Legal basis: Article 1, paragraph 1 of the Notice of State Taxation Administration of The People's Republic of China of the Ministry of Finance on Preferential Policies for Enterprise Income Tax in Hainan Free Trade Port levies enterprise income tax at the reduced rate of 15% on encouraged industrial enterprises registered in Hainan Free Trade Port. The encouraged industrial enterprises mentioned in this article refer to enterprises whose main business is the industrial projects specified in the Catalogue of Encouraged Industries in Hainan Free Trade Port, and whose main business income accounts for more than 60% of the total enterprise income. Substantive management means that the actual management organization of an enterprise is located in Hainan Free Trade Port, which implements substantive and comprehensive management and control over the production and operation, personnel, accounts and property of the enterprise. Enterprises that do not meet the substantive operation shall not enjoy preferential treatment.