The General Plan for China (Hainan) Free Trade Pilot Zone was issued by the State Council on Oct 16 to promote high-standard and high-quality reform and opening-up of Hainan FTZ. It introduced a large number of new polices to encourage overseas investment in Hainan FTZ. Below are some key points.
Cancellations and relaxations
1. Cancels restrictions on the proportion of foreign share capital invested in the breeding of new varieties of vegetables and seed production.
2. Delegates the approval rights for foreign capital to access value-added telecommunications services to Hainan province; cancels restrictions on the ratio of foreign share capital invested in domestic multiparty telecommunications services, internet access services for internet users, storage and forwarding services.
3. Removes restrictions on the ratio of foreign share capital in the design, manufacturing and maintenance of ships (including subsections) and trunk lines, branch lines and general aircraft.
4. Cancels the requirement that oil and gas exploration and development must be carried out by means of product-sharing contracts signed by oil and gas companies, with foreign cooperative franchises approved by the Chinese government.
5. Cancels restrictions on foreign share capital in international maritime transport companies and international shipping agency companies.
6. Cancels foreign investment restrictions in new energy vehicles.
7. Substantially relaxes foreign capital market access. In particular, the maximum ratio of foreign share capital in life insurance companies is increased to 51 percent.
1. Allows foreign investors to invest in special domestic internet virtual network businesses (with foreign capital shares of less than 50 percent);
2. (Chinese holding) foreign investment performing groups are permitted.
3. Wholly-owned foreign construction companies established in the FTZ are allowed to undertake construction projects within the zone, and not be subject to restrictions on the investment ratio of both parties in the project.
4. Foreign professionals, who have obtained qualifications to be first-class registered architects or first-class registered structural engineers in China, are allowed as partners to set up architectural engineering design firms, according to their corresponding qualifications.
5. Professionals in the financial, construction, planning and patent agency fields - with Hong Kong and Macao practicing qualifications - are allowed to provide professional services for companies in the FTZ after filing.
6. Allows Hainan to launch pilot projects to temporarily open waters to international yachts.
1. Supports piloting of customs tax guarantee insurance. Simplifies the export of licensing procedures for wild animals and plants.
2. Supports the establishment of commodity futures bonded delivery warehouses in special customs supervision areas and bonded supervision areas.
3. Supports the development of cross-border e-commerce providers, global maintenance and other formats, construction of overseas warehouses for key countries and key markets.
4. Supports establishment of international cultural and art trading places in special customs supervision areas, organizes international exhibitions, auctions and trading of bonded cultural and art works.
5. Supports development of offshore spot trading and bonded deliveries of bulk commodities such as rubber.
6. Supports establishment by multinational corporations and trading companies of international or regional trade networks and creates regional offshore trade centers.
7. Supports qualified oil suppliers carrying out bonded oil supply business for international navigation vessels and construction of bonded oil supply bases.
8. Promotes financial opening and innovation of the FTZ. Further expands cross-border use of the renminbi, explores the convertibility of capital accounts, deepen reforms of foreign exchange management.
9. Supports establishment of consular agencies in Hainan by the Belt and Road Initiative countries.
10. Supports Belt and Road Initiative countries developing science and technology personnel exchanges, building joint laboratories and conducting innovation cooperation in technology parks and technology transfers.
11. Supports development of stem cell clinical frontier medical technology research projects.
12. Supports holding of large-scale international exhibitions and festivals, such as international commodity expositions, international film festivals, the China (Hainan) International Marine Industry Exposition, as well as exhibitions suitable for Hainan's industrial characteristics.
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