Convention and Exhibition Industry of Hainan Province

The thriving convention and exhibition industry of Hainan province, China's southernmost tropical island, is expected to attract 30 million overnight attendees and take in 40 billion yuan of revenue by 2020.

In the first three quarters of 2018, the province hosted 14,200 conventions (all with over 100 attendees), up 14.8 percent year by year; The number of large-scale international conferences totaled 92, up 46 percent year by year; The exhibition area for 90 expositions recorded over 930,000 square meters, up 8.6 percent year on year.

The provincial capital Haikou alone hosted over 9,000 conventions and exhibitions, bringing in a business revenue of 12.2 billion yuan, increasing by 18 percent compared with the same period last year. By the end of October 2018, there are 12,960 convention and exhibition enterprises registered in Haikou city.

In 2017, Hainan held nearly 18,000 conventions, attracting a total of 19.5 million overnight attendees, and industry revenue reached 14.5 billion yuan (about $2.2 billion). According to figures released at the China International Conference Industry Week, the average annual revenue growth of the industry hit 12 percent over the past three years. The added value of convention and exhibition industry reached 8 billion yuan, increasing by 15.4 percent. It's the fourth fastest growing pillar industry in Hainan.

The tropical island province is intending to build itself into an international convention and exhibition center. It has been well known for hosting grand events, including the Boao Forum, a BRICS Summit, the first Lancang-Mekong Cooperation Leader's Meeting, and a Roundtable Conference on China-Africa Cooperation.

Hainan enacts preferential policies for industrial parks

Hainan has announced a raft of measures to boost the development of industrial parks and has collected tax revenue of 22.47 billion yuan ($3.25 billion) in 24 key industrial parks in the first half of 2018, according to the Hainan Provincial Bureau of Statistics.

It unveiled a package of incentive policies in the three fields of talent introduction, industrial promotion and taxation structure.

Talent introduction: Hainan is piloting schemes to give talents high-level monetary incentives and other forms of support. The provincial government has made a specific instruction on bringing in talents.

Industrial promotion: Hainan has released various preferential policies to support strategic emerging industries, high-tech, Internet, e-commerce and small and medium-sized enterprises (SMEs), creating a solid foundation for their development.

Taxation awards: Hainan has introduced a provincial tax structure that gives incentives to three major industrial parks, namely, the Yangpu Economic Development Zone, the Hainan International Tourism Island Pilot Zone and the Boao Lecheng International Medical Tourism Pilot Zone.

Municipal and prefectural governments are also ramping up incentives. For example, Haikou has stipulated 100 percent financial rewards based on the local retained portion of industrial parks' annual tax increment surpassing one million yuan and will subsidize transport costs of industrial enterprises making annual tax payments of over five million yuan. Chengmai county has also drawn up a list of each year's top 10 internet companies and rewards companies paying over10 million yuan in tax with 500,000 to one million yuan to be allocated to team management.

Preferential policies have stimulated local industrial development and led to the emergence of many industry clusters. For example, the pharmaceutical sector is thriving in the Haikou National High-tech Zone with a tax base of 1.63 billion yuan in the first half of 2018. Service sector clusters, as represented by the Hainan Eco-software Park, have also seen steady development with the 510 newly registered companies in the park paying gross tax of 1.23 billion yuan.

Brief Introduction To Investment Environment In Hainan China

 Hainan [Photo/VCG]

Situated at the southernmost tip of China, Hainan overlooks Guangdong across the Qiongzhou Strait to the north, Vietnam across the Beibu Bay to the west. It is at the center of the Asia Pacific economic circle with ready access to international shipping routes of the South China Sea. 

It covers a land area of 35,400 square kilometers and administers neighboring Xisha, Nansha and Zhongsha islands, as well as their waters. The central Hainan Island is dome-mountain shaped and surrounded by lower flat land. Mountains, hills, tablelands and plains form the annular and laminar landform with obvious cascade terrain structure.

