The launch of island-wide customs closure in Hainan Free Trade Port (FTP) on December 18, 2025, marks a transformative leap in China’s opening-up. For global businesses eyeing the Chinese market, Hainan has shifted from a tropical paradise to a powerhouse of preferential trade policies. At the heart of this transformation is the groundbreaking Zero-Tariff policy, offering unprecedented access to the vast Chinese market with significant cost advantages.
But who exactly qualifies? What can you import duty-free? And how do you navigate the compliance landscape? This guide breaks down the essentials of Hainan’s Zero-Tariff regime, providing a clear roadmap for overseas enterprises looking to establish or expand their footprint.
Understanding the “Zero-Tariff” Core: It’s All About the List
First, let’s clarify what “Zero-Tariff” means in Hainan’s context. It does not mean everything enters tax-free. The policy operates on a Negative List management system.
- The “Negative List”: Officially termed the Hainan Free Trade Port Import Taxable Commodity Catalog (财关税〔2025〕13号), this list specifies which goods are subject to import duties (tariff, VAT, and Consumption Tax). Think of it as the exception list.
- The “Zero-Tariff” Scope: Any imported goods NOT on this Negative List are eligible for zero import tariffs, import VAT, and Consumption Tax. The scope of this benefit has expanded dramatically since the closure. The zero-tariff list now covers approximately 6,600 tariff lines, or about 74% of all product categories, a massive increase from 21% pre-closure. This covers a wide range of production equipment, raw materials, auxiliary materials, and consumer goods.
Key Resource: To verify if your specific product is eligible, always consult the latest official Import Taxable Commodity Catalog. You can download it via this link: Hainan FTP Import Taxable Commodity Catalog.
Who is Eligible? Demystifying the “Beneficiary Entity”
The golden ticket to these benefits is becoming a “Beneficiary Entity” (享惠主体). This status is strictly defined and is not automatically granted to all companies in Hainan.
According to the core policy document (财关税〔2025〕12号), eligible entities primarily include:
- Enterprises registered in Hainan FTP with independent legal person status.
- Public Institutions legally established within Hainan FTP.
- Science and Education Non-Profit Private Entities registered in Hainan, as certified by relevant national or provincial authorities.
Crucially, the final list of Beneficiary Entities is determined, adjusted, and filed by the Hainan Provincial People’s Government. This means registration in Hainan is just the first step; official recognition as a Beneficiary Entity is mandatory to claim zero-tariff treatment.
Special Case: Zero-Tariff Vehicles, Ships, and Aircraft
A notable sub-category exists for operational transport equipment. Enterprises registered in Hainan and engaged in transportation or tourism may import vehicles, ships, aircraft, and yachts for operational use at zero tariff. However, strict operational conditions apply (e.g., aircraft must use Hainan as a main operational base, vehicles’ trips to the Chinese mainland are limited to 120 days per year).
The Operational Blueprint: How to Import Under Zero-Tariff
Once your entity is qualified, understanding the customs flow is critical. Hainan operates under a “First Line” and “Second Line” model.
| Stage | Line | Description | Tax Treatment for Beneficiary Entities |
|---|---|---|---|
| Import into Hainan | First Line (Hainan vs. Overseas) | Goods enter Hainan from abroad. | Zero Tariff for goods NOT on the Negative List. |
| Circulation within Hainan | Island Circulation | Goods move between Beneficiary Entities inside Hainan. | No need to pay import taxes. Domestic VAT/Consumption Tax may apply. |
| Sale to Mainland China | Second Line (Hainan vs. Mainland) | Goods (or finished products made from them) are sold into the rest of China. | Import taxes must be paid, based on the original imported materials. |
The Compliance Imperative: The system is designed to keep zero-tariff goods within Hainan’s “customs seal.” If these goods or their derivatives are sold to the mainland (crossing the “Second Line”), the owed import taxes must be settled. The customs authority manages this through an electronic ledger system that tracks all zero-tariff goods, making compliance non-negotiable.
The “Golden Rule”: 30% Value-Added Processing for Mainland Market Access
Here lies one of the most significant strategic advantages. If your Hainan-based company is in an encouraged industry and uses zero-tariff imported materials to manufacture goods, you can achieve a powerful benefit:
If the processing and value-added within Hainan reach or exceed 30% of the total value of the imported and locally sourced materials, the finished product can be sold into mainland China completely exempt from import tariffs (only import VAT and Consumption Tax apply).
Calculation Formula:(Finished Goods Sales Price - Value of Imported Materials - Value of Domestically Sourced Materials) / (Value of Imported Materials + Value of Domestically Sourced Materials) >= 30%
This policy effectively turns Hainan into a strategic, low-cost manufacturing and processing hub for serving the mainland market. It incentivizes substantive production activity over simple warehousing or distribution.
A Step-by-Step Action Plan for Your Business
- Verify Entity Eligibility & Industry Alignment: Before anything else, confirm your planned business activities align with Hainan’s encouraged industries and that your entity structure will meet the Beneficiary Entity criteria. Thorough due diligence is key.
- Secure Official “Beneficiary Entity” Status: Complete your company registration in Hainan and then navigate the process to be officially recognized as a Beneficiary Entity by the Hainan authorities.
- Conduct Product-Specific Checks: Cross-reference your intended imports with the latest Import Taxable Commodity Catalog and the List of Prohibited and Restricted Import/Export Goods to confirm eligibility and any restrictions.
- Understand the Full Policy Landscape: Familiarize yourself with all relevant regulations, including the core tax policy (download here) and the prohibitive list (download here).
- Design Your Operational & Supply Chain Model: Plan how you will use the zero-tariff imports—whether for internal use, resale within Hainan, or processing for mainland export under the 30% value-added rule.
- Establish Robust Compliance Systems: Implement internal controls to ensure perfect tracking of zero-tariff materials as required by the electronic ledger system, preventing costly compliance failures.
Navigating with Confidence: The Role of Precise Information
The opportunities in Hainan are substantial, but they are built on a foundation of specific rules and eligible entities. For an overseas business, verifying the credentials, standing, and compliance history of potential local partners, suppliers, or even your own newly established entity is a critical first step.
Reliable, official business intelligence forms the bedrock of sound decision-making in this new frontier. Whether you need to verify a partner’s business registration, understand its ownership structure, or access its official fillings, having accurate data is indispensable. This is where professional services that specialize in retrieving and authenticating Chinese corporate documents become invaluable, ensuring your venture into Hainan is built on a solid and verified foundation. For instance, obtaining a verified Enterprise Credit Report can provide crucial insights into a potential partner’s legitimacy and financial health before you commit.
Hainan’s door is wide open, and the zero-tariff policy is a powerful key. By thoroughly understanding the eligibility criteria, operational rules, and compliance requirements, international businesses can strategically position themselves to unlock this unique gateway to China’s market.