Core Viewpoint - The Hainan Free Trade Port is entering a new phase with the upcoming full island closure operation, set to officially start on December 18, 2025, which will significantly expand the scope of "zero tariff" imports and provide new opportunities for enterprise innovation and growth [3][4]. Summary by Sections Zero Tariff Expansion - The Hainan Free Trade Port has established a policy system centered on "zero tariffs" and "low tax rates." As of May 2025, the cumulative value of "zero tariff" imports reached 22.69 billion, with tax reductions amounting to 4.32 billion [5]. - After the full closure, the "zero tariff" policy will shift from a positive list to a negative list management approach, allowing 6,637 items (approximately 74% of all taxable goods) to be imported at zero tariffs, a 53% increase compared to before the closure [5][6]. - Three types of entities can apply for the "zero tariff" benefits: enterprises, public institutions, and private non-enterprise units in technology and education [5]. Processing Value-Added Tax Exemption - The processing value-added exemption policy allows goods processed from "zero tariff" imports to enter the mainland without import duties if the value added is 30% or more. This policy has been relaxed, removing the previous requirement that 60% of a company's revenue must come from encouraged industries [6][7]. - As of July 2025, the cumulative value of processed goods for domestic sales reached 10.46 billion, with an exemption of approximately 810 million in duties [7]. Low Tax Rate Policy Optimization - The Hainan Free Trade Port offers a dual 15% corporate income tax incentive for qualifying enterprises, with high-end and scarce talents enjoying personal income tax exemptions on amounts exceeding 15% [8][9]. - By the end of 2024, nearly 4,300 enterprises and over 39,000 individuals benefited from the dual 15% income tax policy [9]. Overall Impact of Tax Policies - The comprehensive tax policy system of "zero tariffs, low tax rates, simplified tax systems, strong legal frameworks, and phased implementation" is expected to significantly boost various industries, including pharmaceuticals and high-end food processing [10]. - The Hainan Free Trade Port aims to enhance its role as a global trade hub, optimizing both import/export tax costs and trade facilitation levels, thereby attracting resources and elements to the region [11].

Core Points - Hainan Free Trade Port is entering a new phase with the full island closure operation set to start on December 18, 2025, which will significantly expand the scope of "zero tariff" imports [1][2] - The "zero tariff" policy will shift from a positive list to a negative list management system, allowing 6,637 items to be imported at zero tariff, covering approximately 74% of all goods [2][3] - The processing value-added tax exemption policy has been adjusted to attract more manufacturing industries, removing the previous requirement that 60% of a company's revenue must come from encouraged industries [3][4] Tax Policy Features - The tax system of Hainan Free Trade Port includes a dual 15% corporate income tax incentive for encouraged industries, benefiting nearly 4,300 enterprises and over 39,000 individuals by the end of 2024 [6][7] - High-end and scarce talents working in Hainan can enjoy personal income tax exemptions on income exceeding 15%, with optimized residency calculations [6][8] - The tax policies aim to significantly boost industries such as pharmaceuticals, high-end food processing, and seed industries, enhancing the overall trade environment [7][8] Economic Impact - The "zero tariff" and low tax rate policies are expected to enhance Hainan's position as a global trade hub, facilitating resource and factor aggregation [8] - The cumulative value of processing value-added goods reached 10.46 billion yuan, with tax exemptions amounting to 810 million yuan, indicating strong economic activity [4][7] - The policies are designed to support the development of a modern biopharmaceutical industry, allowing for significant cost savings in production and research phases [7][8]