In a break from established countrywide requirements, foreign universities can now establish schools or campuses in the Hainan Free Trade Port without partnering with Chinese institutions.
Schools can be established in the areas of science, engineering, agriculture and medicine at the undergraduate or graduate levels.
On April 23, 2023, the Ministry of Education and Hainan Province Government jointly published the Interim Regulations on Overseas Higher Education Institutions Running Schools in Hainan Free Trade Port (“Interim Regulations”), allowing overseas universities and vocational colleges to set up science, engineering, agriculture and medical schools or campuses in the Hainan Free Trade Port (“FTP”). According to the Interim Regulations, a foreign university that wishes to establish a school or campus in Hainan FTP must have a good reputation for school administration; a strong international reputation; expertise in science, engineering, agriculture or medicine; and highly sought-after graduates.
Previously, foreign educational institutions were prohibited from independently establishing schools or other education institutions within China if those entities primarily enrolled Chinese citizens. From now on, however, this restriction no longer applies to the establishment of foreign science, engineering, agriculture and medical schools in Hainan FTP. Programs may be at the undergraduate or graduate level and may offer junior college programs if the Hainan Government deems it necessary.
Additionally, foreign universities may benefit from favorable tax policies issued by the Hainan FTP. For example, a “zero tariff” policy applies to newly-established schools when importing teaching and scientific research instruments and equipment for university use. The enterprise income tax imposed on foreign universities is levied at a rate of 15%. A preferential 15% personal income tax also applies to foreign members of scientific research teams, faculty, researchers, or educational administrators who stay in Hainan FTP for 183 days or more within one tax year and whose income in Hainan FTP during that time exceeds RMB 300,000 (approximately $43,000).
The new regulations may be attractive to foreign colleges and universities who are interested in expanding their programs in China but who prefer to establish their own, independent entities or campuses as opposed to partnering with Chinese universities or other Chinese entities. Foreign institutions who go this route may still wish to collaborate with Chinese (or other foreign) individuals or entities to secure land, buildings, and other resources necessary to the establishment of a foreign institution in Hainan FTP.