As important conduits for inbound and outbound cross-border investment, the QFLP and QDLP policies of China’s southern Hainan Province have sparked enthusiasm among market players since being released. Statistics show that by the end of April this year, the tropical island has seen 61 Qualified Foreign Limited Partner (QFLP) equity investment funds established with a total registered capital of around $6.38 billion, with 17 QFLP foreign private equity fund managers registered. Under the outbound investment Qualified Domestic Limited Partner (QDLP) scheme, 37 enterprises in the province have been admitted into the QDLP pilot scheme.

Aerial photo of Haikou, capital of Hainan Province and a key city in the development of the Hainan Free Trade Port. HINEWS / LIU YANG

The encouraging numbers indicate that the QFLP and QDLP policies of the province boast more flexibility and convenience when compared with other similar policies. Advantages include lower access requirements, lower investment amount limitations, simplified review and approval procedures.

The free trade island’s policies have thus enticed many high-quality foreign private equity fund managers - including Sequoia Capital, ZhenFund and BOCOM International - to set up QFLP equity investment funds on the island. Additionally, notable asset management institutions, such as KKR & Co. LP(KKR), IDG Capital, Primavera Capital, Everbright Limited and Ping An Trust, were among the first batch of enterprises to apply for approval as QDLP pilot enterprises.