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Haikou introduces preferential policies to boost headquarters economy

By Ma Zhiping and Liu Xiaoli in Haikou | China Daily | Updated: 2018-06-08 09:46
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A yacht moves past the cruise ship hub in Sanya, Hainan province, during a nightly circuit in February. [Photo by Sha Xiaofeng/For China Daily]

Haikou, capital city of China's southernmost Hainan province, has introduced a set of preferential policies to attract global conglomerates and boost the development of its headquarters economy, it was announced at a news conference on Wednesday.

The move, targeting Fortune Global 500 companies, leading industrial conglomerates and internationally well-known enterprises and organizations, is an initial step to encourage growth of a headquarters economy in Haikou.

Under the preferential policies, a transnational corporation will get 3 million yuan ($470,000) as a reward for establishing its headquarters or regional headquarters in Haikou, and for an international organization, the reward is 2 million yuan.

Regional headquarters engaged in tourism and modern service industries will each receive a bonus of 5 million yuan if their first year operations make a contribution of 30 million yuan to local revenue, and headquarters of companies from new and high-tech industries will receive a bonus of as much as 10 million yuan if they contribute 30 million yuan annually to local revenue after registration, according to the incentive measures released at the news conference.

Haikou will offer a maximum of 3 million yuan to a new company setting up its headquarters in the city as an office rent allowance within the first five years, and a maximum subsidy of 10 million yuan if it purchases an office in the city. The city is home to a total of 4,384 companies that have individual registration capital of 50 million yuan to 1 billion yuan.

The provincial capital has also rolled out incentive policies to woo and retain talented individuals. Senior executives whose annual salary exceeds 500,000 yuan, for instance, can get an individual income tax rebate of 50 percent in the first three years. They will also enjoy special policies related to medical and social security services and education for their children, according to Sun Shiwen, vice-mayor of Haikou.

He said the city government will also provide rewards for companies establishing headquarters that will play a key role in helping boost certain local economic sectors, such as tourism, new and high-tech and tropical agriculture.

"Haikou will invite well-known professional service firms involved in accounting, law, management consulting and training to serve the development of its local headquarters economy," said the vice-mayor at the news conference.

He disclosed that talks are under way with the world's biggest four accounting firms-PricewaterhouseCoopers, Deloitte Touche Tohmatsu, KPMG and Ernst & Young-about opening regional headquarters in Haikou. Alibaba Group Holding Ltd, COFCO Group Ltd, China National Travel Service Group Corp and Suning Corp are also on the list.

According to Haikou's plan, the foundation of the city's headquarters economy will be formed by 2020. Haikou will optimize government services to create a better environment for business people and enterprise innovation to support its headquarters economy, the vice-mayor said.

In April, China announced a decision to support Hainan in developing the whole island into a pilot free trade zone, and gradually exploring and steadily promoting the establishment of a free trade port with Chinese characteristics.

On Sunday, Hainan announced the establishment of the 298 square kilometer Haikou Jiangdong New District of China (Hainan) Pilot Free Trade Zone, to promote the development of a free trade zone across Hainan island.

Fu Xuanchao, a member of the new district planning and leadership group and director of the Hainan Provincial Development and Reform Commission, said the new district, on the east coast of Haikou, will host the regional headquarters, and will also be built into an international financial trade center and international education base.

"The new district will be an international trading venue for energy, shipping, bulk commodities, property rights, stocks and carbon credits," Fu said.

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