QFLP & QDLP schemes attract private equity firms to Hainan FTP

South China's Hainan Free Trade Port has increased its efforts to make foreign trade and investment on the tropical island more convenient and freer since the central government released the master plan for its development in June 2020; and, its efforts are now paying off.

Aerial photo shows Century Bridge, a landmark of Haikou, Hainan's capital city. FENG SHUO / HAINAN DAILY

As of the end of October, 2021, Haikou—the capital city of the island province—has seen 33 Qualified Foreign Limited Partner (QFLP) equity investment funds established, and 10 QFLP foreign private equity fund managers registered. Under the outbound investment Qualified Domestic Limited Partner (QDLP) scheme, seven enterprises in the city have been chosen as QDLP pilots, and at $1.36 billion, have received 34% of the total approved quota.

The QFLP system allows individual foreigners and institutional investors to invest in Chinese assets through fund managers, while the QDLP allows licensed international asset managers to raise certain amounts of RMB from qualified institutions and Chinese High Net Wealth Individuals (HNWIs) for offshore investment.

Municipal authorities have been working together with some of the key parks on the island to introduce preferential policies for cross-border investment. Additionally, they have also provided various counseling services for enterprises in need, including handing out guidance pamphlets and setting up a service hotline to answer questions and facilitate enterprises completing the required registration process.