Article 33 Income from sources in the Hainan Special Economic Zone such as dividends, interest, rentals and royalties and other income derived by foreign business entities that do not maintain establishments in the PRC will be exempt from withholding tax.
Article 34 Subject to approval by the departments of Hainan province in charge of finance and taxation, foreign investment enterprises that are export-oriented or technologically advanced may adopt such accelerated depreciation methods as are commonly used internationally, in order to accelerate the replacement of their equipment and the progress of their technology.
Article 35 Where a foreign business entity reinvests in the PRC for a period of at least five years of profits derived from an enterprise in the Hainan Special Economic Zone, 40 percent of the enterprise income tax already paid on the reinvested portion will be refunded after verification and approval by the tax authorities of the place where the enterprise is located. If such profits are reinvested in an enterprise in the Hainan Special Economic Zone that engages in the construction of infrastructure facilities or in agricultural development or that is export-oriented or technologically advanced, all entered price income tax already paid on the reinvested portion will be refunded.
Article 36 Products produced by foreign investment enterprises that are sold in the Hainan Special Economic Zone will be exempt from product or value-added tax, except tobacco products, alcoholic beverages, mineral oils and a small number of other products as determined by the Hainan Provincial People's Government, which will be granted a 50 percent reduction of product or value-added tax. Where the above products that contain parts or materials that are imported with an exemption or reduction of duty and tax, the customs duty and the product or value-added tax on such imported parts or materials will be exempted, reduced or made up in accordance with the relevant regulations of the State.
Article 37 Foreign investment enterprises may independently sell the products they have produced to other regions in the PRC, except for products subject to State import restrictions, whose sale to such other regions will be submitted for approval in accordance with the relevant regulations of the State. However, in case of such sale, product or value-added tax must be paid according to regulations and, for those of such products that contain parts or materials that were imported with an exemption or reduction of duty and tax, the customs duty and product or value-added tax on such imported parts or materials will be made up according to the regulations.
Article 38 Foreign investment enterprises that require loans in the course of production and circulation may be granted loans by banks with which they have opened accounts or by other financial institutions on a priority basis in accordance with the Bank of China, Loans to Foreign Investment Enterprises Procedures.
Article 39 Foreign investment enterprises that sell their products on the domestic market may apply for treatment as import substitutes of those products that conform to the provisions of the State's measures for the substitution of importation with production.
Article 40 Foreign business entities are encouraged to invest in and establish export-oriented enterprises and technologically advanced enterprises, which will be granted corresponding preferential treatment. The specific measures for granting such preferential treatment will be determined by the Hainan Provincial People's Government.
Foreign investment enterprises that are export-oriented and/or technologically advanced will be examined and confirmed as such by the administrative department of Hainan province in charge of economic cooperation in conjunction with the relevant department.
Part seven Business activities
Article 41 Foreign investment enterprises will enjoy autonomy in their management activities.
Article 42 Foreign investment enterprises may independently decide on the purchase of machinery for use in and the staffing of their own enterprises, as well as on the employment and dismissal of senior management personnel and the increase and retrenchment of staff and workers, as production and business may require. Foreign investment enterprises may advertise for and employ technical personnel, management personnel and workers locally or, if the demand for such personnel cannot be met locally or within Hainan province, in other places in or outside Hainan province (advertisement for and employment of such personnel other than where done locally will be organized and coordinated by the administrative departments in charge of labor of the places where the enterprises are located). Foreign investment enterprises may impose a range of sanctions, up to expulsion, on staff and workers whose violations of rules and regulations lead to certain consequences, depending on the seriousness of the cases. Foreign investment enterprises must report for the record their advertisement for and employment, dismissal or expulsion of staff and workers to the administrative departments in charge of labor of the places where they are located.
Overview
Haikou 
Sanya 
