Company incorporation in Hainan is a good investment choice for foreign investors doing business in China. Hainan lies at the southernmost tip of China, facing Guangdong Province in the north across the Qiongzhou Strait; the Democratic Republic of Vietnam in the west across the Beibu Gulf, and Taiwan Province in the east across the South China Sea. Hainan’s pillar industries encompass agriculture, tourism, petrochemical industry, electronics and information, and marine bio-pharmaceutical industry.
Preferential policy for business setup
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.
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Types of business entity 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).
How to set up a business in Hainan
1. Choose a local presence. Your business presence may be in the form of a wholly owned foreign enterprise, a contractual joint venture, an equity joint venture, a representative office.
2. Carefully define your business scope for your NewCo. It is critical to carefully define your business scope so as to be permitted or encouraged to set up the presence.
3. Select the right location for your business operation. Many business owners are unaware of just how important location and space are to their business. Getting the right office space is essential from the beginning.
4. Confirm the minimum registered capital for operation. The Chinese government requires certain minimum registered capital for various types of businesses. However, local Industry and Commerce Administrations may decide on your minimum registered capital based on their judgement of your business scope and operation scale.
Contact Us
If you have further inquires, please do not hesitate to contact Tannet at anytime, anywhere by simply visiting Tannet’s website www.tannet-group.net, or calling Hong Kong hotline at 852-27826888 or China hotline at 86-755-82143422, or emailing to tannet-solution@hotmail.com. 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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