Just a few days ago, Hainan received a big gift from the Party Central Committee. “The state decided to support the Hainan Island to build a free trade pilot zone and achieve the goal of establishing a free trade port in stages.” Before we congratulate Hainan, we have to understand that what is the difference between this free trade port and the free trade zone? Is it the difference between a port and a district?
Free trade port
A port area that allows foreign goods and funds to enter and exit freely.
Location: Being in the country and region, outside the customs checkpoint.
Permissions granted: All or most of the goods entering or leaving the port area are exempt from customs duties, and business activities such as free storage, exhibition, dismantling, modification, repackaging, finishing, processing and manufacturing of goods are permitted in the Freeport.
Existing members: Shanghai Port, Tianjin Port, Dalian Port, Ningbo Port…..
It may be impossible to understand after reading the above paragraph, and the small series is detailed in detail.
Hong Kong is an internationally recognized and relatively successful free trade port. Let’s take a look at how Hong Kong does it.
Simple low taxes do not have any trade barriers
In addition to its strategic location, Hong Kong has long pursued a free trade policy, has no trade barriers, and has simple import and export procedures. It also has three types of direct taxes, namely: profits tax, salaries tax and property tax. There is a tax allowance system.
Actively participate in multilateral regional and bilateral trade agreements
Hong Kong and ASEAN have signed free trade agreements and investment agreements covering trade in goods, trade in services, investment and other related areas. This “positive” protection and improvement of the opportunities for Hong Kong goods and services to enter the foreign market has promoted the globalization of trade and services to create new business opportunities for business people.
Create a business-friendly environment
Hong Kong has specially established the “Business Facilitation Advisory Committee” to optimize the local regulatory system. Provide an effective cross-sectoral cross-sectoral communication platform to enable the industry to express its views on the regulatory issues.
Spare no effort to strengthen customs clearance
Hong Kong only imposes minimum licensing controls on the import and export of goods and has adopted a number of measures to reduce the burden of trade control on the industry. And speed up the list. It’s no wonder that Hong Kong’s natural and free port is widely recognized.
Free trade zone
The tariff quarantine area adopting the free port policy is more favorable in terms of trade and investment than the relevant provisions of the WTO.
Location: Within the border of the country and region
Permission granted: Allow foreign goods to be exempted from customs duties.
Existing members: Shanghai Free Trade Zone, Tianjin Free Trade Zone, Guangdong Free Trade Zone, Fujian Free Trade Zone.
I have already got a deeper understanding of the free trade port, and I will talk about free trade in Dubai.
Foreign capital can be 100% controlled, and funds can be remitted freely
There is no need to say more about the richness of Dubai. As a trade and financial center in the UAE and even the Gulf region, it has more than 30 free trade zones. In the designated free trade zone, although goods and services can only be transferred in the region, foreign investors can enjoy 100% holding.
Rich incentive policy
The incentive policy of the Dubai Free Trade Zone includes the free remittance of capital and profits without any restrictions. Enterprises in the Free Trade Zone can enjoy the exemption of corporate tax (with time limit) personal income tax, import and export tariffs, no minimum wage and Hire local staff requirements.
These incentives are really exciting, consider how you can invest in scrap roads in Dubai.
to sum up
Free trade ports (or empty lanes) compared to free trade zones and free trade zones, including the entire city, are only areas delineated around the city. Secondly, Freeport gives a wider range of “freedom”. In addition to freedom of trade, Freeport also includes freedom of investment, freedom of employment, freedom of operation, and freedom of movement of business personnel.
Finally, the Freeport is able to carry out offshore trade to develop offshore finance, which is the biggest difference between it and the free trade zone.
Offshore business refers to the financial activities in which banks absorb non-resident funds to serve non-residents.