Hainan business overview
Hainan is not one market. This is what each part of the island is for, and which incentives reach it.
Most foreign businesses arrive at the Hainan Free Trade Port knowing the headline policy and nothing about the island itself. That is a difficult position to invest from: the incentives are island-wide, but the industry, infrastructure and designated zones that determine whether you can use them are not.
This page is the orientation we would give a client at a first meeting. It covers how Hainan is administratively organised, what the island-wide customs and tax regime actually does, and — through the map below — what each of the island's cities and counties is being built for.
We publish no population, GDP or investment figures for individual cities and counties. Consistently-dated, verifiable statistics are not available for all of Hainan's county-level divisions in any source we are willing to cite, and an unreliable figure on a page like this is worse than none. What follows is qualitative, sourced, and stated only where we can stand behind it.
How Hainan is organised
Hainan is a province, and — unusually for China — almost every one of its county-level divisions reports directly to the provincial government rather than through an intermediate prefecture. In practice this means a shorter chain between an investor and the authority that decides their filing than in most Chinese provinces.
The tier a place occupies is not a matter of size or prestige. It determines which government registers your company, which bureau administers your incentives, and whose approval a land or construction application needs. A foreign investor told that "Danzhou is a city and Chengmai is a county" has been told something that matters, and is rarely told why.
| Tier | 中文 | Count | Divisions |
|---|---|---|---|
| Prefecture-level city | 地级市 | 4 | Haikou, Sanya, Sansha, Danzhou |
| District | 市辖区 | 8 | Haikou: Xiuying, Longhua, Qiongshan, Meilan · Sanya: Haitang, Jiyang, Tianya, Yazhou |
| County-level city | 县级市 | 5 | Wuzhishan, Qionghai, Wenchang, Wanning, Dongfang |
| County | 县 | 4 | Ding'an, Tunchang, Chengmai, Lingao |
| Autonomous county | 自治县 | 6 | Baisha, Changjiang, Ledong, Lingshui, Baoting, Qiongzhong |
About Sansha, and about this map
- Sansha (三沙市) is Hainan's fourth prefecture-level city and administers islands and waters in the South China Sea through two districts, Xisha and Nansha. Its land area is negligible, its resident population is in the low thousands, and it has no commercial investment programme. It is named here for completeness and is not shown on the map, whose scale is set by Hainan Island.
- Yangpu Economic Development Zone (洋浦经济开发区) is the opposite case: not an administrative division at all, but a province-administered economic functional zone inside Danzhou's territory. It has no division code and appears on no boundary map — and it is, for trade, shipping, energy and bulk-commodity investors, the most important place on the island. It is shown on our map as a marked point and has its own profile.
- Danzhou has no districts. It was upgraded from county-level city to prefecture-level city in 2015 without being subdivided, so it is a 不设区的地级市 — a prefecture-level city with no district tier beneath it.
Island-wide independent customs operation
On 18 December 2025 the whole of Hainan Island became a special customs supervision area — the step Chinese policy documents call 全岛封关运作, usually rendered in English as "island-wide independent customs operation" or "island-wide closure". It is the change that turns the Free Trade Port from a package of incentives into a distinct customs territory.
The design is described as "first-line liberalisation, second-line control" (一线放开、二线管住). The "first line" is the border between Hainan and the rest of the world: goods crossing it into Hainan largely enter free of import duty, import VAT and consumption tax. The "second line" is the boundary between Hainan and the Chinese mainland: goods crossing that are treated as imports and taxed accordingly — unless they have been substantially transformed on the island, or are simply circulating within it.
The practical consequence for a foreign business is that Hainan is now a place where you can hold, process and trade goods under near-free-port conditions while still standing inside China's border. That is a different proposition from a bonded warehouse, and it is why the substance requirements below matter so much: the regime is generous, and it is policed.
The zero-tariff regime
The headline effect of closure is the widening of duty-free treatment on goods imported into Hainan. The share of imported goods entering free of tariff rose from roughly 21% of tariff lines to roughly 74%, expanding coverage from around 1,900 product categories to around 6,600.
