Hainan Free Trade Port is China’s largest free trade zone by area and one of the key gateways for foreign products entering the Chinese market under more favorable conditions. Instead of shipping goods directly to mainland China under standard tariffs and procedures, you can move part of your process to Hainan and take advantage of the special rules that apply to the entire island.
What Hainan FTP offers in practice
- Zero tariffs for many products – the share of tariff lines eligible for duty-free entry into Hainan has been significantly expanded.
- Lower corporate income tax – for encouraged industries, the corporate tax rate is 15%, lower than the standard rate in most parts of China.
- The 30% value‑added rule – goods imported into Hainan duty‑free and then processed on the island with at least 30% added value can be sold in mainland China without paying customs duties.
In other words, the part of your business you currently run at home – such as packaging, finishing or final product preparation – can be relocated to Hainan and used as a springboard to reach Chinese customers on much better terms.
How we help you make this work
Our office in Sanya exists for one reason: to turn these rules into a workable setup for your business, not just a theoretical possibility on paper.
1. Assessing your product and goals
We start by looking at what you sell, your price segment, target customers and whether Hainan FTP is a realistic model for your product at all. If it is not worth it, we will say so openly.
2. Checking how FTP applies to your case
Based on current regulations and product lists, we assess:
- whether your product can enter Hainan duty‑free,
- which part of the value chain makes sense to move to the island (packaging, finishing, branding, testing, light processing),
- whether the 30% value‑added threshold is realistically achievable if your goal is duty‑free sales across mainland China.
3. Finding local partners and a workable model
We help you find reliable local partners in Hainan for packaging, warehousing, logistics or light processing. The goal is a model that is simple enough to manage, yet fully aligned with FTP rules so that you actually benefit from the incentives.
4. Operational support and logistics
Together with your team, we coordinate:
- importing your goods into Hainan,
- operations on the island (packaging, processing, storage),
- movement of goods to mainland China and distribution to your buyers or partners.
Two practical scenarios
To make it more tangible, here is how an FTP model can work in practice.
Food or confectionery brand
Your product enters Hainan duty‑free, where packaging, labelling and branding for the Chinese market are carried out. Once the required value‑added threshold is reached, the product can be distributed across mainland China without customs duties.
Manufacturer of equipment or components
Parts or semi‑finished products are imported into Hainan under preferential conditions. Final assembly, testing or configuration is done on the island, and the finished product is then sold to customers in the rest of China, taking advantage of the FTP framework.
Of course, the numbers and feasibility always depend on your product, margins and target segment. That is why the first step is always analysis – not moving everything to Hainan overnight.
First step – is Hainan FTP a realistic option for you?
If you are considering entering the Chinese market but do not want to navigate a complex system of rules, tariffs and taxes on your own, Hainan FTP can be a very strong starting point.
Send us a brief outline of:
- what you sell,
- the approximate value per shipment,
- whether you are targeting B2B or B2C customers in China.
It is also important to understand that Hainan FTP is not the only way to improve your cost structure. China has free trade agreements with a number of countries, which means some products can already enter the Chinese market with reduced or zero tariffs even without using Hainan. Our job is to compare these options – bilateral agreements versus the Hainan Free Trade Port model – and recommend the structure that makes the most sense for your specific case.
We will come back to you with an honest assessment of whether Hainan Free Trade Port is a viable option for your business and what your model could look like in practice.
If you would like more background information about the Hainan Free Trade Port project, you can read our detailed article on the blog: Hainan Free Trade Port – background and key policies.
Frequently asked questions about Hainan Free Trade Port
Is Hainan FTP only for large corporations?
No. Smaller brands can also benefit from the Hainan Free Trade Port, provided there is enough volume and margin to justify setting up operations on the island. This is why we always start with a financial and operational feasibility check for your specific case.
Do I need to set up my own company in Hainan?
Not necessarily. In some models it makes sense to have your own entity in Hainan, but in many situations you can work through existing local partners and our company without opening a separate legal entity.
What exactly does the 30% value‑added requirement mean?
It means that the value created in Hainan – for example through packaging, finishing, processing or assembly – must account for at least 30% of the product’s total value for the finished product to enter mainland China without customs duties.