Macau - Foreign Investment Law Guide.

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Asia Pacific Legal Updates


19 July, 2017


Macau - Foreign Investment Law Guide 2017/2018


1. What are the main reasons foreign investors invest in your jurisdiction?


The Macau Special Administrative Region (Macau) is a former dependent territory under Portuguese administration. Like Hong Kong in 1997, Macau became a Special Administrative Region (SAR) of the People’s Republic of China (PRC) on 20 December 1999, under a joint declaration signed between Portugal and the PRC in 1987.


The Basic Law of Macau Special Administrative Region stipulates that Macau’s social and economic system shall remain unchanged for 50 years following the handover in 1999 until 2049, based on the Chinese formula of ‘one country, two systems’. There are few tariffs or restrictions and Macau is free of foreign exchange control on current capital international transactions. Macau SAR runs its own independent public finance system and is self-governed, with the exception of foreign and defence affairs which are within the responsibility of the central PRC government. Macau’s legal currency is the pataca (MOP$), which is freely convertible and pegged to the Hong Kong Dollar, which, in turn, is pegged to the USD, being the average exchange rate roughly USD 1.00 = MOP 8.00. Macau’s economy is heavily dependent on tourism (mainly gaming) and light manufacturing (textiles and garments). Information from the Statistics and Census Service (DSEC) showed that at the end of 2014, stock of inward foreign direct investment (FDI) reached MOP$218.867 billion.


As to the major industries, the Gaming Sector took a dominant share of inward FDI, with the stock amounting to MOP$128.143 billion at the end of 2014; besides, stock of inward FDI in the Financial Sector was MOP$37.935 billion at the end of the same year.


2. What foreign investment legislation is in place in your jurisdiction (e.g. Foreign Investment Law or Foreign Investment Catalogue)? Please provide a brief overview of such legislation.


There is no specific investment legislation in place in Macau as no restrictions on foreign investment exist in general.


3. What restrictions are placed on foreign investment? Does this differ at local levels of government?


Certain exceptions notwithstanding, there are no restrictions placed on foreign investment in Macau as there are no special rules governing foreign investment. Both overseas and domestic corporations register under the same set and are subject to the same regulations on business, such as the Macau Commercial Code (DecreeLaw 40/99/M).


The law 7/2003 governs the import and export activities from and to the Macau Special Administrative Region, it’s main principle being the freedom of entry, exit and transit of goods in the Region. There are limited foreign control limits in few areas (education, legal services and newspapers).



4. What are the most common business vehicles for foreign investors? How long do they take to be set up? What are the key requirements for the establishment and operation of these vehicles?


To establish a permanent presence in Macau through a local branch, foreign companies must register the establishment of the branch with the Macau Commercial and Moveable Properties Registry (MCMPR).


To initiate the establishment of a branch it is necessary to reserve the name(s) of the branch with the MCMPR. Usually, the branch shall have the same name of the overseas company, adding the reference “Macau Branch”. Furthermore, it is necessary to choose a Portuguese or a Chinese name for the branch.


To reserve the name and obtain a Certificate of Admissibility of Trade Name, it is necessary to inform the MCMPR of the scope of activity proposed for the branch in Macau. Where trademarks under the name proposed to the branch have been already registered with the Macau Economic Bureau, consent of the holders of such trademarks may be required to use that name to establish the Macau branch.


A foreign company that wishes to establish a branch in Macau must appoint one individual with permanent residence in Macau as representative of the branch. However, the MCMPR may allow the appointment of a representative, who does not reside permanently in Macau nor is a Macau citizen, but has a professional residence in Macau that could become the registered address of the branch.


The following documents are required to be submitted to the MCMPR to incorporate a branch of a foreign company in Macau:


(a) Certificate stating the name(s) of the branch;


(b) Certified true copy of the Incorporation Act of the foreign company;


(c) Memorandum and Articles of Association of the foreign company issued by the Registrar of Companies at the country of incorporation – its authenticity must be certified by a Public Notary of the country of incorporation of the overseas company and duly apostilled as per the Convention Abolishing the Requirement of Legalisation for Foreign Public Documents (Hague Convention 1961) or be legalized by a Chinese Consulate;


(d) List of Directors and/or other persons who represent the overseas company certified by a Public Notary of the country of incorporation of the overseas company and duly apostilled as per the Hague Convention 1961 or legalized by the Chinese Consulate; and


(e) Minutes of a Resolution passed in a General Meeting or Board of Directors in accordance with the laws of the country of incorporation of the overseas company and also certified by a Public Notary of the country of incorporation of the overseas company and duly apostilled as per the Hague Convention 1961 or legalized by the Chinese Consulate – this Resolution shall include the following:


(i) decision to set up the branch in Macau;

(ii) name of the branch;

(iii) scope of activity;

(iv) address of the branch in Macau;

(v) capital allocated to the activity of the branch of the overseas company in Macau;

(vi) appointment of the company representative(s) for the branch in Macau with full authority to act on its behalf to sign the relevant documents for the incorporation of the branch; and

(vii) signatures of the representative(s) that will bind the branch in any documents/ acts to be signed/performed for and on behalf of the branch.


