China’s Hawaii Looks To Russian Nationals For Investment & Tourism
Op/Ed by Chris Devonshire-Ellis
- Numerous tax incentives for foreign investors in Hainan Island
- Russian bank to open in Haikou
- Medical tourism, finance and trade are all developing sectors
Haikou, the capital city of China’s Hainan lsland, has created an official channel to promote investment cooperation with Russia and Russian-speaking countries. According to the Haikou Daily, the local authorities signed several agreements with the Russian financial and development institutions.
Hainan Island lies off the coast of Vietnam and is often regarded as China’s Hawaii with significant beach resorts on the southern coast and the city of Sanya. It is extensively a tourism related destination, however is expanding into other areas such as finance, science and technology, medical tourism, trade and economics, in addition to tourism. Given its year round warm climate, Hainan is an attractive proposition for Russian expatriates. Hong Kong is an hour flight away.
The Haikou Office for the Promotion of Investment Cooperation concluded online agreements with the Russian Solidarity Bank, the Russian-Asian Union of Industrialists and Entrepreneurs (RASPP), as well as with China Huaming International Investment.
“Hainan’s Free Trade Port is a new ‘model project’ for China, demonstrating Beijing’s openness towards other countries,” said Igor Chumakovsky, Chairman of the Board of Solidarity Bank. “We are interested in expanding cooperation with Haikou in such areas as financial sector, science and technology, trade and economics, tourism. We are ready to create a new future for Russian-Chinese cooperation hand in hand.”
Russian and other Foreign investors can note that Hainan’s Free Trade Port provides incentives to attract businesses, and include a lowered corporate income tax rate to 15%; tax exemption for overseas income, one-off pre-tax deduction and accelerated depreciation and amortization for newly purchased assets, as well as individual income tax relaxations. These preferential policies are applicable from January 1, 2020 to December 31, 2024. We discussed them and the application process for interested investors in the article Hainan Free Trade Port: How To Apply For The New Preferential Tax Policies.
Hainan has designs on becoming China’s largest Free Trade Port by 2035 while plans to develop as a medical tourism centre for wellness, cancer and other treatments as well as corrective and plastic surgery have also been unveiled.
In accordance with their signed agreements, the Russian bank and RASPP will work out issues related to the creation of their representative offices in Haikou. The presence of access to Russian banking facilities in China should be a major attraction to Russian investors.
Investment structures for Russian companies in Hainan could involve establishing a wholly owned company on the Island, which full banking services, an import-export license and the local tax benefits. Branch offices can then be established elsewhere in China that report into the Hainan entity. Dezan Shira & Associates assist Russian investors into Asia and have multiple offices throughout China. To contact us please email Maria Kotova at email@example.com.
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During these uncertain times and with sanctions in place, our firm helps Russian companies relocate to Asia. We also provide financial and sanctions compliance services to foreign companies operating in Russia. Additionally, we offer market research and advisory services to foreign exporters interested in doing business in Russia as the economy looks to replace Western-sourced products. For assistance please email firstname.lastname@example.org or visit www.dezshira.com