A pleasant tropical maritime climate makes Hainan Island an ideal habitat, especially for seniors or those seeking health benefits. The island knows no winter and has an annual sunshine duration of 1,750 to 2,650 hours, a yearly average temperature of 23 C to 26 C, and an average annual rainfall of above 1,600 mm.

The total population is approximately 9.25 million and consists of diverse ethnic groups, including Han, Li, Zhuang, Miao and Hui. Approximately 23 out of every 100,000 people in Hainan live to a grand old age of over 100.

Hainan boasts rich biological resources and enjoys the reputation of a "green treasure island". With a wide range of tropical plants, flowers, fruits and herbs, Hainan is the largest tropical gene bank of China. It also has rich oil, natural gas, ferrous metals, non-ferrous metals, sea salt and soil resources.

Economic Overview

Hainan Island, part of the southernmost province of China, is not only the largest special economic zone in the country but also a key link on the 21st Century Maritime Silk Road. With its dynamic and vibrant economic developments, especially the gradual exploration of establishing the China (Hainan) Pilot Free Trade Zone and a free trade port with Chinese characteristics, Hainan has attracted investors from all around the world.

In the year 2017, Hainan's GDP achieved 446.25 billion yuan ($65.3 billion), an increase of 7 percent compared with 2016. The added value in the primary industry was 97.93 billion yuan, increased by 3.6 percent; that in the secondary industry was 99.71 billion yuan, increased by 2.7 percent; that in the tertiary industry was 248.61 billion yuan, increased by 10.2 percent. The ratio of the three industries is 22.0:22.3:55.7, indicating that the effect of Hainan’s service industry in supporting local economic development was enhanced by that year.

Pillar Industries

To accelerate and optimize industrial structure in Hainan province as a new economic growth point, and promote Hainan's comprehensive, sustained and healthy development economically and socially, instructions to adhere to ecological red lines have been implemented. According to the Main Functional Area Planning in Hainan province and the red line of ecological protection requirements, the overall development of space and industrial layout was formulated based on the province's economic and social development over a period of time.

There are 12 key provincial cultivation industries:

Tourism

On the premise of protecting the ecological environment, the province focuses on the development of marine tourism, medical tourism, shopping tourism, convention and exhibition tourism, sport tourism, rural tourism, forest tourism, RV camping tourism and characteristic urban tourism. 

Tropical feature high-efficiency agriculture

The province mainly focuses on enhancing off-sea breeding, developing natural rubber, consolidating and developing aquaculture of winter vegetables and melons, speeding up the development of tropical fruits, promoting the development of modern agriculture services, especially in logistics industry of agricultural product processing and leisure agriculture, Internet+ agriculture, and agricultural insurance.

Internet industry

The province enhances the development of application service industries, including electronic commerce, game animation and service outsourcing. Meanwhile, Hainan strengthens the integration between Internet and other industries including tourism, agriculture, medical care, education, logistics, real estate, and finance.

Medical care and health industry

The province focuses on promoting the development of medical licensing in Chinese medicine, health care, health insurance and internet health care services.

Finance and insurance industry

The province encourages domestic and foreign financial institutions to set up branches in Hainan, expands market players, increases credit funds, constructs multi-level financial markets, makes good use of the insurance dividend policy, strengthens inclusive finance, and promotes local financial innovation and other measures to enhance the development of the financial services industry in Hainan.

Exhibition industry

The province further improves facilities and services, actively introduces international conferences, associations and company annual meetings, cultivates a group of exhibitions with the characteristics of internationalization, specialization and branding in tourism shopping, marine tourism, health care, the Internet industry, efficient agriculture, aerospace and other fields.

Modern logistics industry

The province focuses on strengthening the province's integrated transport system, logistics infrastructure and logistics service facilities, studies the establishment of trading centers for energy, rubber, jewelry and other commodities, developing bonded logistics, cross-border electronic commerce, and promoting the logistics mode of innovation and logistics resource integration.

Oil and gas industry

Hainan strengthens efforts in the development of the raw materials industry, including oil, aromatic hydrocarbons, urea, and methanol,, as well as the fine chemical industry, new materials industry, high-end chemical product industry and energy trading industry.