(f) A declaration on the commencement of operations needs to be filed with the Macau Finance Bureau for tax registration (Industrial Tax, “The Declaration of the Commencement of Activities – Form M/1) before the company or the branch initiates the business activity in Macau. Companies Private Limited Companies by Quotas Private limited companies by quotas are the most popular type of company and the most common option for small and medium sized enterprises.


The vast majority of companies incorporated in Macau are of this type. The liability of the shareholders (also called quota holders) of private limited companies by quotas is limited to the value of the quotas held by them. In principle, private limited companies by quotas (sociedade por quotas) should have a minimum of two quota holders with both holding quotas of at least MOP$1,000 to a maximum of 30 (thirty) quota holders.


Note that the MCC also allows for the possibility of a single quota holder, in which case the company will have a different form, i.e., it would be a limited liability company by a sole shareholder. The minimum capital requirement for private limited companies by quotas is MOP$25,000. The quota holders can be other companies or individuals and there is no legal restriction on the nationality or residence of the quota holders. Under the relevant rules of the MCC, at least one director must be appointed and this person does not need to be a Macau resident. A company secretary may be also appointed, although this is not mandatory. Inter vivos transfer of quotas is subject to the registration with the MCMPR and must be made in writing with certification of the signature of the parties made by a Macau notary.


Joint Stock Companies The other company form often used in Macau is the joint stock company (sociedade anónima). Joint stock companies must have a minimum share capital of MOP$1,000,000 and at least 25 percent (25%) of the registered share capital must be paid up at the time of incorporation of the company. The capital of a joint stock company must be divided into shares, all of which have the same nominal value, which cannot be lower than MOP$100, represented by share certificates. The shares are, in general, freely transferable.


The liability of a shareholder is limited to the value of the shares subscribed. The MCC requires a minimum of three shareholders to incorporate this type of company. The management of a joint stock company is entrusted to a board of directors.


The appointment of a company secretary and a supervisory board or sole supervisor is mandatory for joint stock companies:


(a) that are owned by ten or more shareholders; or


(b) that issue bonds. Company Registration Once the form or type of business vehicle is decided, an application for the registration of the company must be filled at the MCMPR with the proposed name and the definition of its business object. A company name will not be accepted if it is identical to another existing company. A company may be incorporated with either a Portuguese or Chinese name or both. In addition to the Chinese and Portuguese names, a company can be also incorporated with an English name. For the incorporation of a company registration with the commercial register, the Incorporation Act and the Articles of Association must be submitted to the MCMPR. Both documents should be prepared and confirmed by a Macau lawyer. Where one of the shareholders of the company to be incorporated is a corporation, 


the following additional documents must be submitted:


(a) A Certificate of Incorporation to be issued by the Company’s Registry of the country of incorporation of the overseas company, certified by a Public Notary, his capacity being confirmed by means of the Hague Convention 1961 or by a Chinese Consulate;


(b) A resolution passed by the General Meeting or by the Board of Directors comprising the following:


(i) the decision to jointly with other share (quota) holders to incorporate a company in Macau, indicating the type of business to be developed and capital to be subscribed;

(ii) the appointment of the overseas company representative for signing the contract for incorporating the new company in Macau for and on its behalf; and

(iii) the appointment of the overseas company representative entitled to act on its behalf in all dealings of the company to be incorporated, namely, giving the representative powers to attend and pass resolutions for and on behalf of the overseas company at any general meeting of the new company – this document must be certified by Notary Public in the country of incorporation of the overseas company and duly apostilled as per the Hague Convention 1961 or legalized in a Chinese Consulate.


(c) The Declarations of acceptance of office by the directors who will compose the Administration or the Board of Directors of the Macau company. Upon completion of the registration process, the MCMPR will issue a Commercial Certificate of Incorporation of the Company confirming the type and name of the company, the date of incorporation, object of business, its capital, the identification of the share/quota holders, its shares/quotas, and the directors in charge of the management of the Macau company, etc.


For tax assessment purposes, registration with the Macau Finance Bureau is additionally required. Also, as already mentioned, special industry-specific approval and registration requirements may apply. The entire process may take up to 20 days to be completed.


5. Under what circumstances are foreign investments subject to government approvals? What is the process and timeline for such approvals?


In general terms, to comply with the requirements and the regulatory procedures prescribed by law, registration in the MCMPR and in Macau Finance Bureau is mandatory. Nevertheless, there are specific sectors that require Government approval such as Finance, Insurance, Banking and Offshore Companies, Gaming (Concessionaries and Promoters), Television and Media or the Concessionaries of Public Services (Electricity, Water and Gas).


Once the form or type of business vehicle is decided, a prior application must be filed with the MCMPR requesting the commercial denomination of the company and, once it has been approved, the shareholders may incorporate the company, their signatures being certified by a Notary in the incorporation act.


