Chinese Government has designated Haikou as ‘blockchain special zone’ and it has decided to set up a fund worth $1.48 billion (1.666 trillion KRW) for companies that enter this zone and provide up to 80% of tax deduction.
Its strategy is to create an Industry 4.0 city that covers simple payment, game, Big Data, and others with blockchain infrastructures at the center.
This plan contrasts current South Korea’s situation where blockchain market cannot avoid slow growth due to strict regulations.
According to relevant industries, Hainan’s local government recently announced its plan to carry out ‘RSC (Resort Software Community) special zone’ that is applied with omnidirectional government support for companies. Its plan covers designation of blockchain special zone and various tax benefits and support policies for ICT (Information Communication Technology) companies.
Chinese Government is planning to invest about $4.44 billion (5 trillion KRW) by 2020 and gather 3,439 companies and about 14,000 IT personnel.
RSC is China’s 12th free trade zone that was established in 2007 and is an area where many ICT companies come due to new support policies.
RSC’s detailed support plan obtained by The Electronic Times covers unprecedented support policies.
Chinese Government has introduced tax deduction system towards corporate income tax and value added tax. Companies that pay $710,000 (800 million KRW) of taxes annually receive up to 80% of their taxes back.
It also gives back entirety of individual income tax. Separate calculation will be applied to small companies and self-employed companies.
RSC’s support plan also includes a powerful incentive plan to recruit excellent IT personnel who will receive various social insurance, rental house, and subsidy for dormitory within the special zone.
Chinese Government is also going to form ‘Hainan Internet Industry Investment Fund’ worth $1.48 billion and support growth of companies step by step.
“Although it may seem that Chinese Government is prohibiting cryptocurrency from the outside, it has started to make efforts in promoting blockchain industry internally.” said a representative for Huobi. “South Korea also needs to at least carry out experiments and make necessary preparation through regulatory sandbox.”
Staff Reporter Gil, Jaeshik | osolgil@etnews.com