Pharmaceutical industry

Relying on "Haikou Medical Valley", Hainan focuses on the development of medical industries in bio medicine, Chinese medicine, and medical equipment.

Low carbon manufacturing

Hainan spares no effort in the development of the automobile manufacturing industry, green food processing industry, new energy and new materials industry.

Estate industry

Hainan focuses on the development of shantytowns to improve residential real estate in the island, operating tourism real estate, and commercial real estate. Hainan has established a stable and healthy real estate product supply system and housing security system, and enhances the development of quality and features, which are considered as priorities.

High technology, education, culture and sports industry

Hainan cultivates biological medicine, membrane materials, special glass and special natural rubber materials, photovoltaic silicon solar cells and components and breeding, and pursues international cooperation in education. It also cultivates a characteristic entertainment industry, cultural tourism industry, cultural festival exhibition industry, film and television production industry, new media and creative industries, sports leisure industry and international cultural trade industry.

Advantages

First, it has unique regional advantages. Located in the conjoining area of Asia and the Pacific Ocean, Hainan Island is located midway between Japan andSingapore. It is an important maritime transportation route connecting two major water systems: the Pacific Ocean and the Indian Ocean.

Second, it has an open free trade zone policy Hainan is intended to be a free trade zone under a major national strategic policy, and will gradually explore and steadily promote free trade port construction with Chinese characteristics, all planned, deployed and encouraged by the central government. The China (Hainan) Pilot Free Trade Zone will operate across the entire island, with its strategic positioning as a "pilot area with comprehensively deepened reform and opening-up ", a "national experimental area for ecological civilization", an "international tourism consumption center" and a "national major strategic service area".

Third, it has innovative development planning. Hainan was the first pilot province approved by the central government to carry out the reform of replacing multiple plans for provincial development with one master plan. In accordance with requirements of pilot reforms proposed by the central government, Hainan insists on unified planning and becoming both a big and scenic city. It wants to break the barriers of department and division segmentation, optimize space layout and resource allocation, and coordinate the six types of space planning, namely essential functions, ecological wealth, urban systems, land use, forest land protection and use, and marine functions.

Fourth, it has high-level infrastructure. A convenient "traffic network" including the sea, land and air has been constructed in Hainan. The island has the world's first roundabout high-speed railway, running through 12 cities and counties in the east and west. Total road length of the province is 20,860 km; the network density is 79.23 km/100 square km. Haikou Meilan International Airport and Sanya Phoenix International Airport have a combined throughput of 40 million person-times. Boao International Airport has been completed and put into operation. The system of "four directions, five ports", with Haikou port and Yangpu port as the two cores, has been improved on a daily basis.

Fifth, it has multicultural talent pool. Hainan is the youngest province in China. It grew from the grand occasion of "100,000 talents crossing the strait" in its early days, and is growing now from the magnificent feat of "1,000,000 talents entering Hainan action plan". At present, Hainan has nearly 1.3 million talents, of whom nearly 50,000 are high-level. With its unique ecological environment, Hainan attracts more than 100,000 "migratory bird" talents every year, over 30 percent at the top of their professions.

Sixth, it has efficient review. Hainan will energetically simplify administrative licensing items, focus on improving examination and approval services, eliminate more than 1,200 items subject to delegated authority to lower-level governments and adjust their examination and approval procedures, and eliminate the application materials for 875 provincial-level administrative licensing items.

Policies to encourage overseas businesses to invest in Hainan Free Trade Pilot Zone

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.

New permissions

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.

Support policies

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.

For more information, please contact 0898-65226346 or hn_hn_wzc@126.com

One-stop services for foreign investing in Hainan China, offer business setup consulting, company registration, accounting services in Hainan

Hainan Province is called “Qiong” for short and acclaimed as “Hot Island” and “Coconut Island”, located at the South Sea, China.

