Business Alert – China

With the approval of the State Council, the Ministry of Finance recently examined and passed in conjunction with the Ministry of Commerce, General Administration of Customs and State Administration of Taxation the incorporation proposal and articles of association for the Hainan Duty-Free Goods Co Ltd to be solely funded by a provincial state-owned enterprise. The new company will be allowed to deal in offshore duty-free goods as approved by the state, build and operate duty-free stores, and engage in other related businesses.

The approval to set up the Hainan Duty-Free Goods Co Ltd and grant a duty-free licence to this company is one of the most important supporting measures taken by the provincial government of Hainan to implement the domestic duty-free policy, said the Ministry of Finance. This policy is expected to better stimulate Hainan’s enthusiasm to implement the domestic duty-free policy, encourage competition, prevent monopoly, and promote the healthy development of the duty-free goods market.

According to an official in charge of the Department of Enterprises of the Ministry of Finance, the Sanya Offshore Duty-Free Store will be operated by the China Duty Free Group Co Ltd under the CITS Group Incorporation. The pilot scheme for this policy was officially launched on 20 April 2011. The Hainan provincial government submitted its application to the State Council to set up the Hainan Duty-Free Co Ltd under a wholly state-owned enterprise of the province and for a duty-free licence in 2011 and the application was examined and endorsed by the Ministry of Finance in conjunction with other ministries.