ABSTRACT
One of the main goals behind Hainan’s establishment as an SEZ in 1988 was to attract investment, domestic as well as foreign, in order to accelerate the economic development of the island. Consequently, on May 4, 1988, the State Council promulgated a set of “Regulations for the encouragement of investment in the development of Hainan Island” which provided the legal framework for the preferential policies adopted to attract foreign investors. The regulations specified a range of preferential treatments towards foreign investors in terms of tax exemptions, tax deductions, and tax holidays. At the time they were promulgated, they provided the most favorable investment regulations of all economic development zones in China.