Hainan Province is the solely tropical island province of China, administrating Hainan main island, the islets and reefs of Xisha, Nansha, Zhongsha and their surrounding waters. Hainan Province lies in the central part of Asian Pacific Economic Circle, facing Leizhou Peninsula of Guangdong over the Qiongzhou Strait. The west of the island borders the Gulf of Tongkin, with Vietnam visible in the distance. The east of the island is near to Hong Kong and Taiwan, and the Philippines is in southeast. The South Sea in south of the island adjoins to Malaysia, Indonesia, Brunei and Singapore. Haikou City, the capital of Hainan Province, is away from Hong Kong for 50 minutes by air and 2-3 hours from above foreign countries and regions.

The province is cultivating 12 pillar industries: tourism, tropical agriculture, the internet, medicine, healthcare, financial service, exhibition, modern logistics, oil and gas, low-carbon manufacturing, education and real estate.

Company setup in Hainan free trade zone attracts so much attention in these days. As one of China's foremost tourist destinations, and with its year-long warmth, sunshine and beautiful tropical beaches, Hainan is an excellent investment destination for entrepreneurs and businesses. The Chinese central government decreed in April 2018 that HaiNan will open a pioneering free trade zone by 2020, and a similar free trade port by 2025. It is estimated that economic growth will be more rapid than that of the Mainland in the next 5 to 10 years.

Why Set up a Company in Hainan free trade zone?

Free trade zones are often a good first port of call for foreign investors who are in the process of starting their Chinese company. They offer many benefits, most commonly, ,tax breaks, faster business setup and administration timescales, industry-specific benefits (such as subsidies and investment opportunities).

There is to be a particular focus on medicine and health-care in Hainan. Mainland China has very strict regulations in place for the medical industry. Hainan is already a hot spot of Chinese and foreign medical tourism, and they're planning to grow further, no doubt spurred on by the relaxed medical industry regulations there.

Moreover, The government is also looking into allowing legal gambling in Hainan, namely sports lottery and horse racing. While your company may not be involved with gambling, an influx of tourists and money may well impact your business positively.

Hainan company registration is also referred to as Hainan corporate formation, Hainan business setup, Hainan company incorporation. Hainan is the smallest and southernmost province of the People's Republic of China, consisting of various islands in the South China Sea. Being China’s largest Special Economic Zone, nominal GDP of Hainan province has been increasing steadily. In simple words, Hainan provides many opportunities for foreign businesses.

To facilitate people who want to invest and set up business in Hainan, here is an introduction of Types of business presence in China:

Before starting up a business in China, you have to know what are the options. Foreign Investors generally establish a business presence in China in one of five modes: Wholly Foreign Owned Enterprise (WFOE); Representative Office; Foreign Invested Partnership Enterprises (FIPE); Joint Venture and Hong Kong Holding Company.

WhollyForeign Owned Enterprise (WFOE) is a Limited liability company wholly owned by the foreign investor. WFOE requires no registered capital and it's liability of equity , can generate income, pay tax in China and it's profit could be repatriate back to investor's home country. Any enterprise in China which is 100 percent owned by a foreign company or companies can be called as WFOE.

RepresentativeOffice (RO) is a Liaison Office of it's parent company. It requires no registered capital. It's activities would be: product or service promotion, market research of it's parent company's business, Quality Control liaison office etc in China. RO generally is prohibited to generate any revenue nor generating contracts with local businesses in China.

JointVenture (JV) is a Limited liability company formed between Chinese investor andForeign investor. The parties agree to create a entity by both contributing equity, and they then share in the revenues, expenses, and control of the enterprise. JV usually been used by foreign investor to engage the so called restricted in areas such like: Education, Mining, Hospital etc.

