Industrial Policies, Land Policies and Financial Policies for investing in Hainan
1. Industrial Policies
No matter what the scale is, all projects in Hainan are to be approved by Hainan Province only if they fit national industrial policies, are not projects restricted by national quotas or those foreign invested projects of resource developing, transportation or telecommunication infrastructure projects, and their construction and production are not related to national policy to promote comprehensive balance in economy. Other foreign invested projects or projects based on foreign loans are also to be approved independently by Hainan Province only if their construction and operation don’t involve national comprehensive balance, and are not related to national export quotas.
Domestic investors are allowed to invest in harbours, ports, airports, highways, railways, power stations, coal mines and hydro projects in the form of joint investment or cooperation. They can independently operate these facilities and relevant facilities.
Foreign investors can set up foreign invested banks, joint banks and other financial organizations with approval. With the approval from the People’s Government of Hainan Province, foreign investors can exploit mineral resources in Hainan according to the principle of reasonable mining with reward. Foreign investors’ investment, purchased assets, industrial property right, and investment profit, and other legal interests are protected by national laws.
They can be legally transferred and inherited.
2. Land Policies
Fee-charged land-use system applies to all state- owned lands in Hainan. The use right of land can be sold off, transferred, rented, inherited or used for other business activities. For sold out lands, the longest contract term is 70 years, and contracts can be renewed. The maximum term of collective land sold out, or used for joint or joint-stock enterprises, is 50 years. Collective land can also be sold out for planting, forestry, animal husbandry, or fishing, with maximum term of 50 years.
Under special conditions, the contract term of state lands and collective lands can be more than 30 years with approval from the provincial government. The contracted land for rent use can be transferred, rerented, or mortgaged with approval from original administrations if the rent has been paid and the land has been developed as contracted. For those idle lands which the state should take back for free, if the projects fit national policies and overall land use planning, the land occupying enterprises have capacity to invest and the projects fit national industrial policies, they can be allowed to continue to develop.
Domestic and overseas investors can establish cooperative or independently invested companies to develop land by patches (including state-run farms). The developed land can be transferred within land use term, or used as mortgage in banks. For lands used for hydro projects, education and research institutions, hi-tech project lands approved by provincial government, and land developed from barren hills, barren lands, grassland, waters, or wetlands for agricultural use (all these refer to state lands), fees of assignment can be appropriately reduced with approval from the governments of city, county or autonomous county.
3. Financial Policies
Regulations of Foreign Investment in Hainan Special Economic Zone stipulate series of favorable policies for foreign invested enterprises: in foreign exchange control, foreign invested enterprises can freely choose any bank to open foreign exchange account. All foreign exchange incomes must be deposited to the account. Redundancy and shortage of foreign exchange can be adjusted in the Hainan Foreign Exchange Adjustment Center.
They can also be adjusted outside the province after approval of the Foreign Exchange Office where the enterprise is located. Foreign invested enterprises can borrow foreign exchange from both home and abroad. For loan from abroad, Hong Kong and Macao, the enterprises should register in the Foreign Exchange Office within 15 days of loan.
Enterprises can reserve spot exchange gained from exporting or other business according to regulations of local branch of People’s Bank of China (PBOC). The profit made by foreign-invested enterprises can be remitted overseas with the requirement of submission of the foreign exchange allocation resolution made by board of directors or similar bodies of the enterprise, and relevant tax receipts.
And no income tax applies to the remitted fund.
----------- By Investment Promotion Agency of Ministry of Commerce.P.R.C
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