This is a change of kind, not only of degree. Under the earlier catalogues, zero-tariff treatment was something you checked your product against and usually failed. At three-quarters of tariff lines it becomes the default assumption for most physical goods, and the question flips to whether your particular line is one of the exceptions.
The second line still applies. Goods that leave Hainan for the mainland are taxed as imports unless they qualify through processing on the island — which is precisely the incentive the regime is built around, and the reason manufacturing and processing operations are being courted rather than pure warehousing.
- Share of tariff lines duty-free
- ≈21% → ≈74%
- Product categories covered
- ≈1,900 → ≈6,600
- In force from
- 18 December 2025
The dual 15% tax position
Two preferential rates define Hainan's tax proposition, and both are commonly described more loosely than they should be.
Corporate income tax is reduced to 15% for enterprises registered in the Free Trade Port that are in an encouraged industry and carry on substantive operations there. "Encouraged industry" means the published catalogue, and the test applied is that at least 60% of main business income comes from a catalogued activity. "Substantive operation" means real management, staff, accounts and assets in Hainan — not a registered address.
Individual income tax is capped at 15% for qualifying high-end and in-demand talent, against a mainland top rate of 45%. Residence in Hainan for at least 90 days in the tax year is part of the test, and recognition as qualifying talent is a separate determination rather than something an employer can simply assert.
Both rates have been legislated with end dates and extended before; the current settings run to 31 December 2027. Anyone modelling a Hainan structure over a longer horizon should treat the post-2027 position as a policy assumption, not a given.
- Corporate income tax
- 15% — encouraged industry + substantive operation
- Encouraged-industry income test
- ≥60% of main business income
- Individual income tax
- Capped at 15% for qualifying talent (≥90 days' residence)
- Current expiry
- 31 December 2027
The key zones, and why they decide where you register
Hainan concentrates its industrial policy into a set of designated key zones (重点园区), launched as eleven in June 2020 and since reorganised — the province currently reports on thirteen. Between them they cover tourism, modern services and high technology, and they are where the province's investment promotion, land, and administrative delegation are actually directed.
This is the single most consequential thing a newcomer misunderstands about Hainan. The Free Trade Port's headline incentives are island-wide, but a zone brings its own delegated approvals, its own industry-specific supporting policy, and its own concentration of counterparties and infrastructure. Registering in the right zone can be the difference between an incentive you qualify for on paper and one you can actually operate under.
The zones are not evenly distributed. Yangpu carries the trade, shipping and petrochemical cluster; Sanya's Yazhou Bay carries seed breeding and deep-sea technology; Qionghai's Boao Lecheng carries medical; Wenchang carries aerospace. Each region profile on this site names the zones physically located in it.
Five economic geographies, not one island
Hainan plans itself as a set of economic circles rather than a single market, and the map on this page is coloured to match. Understanding which circle a place sits in explains most of what it is being asked to become.
The Haikou circle is the administrative and services core; Greater Sanya is tourism, seed science and deep-sea research; Danzhou–Yangpu is the industrial and port west; the eastern coastal belt carries medical and resort development; and the central highlands are a protected conservation area where heavy industry is not merely absent but excluded by policy.
That last point is worth stating plainly, because the temptation on a page like this is to write an industrial pitch for all eighteen divisions. Four of them do not have one, and saying so is more useful than inventing one.
- Haikou circle
- Haikou, Chengmai, Wenchang, Ding'an
- Greater Sanya
- Sanya, Lingshui, Baoting, Ledong
- Danzhou–Yangpu
- Danzhou, Yangpu, Lingao, Changjiang, Dongfang
- Eastern coastal belt
- Qionghai, Wanning
- Central conservation area
- Wuzhishan, Baisha, Qiongzhong, Tunchang
The island, division by division
Select a division on the map, or from the list beneath it, to see what it is for. Haikou and Sanya can be opened further to show their districts.
Select a division to see its profile.
All divisions
Danzhou–Yangpu economic circle
Greater Sanya economic circle
Central ecological conservation area
Last reviewed September 2026. This page is general information about the Hainan Free Trade Port, not legal, tax or investment advice. Eligibility for every incentive described here turns on facts specific to your entity, your industry classification and your substance in Hainan. Nothing on this page should be relied on without advice on your own position.