SinceMarch 1, 2010: Measures of Establishment of Foreign Invested PartnershipEnterprises (FIPE) in China is taking effect. The regulation, which take effect since March 1, 2010, are known as the Administrative Measures for the Establishment of Partnership Enterprise in China by Foreign Enterprises or Individuals. There's no required minimum registered capital for a Foreign Invested Partnership Enterprise (FIPE) in Shanghai, Beijing, Guangzhou,Hainan, Hangzhou and rest cities of China

HongKong Company usually been used as a Special Purpose vehicle (SPV) to investMainland China. Hong Kong is one of the quickest locations to Incorporate a business. Although a HK company is not a legal entity in Mainland China (MainlandChina and Hong Kong, See Wiki 1 country, 2 systems), lots foreign investors, especially investors from Europe and North America still chose to setting up a Hong Kong company as SPV to invest China.

After China's entry to WTO, most industries in China welcome foreign investment, WFOEsetting up in China becomes the first option of foreign investment's entitystructures instead of Rep. Office setting up in China. At the mean time, for tax purpose, effective licensing system etc more and more investors use Hong Kong as the holding company to invest China mainland, using this offshore company to hold their operations in China.

Business set-up in Hainan is a big project by itself, which requires financial and time commitments, business management knowledge and China expertise. Identifying a competent agent to manage the complex process will be a cost and time effective way to avoid potential pitfalls . Tommy China Business Consulting has direct connections in the local government

Since 2006, TCBC has been focusing on consulting services for our clients to invest in Haikou, Sanya Hainan China. We are specialized in establishment of wholly foreign owned enterprises (WFOEs), setting up of offshore companies, trading services, tax minimization, Assist in obtaining government approvals and certificates for running business, negotiate and draft various legal documents provide legal advice, negotiate government officer for Land acquisition. Advising on formation of WOFE and business structures, managing and controlling WOFE in Hainan China, drafting privacy policies and structuring commercial transactions

TCBC will manage all aspects of incorporation to get you a business license in Hainan China. We offer a range of company formation services including helping you to set up:

-Wholly Foreign Owned Enterprises (WFOE )

-RepresentativeOffices

-Joint Ventures (Equity/Co-operative)

-Foreign Invested Partnership Enterprises (FIPE)

-HongKong Holding Company.

Once your business is officially registered in Hainan, it's required to maintain proper accounting records in accordance with accounting standards in China and to report taxes on both monthly (for business tax, individual income tax) and quarterly (corporate income tax) basis. Late submissions will face penalties and surcharges.

When foreign companies come to Hainan to set up Small Medium Enterprises, one of the headaches is to find an English-speaking professional accounting & tax advisory and agency firm. Even there is help from local professionals, due to language and communication problems, it is still hard for investors to find the correct way of investment and to completely understand the local investment and tax policy. Furthermore, it is hard for the foreign investors to set up a complete and legal financial & tax system as well as the related procedures. Therefore, different kinds of incompliant problems regarding tax and legal areas will be accumulated with the invested company and lead to serious legal risks step by step.

A lucky investor may get the fluent English-speaking internal accountant by recruitment, but it does not mean the invested company no longer needs an external consultant. Due to the professional limitation of internal accountant, particularly when it comes to comprehensive issues regarding taxation, customs, foreign exchange, labor, banks and so on, it is hard for the internal accountant to propose sophisticated professional advice and options to the company’s management.

During the practical operating, many small and medium sized companies conclude that full time cashier and full time accountant cost a lot and create certain burden for operation. Meanwhile, as they might not be full occupied by works due to the limited work load. To be successful, any enterprise regardless its size often needs a financial and accounting expertise.Outsource your accounting project to us is the best solution to this problem.  With Our professional accounting service, clients can have the expertise they require when they require.

Our accountant could assist you and negotiating with your local officer to use the proper tax reporting method for your China presence. And submit the tax reports monthly and quarterly on your behalf.
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The details of our services are set out below
◾Update the books in accordance with the Chinese Accounting Standards
◾Prepare monthly financial statements for tax filing purpose and submit if applicable
◾File monthly Business Tax Return and Individual Income Tax Return
◾File Corporate Income Tax Return quarterly
◾Annual Corporate Income Tax Filing
◾Monthly Bookkeeping Service
◾Audit of Financial Statements

Contact Tom Lee for business setup consulting in Hainan

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