Glossary

Hainan Free Trade Port (FTP): A special economic zone covering Hainan Island, China, established with preferential trade, tax, and investment policies designed to attract foreign capital and talent.
Zero-Tariff Policy: A framework under which qualifying goods and entities within the Hainan Free Trade Port are exempt from certain import tariffs, subject to eligibility conditions that are reviewed and can change over time.
Economic Substance: The principle that an entity's activity on the ground — physical presence, local decision-making, and a workforce proportionate to its stated activities — should match the tax or regulatory position it claims.
WFOE (Wholly Foreign-Owned Enterprise): A limited liability company in mainland China owned entirely by foreign investors, one of the most common entity structures for foreign businesses operating in the country.
EOR (Employer of Record): An arrangement in which a third party formally employs staff on a client's behalf — handling payroll, statutory contributions, and local labour compliance — while the client directs the employee's day-to-day work.
IIT (Individual Income Tax): China's personal income tax, withheld and remitted by employers on behalf of employees as part of standard payroll processing.
First-to-File (Trademarks): A trademark registration principle under which rights generally belong to whoever registers a mark first, regardless of who used it first — the system that governs trademark registration in China. Note that earlier use does not by itself create protectable rights in mainland China, unlike in many common-law jurisdictions.
AML / KYC (Anti-Money Laundering / Know Your Client): Regulatory and internal procedures used to verify a client's identity and the source of funds involved in an engagement, as part of standard financial and corporate compliance practice.
Compliance Calendar: A documented schedule of an entity's recurring regulatory obligations — filings, renewals, and reporting deadlines — tracked to keep an entity in good standing over time.
Legal Representative (法定代表人): The single individual named on a Chinese entity's registration as able to act for and bind it. The role has no close equivalent in most home jurisdictions: the named person's own name attaches to the entity's conduct, so who holds it is a decision about personal exposure rather than a formality.
Beneficial Owner (UBO): The natural person who ultimately owns or controls an entity, traced through its ownership and control chain rather than read off its immediate shareholder. Control can arise from arrangements other than shareholding, which is why the answer is often not visible on the entity's own registration documents.
Deregistration (注销): The formal process of closing a Chinese entity, as distinct from simply ceasing to trade. It runs through creditor notice, tax clearance, and the surrender of the entity's licences and registrations; until it completes, the registration remains open and its obligations continue to fall due.
Related-Party Transaction: A transaction between an entity and a party connected to it by ownership or control — an affiliate, a parent, or a commonly controlled company. Such transactions are identified and reported separately from third-party dealings, and the pricing applied to them is expected to be explicable on its own terms.
Transfer Pricing: The pricing of transactions between related parties, and the documentation supporting it. The question it answers is whether the terms between connected companies reflect what unconnected parties would have agreed — a question best answered by documentation created alongside the transactions rather than reconstructed afterwards.
Corporate Secretarial: The administrative function that keeps a company's statutory records, registers, resolutions, and filings current — the industry term for the routine work that maintains an entity's good standing between major events, whether performed in-house or outsourced.

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Our practice areas cover the whole life of a foreign-owned presence in Hainan — from the feasibility assessment made before anything is filed, through formation and licensing, payroll, tax and ongoing compliance, to the deregistration that closes an entity properly — alongside the Free Trade Port incentives that are the reason to be here rather than anywhere else in China. One engagement model means a single accountable team across all of them.

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The Free Trade Port rewards preparation and penalises gaps in compliance. Our role is to shorten that learning curve: one engagement, one accountable team, and a documented path from first assessment to ongoing compliance.