Hainan Financial Lease Project

1. Positioning

Give full play to the function of financial leasing in the modern financing service system, improve resource utilization, and accelerate Hainan’s economic development. Taking advantage of policies such as the low tax rate of the free trade port, the "zero tariff" of transportation vehicles, and the liberalization of navigation rights, the focus is on the development of aircraft, ships, cruise yachts, marine equipment, nuclear power units and other leasing businesses.

2. Investment Objectives

★Support all kinds of enterprises in Hainan Province to establish financial leasing branches with famous financial leasing companies through cooperation, mergers and acquisitions, capital increase and share expansion;

★Support the establishment of financial leasing companies specifically serve small, medium and micro enterprises;

★Encourage the development of Financial leasing services for individual innovation and entrepreneurship;

★Welcome both domestic and foreign investors to set up financial leasing companies in Hainan;

★Support financial leasing companies to set up subsidiaries in Hainan without setting minimum registered capital restrictions.

3. Analysis of Strengths

(1) Preferential Policies

Firstly, the Hainan Free Trade Port implements a tax system featuring zero tariff, low tax rate, and simplified tax system. The corporate income tax of the financial leasing industry and the personal income tax of high-end talents are reduced by 15%. Zero-tariff positive list management will apply to cruise ships and other vehicles imported to island for transportation and tourism, these vehicles are exempt from import tariffs, import value-added tax and consumption tax, which will greatly reduce the tax cost of financial leasing companies.

Secondly, there are no policy obstacles to the customs supervision of the financial leasing industry in different places. Hainan Province will formulate implementation rules to accelerate the implementation of the policy.

Thirdly, the free trade port will implement an open and convenient foreign exchange management system to reduce the foreign exchange costs of financial leasing companies and provide protection for companies to dispose of assets on a global scale.

Fourthly is to allow a one-off tax deduction for the enterprise’s eligible capital expenditures in the current period, or accelerate depreciation and amortization.

Fifthly, it is exempted from corporate income tax on income from newly-added overseas direct investment by enterprises in tourism, modern service and high-tech industries established in Hainan Free Trade Port before 2025.

(2) Targeted policies in segmented areas.

Aiming at the aircraft financial leasing industry, Hainan will further relax airspace control and airway rights restrictions, optimize shipping routes, and encourage increased capacity allocation. The National Civil Aviation Administration has issued the " Pilot Opening of the Seventh Air Traffic Rights Implementation Plan in Hainan Free Trade Port" and will further support Hainan to expand the opening of other navigation rights. Provide more high-quality and efficient financial services for aircraft financial leasing, explore ways to replace security deposits with insurance, and remove restrictions on aircraft overseas financing. Provide support to the main base airline in Hainan to open up international routes, and allow Hainan's flights to and from the island to be filled with bonded jet fuel. For the ship financing leasing industry, Hainan will provide it with more high-quality and efficient financial services, replace the deposit with insurance, and remove restrictions on offshore financing of ships. Hainan will also implement a more open ship transportation policy, support Yangpu to build a new hub port for land-sea trade in the west, and establish the Hainan Free Trade Port International Ship Registration Center with "China Yangpu Port" as the registration port, and establish a convenient and efficient In the ship registration procedure, the restriction on the foreign shareholding ratio of the ship registration entity is cancelled. Ships manufactured in China that are registered in the "China Yangpu Port" and engaged in international transportation shall be deemed to be exported and an export tax refund shall be granted. Domestic ships that use Yangpu Port as a transit port for the same domestic and foreign trade transportation are allowed to refill the bonded oil required for this voyage. For container goods that meet the conditions and transit and leave the country via Yangpu Port, the port of departure tax refund policy will be implemented. For other types of financial leasing businesses, such as large-scale medical equipment, offshore equipment, etc., more preferential policies will be introduced. Compared with other provinces in China, Hainan will have incomparable policy advantages.

(3) Unique Geographical Advantage

Hainan is the center of the international logistics landscape and an important node on the Maritime Silk Road. It has two broad markets, domestic and the countries along the “Belt and Road”. The cluster of international resources provide a huge market space for the development of the financial leasing industry.

4. Project planning and supporting facilities

(1) Haikou Comprehensive Bonded Zone

Haikou Comprehensive Bonded Zone is a special customs supervision area approved by the State Council and has functions of port, logistics, and processing. It is the only comprehensive bonded zone in Hainan and one of the two special customs supervision areas. It is currently the highest level of openness and the highest degree of outward economic concentration park in Hainan. The total area of the park is 1.93 square kilometers, and the planned construction land area is 1.93 square kilometers.The currently sold land area is 0.94 square kilometers (48.7% of the total area) and the un-transferred land area is 0.99 square kilometers.

Supporting facilities:

★Location and transportation: Haikou Comprehensive Bonded Zone is adjacent to Macun Port,the national first-class port,and it is 30 kilometers away from Xiuying Port, 5 kilometers away from the Hainan Roundabout Expressway, and within 15 kilometers there are 3 high-speed rail stations in Haikou, Laocheng and Fushan. It has convenient transportation and location advantage.The infrastructure such as roads, water and electricity in the park is complete, and the "five connections and one leveling" are realized.

★Business: An international business center is built in the park to provide enterprises with office, conference, and financial services.

★Living facilities: There are staff canteens and living facilities in the park, which can provide dormitories for employees of enterprises in the park.

(2) Yangpu Bonded Port Area

Yangpu Bonded Port Area is the fourth bonded port area established in China after Shanghai Yangshan Bonded Port Area, Tianjin Dongjiang Bonded Port Area and Dalian Dayaowan Bonded Port Area. It is also the first bonded port area established in South China. Yangpu is adjacent to the ASEAN trade zone and close to the main international routes. It has a deep water coastline of more than 50 kilometers and can build 80 berths of 10,000 to 300,000 tons. It is the closest industrial base to the oil and gas resources in the South China Sea. The port area will give full play to its regional, resource and policy advantages, facing Southeast Asia, and build the most open shipping center in the Beibu Gulf; build a logistics center with bonded warehousing and transit transactions for oil, natural gas, chemical raw materials, pulp, and paper products. And develop into an important chemical product processing and export base in the country.

Supporting facilities

The development zone has complete living facilities. Industrial and Commercial Bank, Construction Bank, Bank of China and other banks have branches, with a complete basic education system from kindergarten, elementary school, junior high school to high school,hospitals, theaters, stadiums, hotels, restaurants,etc. Complete service facilities.Public docks,water, electricity,gas, communications and other facilities are complete and the supply is stable.It has built a modern standard factory building of approximately 36,600 square meters and a modern standard public warehouse of approximately 20,000 square meters. There are standard inspection platforms, customs supervision warehouses and quarantine processing areas. Currently, public supporting facilities such as public pipe gallery, smart patrol integration, central heating, cogeneration, and hazardous waste treatment center are being improved.

Contact

Haikou Integrated Free Trade Zone, Tel: 0898-67204908

Yangpu Economic Development Zone, Tel: 0898-28826502