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Doing Business between Macau, China (Zhuhai) and Hong Kong

Macau is an important trading partner of Hong Kong. As a free economy, it practises a simple, low-rate tax system, and possesses unique advantages such as a free port, free flow of capital and no foreign exchange controls. A Portuguese colony until 1999, Macau maintains its own stable currency, the Macanese Pataca (MOP), and retains political autonomy with separate executive, legislative and judicial powers.

Taxation in Macau

While foreigners usually cannot become citizens, they can gain residency by investing 3 million MOP (US$75,000) in the local economy or working for a local company.

Residents are taxed on income earned from Macanese companies. The first 144,000 MOP earned is exempt from personal taxation, after which the top tier is taxed at 12%. Non-resident rates are identical to residents' rates of taxation, but non-residents are subject to a 5% minimum tax rate.

With respect to corporate taxes, the first 600,000 MOP is tax exempt. Thereafter income is taxed at a top rate of 12%. There is no VAT.

Links between Hong Kong and China

In July 2016, Hong Kong and Macau signed the HK-Macau Closer Economic Partnership Arrangement, which will ensure open and free trade relations between the two. This will be further enhanced when the 55km Hong Kong/Macau/Zhuhai bridge opens in 2018. Zhuhai has its own port handling up to 150000dwt. Both Macau and Zhuhai have their own airports.

Across the bridge in China is the Hengqin New District which is located in the southern part of Zhuhai in Guangdong Province. Its geographical advantage is that it will become the only area connected to both Hong Kong and Macau by roads and bridges after the commissioning of the Bridge. It will be just 40 minutes' drive from Hong Kong and separated from Macau by a river. Hengqin also became part of the Guangdong Pilot Free Trade Zone in 2015. Its preferential policies and international business environment have attracted a number of enterprises both at home and abroad to set up their offices, while high-quality residential facilities will be available for managerial and professional staff.

 

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