Boosts for duty-free shopping in Hainan
The authorities on the island province of Hainan in southern China have said a policy to attract tourists by increasing the duty-free shopping offer there is working, with high-end leather handbags among the popular items.
China’s government launched a plan to make the whole of the island a free-trade zone by 2025. A pilot free-trade area is already in place. A duty-free “shopping city”, which will cover almost one million square-metres when complete, is under construction near the provincial capital, Haikou.
Further boosts have come in the shape of an increase in the allowance that individuals have for spending on duty-free goods. From July 1, that allowance has more than tripled, rising to more than $14,000 per person per year. The government has also eliminated the limit on the amount shoppers can spend on any single duty-free item; there was a maximum of a little over $1,100.
There is also a new, lower corporate income tax rate for domestic companies operating in the Hainan free-trade zone of 15%, compared to 25% in most parts of China. Overseas companies operating there will be exempt from tax.
Local authorities in Hainan have said they believe these measures will attract high net-worth Chinese consumers to the island, but also tourists from countries such as Vietnam, Thailand and even Russia.
