE, sometimes incorrectly WOFE) is a common investment vehicle for mainland China-based business wherein foreign parties (individuals or corporate entities) can incorporate a foreign-owned limited liability company. The unique feature of a WFOE is that involvement of a mainland Chinese investor is not required.

A joint venture (JV) is a business entity created by two or more parties, generally characterized by shared ownership, shared returns and risks, and shared governance. Companies typically pursue joint ventures for one of four reasons: to access a new market, particularly emerging markets; to gain scale efficiency by combining assets and operations; to share risk for major investments or projects; or to access skills and capabilities.

A Representative Office (RO) in China is the local representative of your business, a place where local Chinese clients and contacts can meet you, and a place that can exert control over your brand, marketing, and supply chain in China. It can't perform any business activities related to making profit however.

Contact Us
If you have further queries, don’t hesitate to contact Tannet anytime, anywhere by simply visiting Tannet’s website, or calling Hong Kong hotline at 852-27826888 or China hotline at 86-755-82143512 or 86-755-82143181 or emailing to You are also welcome to visit our office situated in 16/F, Taiyangdao Bldg 2020, Dongmen Rd South, Luohu, Shenzhen, China.

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