6. What sectors are heavily regulated or restricted in your jurisdiction, if any? Conversely, what are some of the more open or unrestricted sectors, if any?


As mentioned, special approval requirements exist for certain industry sectors, such as in finance, insurance, banking, for off-shore companies, gaming (concessionaries and promoters), television and media or for concessionaries of public services (electricity, water and gas). The media industry is more open than the other industries, which are highly restricted and regulated.


7. Are there any restrictions on doing business with certain countries or territories in your jurisdiction? (For example, sanctions.)


There are no general restrictions on doing business in place, with the exception of restrictions on those countries or territories upon which the People’s Republic of China have imposed sanctions.


8. What grants or incentives are on offer to foreign investors, if any?


Investment incentives offered to investors, are found in several pieces of legislation, provided that the companies prove that they are involved in the following: promotion of economic diversification and added value within the value chain of their activities, contribution to promotion of exports to new unrestricted markets or contribution to technical modernization. The incentives are in the following categories:


(a) Fiscal incentives – full or partial exemption from taxes (profit/corporate, property tax, stamp duty for transfer of properties and other taxes); industrial tax is currently exempted for all companies;


(b) Financial – incentives by governmentfunded interest subsidies;


(c) Export diversification – subsidies given to companies and trade associations attending trade promotion activities organized by the Macau Trade and Investment Promotion Institute (IPIM).


There are other subsidies in place, such as those for installation and anti-pollution equipment.


9. Are there any free trade, special economic or industrial zones in your jurisdiction and what are their requirements?


The Mainland and Macao Closer Economic Partnership Arrangement (CEPA) signed in 2003 between People’s Republic of China and the Macau Special Administrative Region is the free trade agreement (FTA) in place in Macau. It has, since its implementation, had ten supplementary agreements covering 3 major economic and trade areas: Trade in Goods, Trade in Services and Trade and Investment Facilitation. Among others, the referred FTA covers Zero Tariff in Trade in Goods, Rules of Origin, Certificate of Origin, Definition and Related Regulations in the Mainland and Macau.


Recently, Macau and Hong Kong have started negotiations on a FTA. This new arrangement is deemed to cover, inter alia, “commitment to bind tariff at zero, minimizing non-tariff barriers, avoiding imposing trade remedies, customs facilitation procedures, liberalization and facilitation of trade in services, and legal and institutional arrangements.” Hengqin Island, (located at a distance of 180 meters from Macau) is a special economic zone of the People’s Republic of China and has different incentives for Macau companies and investments.


10. What are the main taxes that could apply to foreign investors in your jurisdiction? (For example, Personal Income Tax, Corporation Tax, Value Added Tax and Social Security Payments.)


In Macau, there are income taxes, taxes on certain expenditure goods and services, and taxes on property and wealth. Under Macau tax laws, individuals and corporations, such as companies or branches of foreign entities that are engaged in commercial or industrial activities in the Region are liable to Industrial and Complementary Tax.



The tax system of Macau includes professional tax, complementary tax, industrial tax, as well as real estate tax. Stamp duty is also levied on certain types of transactions. Professional Tax Professional tax is imposed on the income from work, in cash or in kind, of a contractual nature or not, fixed or variable, regardless of origin or location, currency and the stipulated methods for calculation and payment. Income from work constitutes all income earned from rendering work on another’s account or on one’s own account.


The tax rate is progressive and the amount taxable is only the portion in excess of the threshold established and not the entire amount. Complementary Tax Complementary Income Tax is similar to the corporate profits tax, which may be defined as a percentage taken from the net profit. It has the characteristics of a scheduler tax because it is levied on the revenue earned by the activities carried out in Macau. Complementary tax is progressive and the amount taxable is only the portion in excess of the threshold and not the entire amount.


According to Law 21/78/M of 9th September, Complementary Income tax is paid on the total income derived from the SAR by all corporations, irrespective of their head office address. Current Higher Complementary Income tax stands at 12%. Industrial Tax Industrial Tax or Business Tax, of which payment has been exempted for some years, may be considered as a kind of business registration charge levied according to the classification of the activity developed by the taxpayers. Real Estate Tax Real Estate Tax is a tax levied annually on the profits derived from the urban real estate, which intends to tax the utility value of their fruition expressed in the form of the effective or potential rent.


11. What are some of the employment regulations in your jurisdiction that foreign investors should be aware of? Is it possible to secure residency permits or work visas for foreign nationals under investment?


The employment issue is one of the most important to businesses looking to establish themselves in the Macau market, as it can often be difficult to identify appropriate staff to fill required positions. Despite the Law 21/2009, dated 27 October 2009 – which is the special law that governs the hiring of non-resident workers – the truth is that the regulations governing the hiring of workers from overseas remain stringent and the processing time for obtaining the required working permits for foreigners is normally quite long.


Recruiting Local Resident Workers The “Labour Relations Law” of Macau – Law 7/2008, dated 5 August 2008 – is a general piece of legislation that applies to all employer-employee relationships established in Macau. Employment contracts may be fixed, temporary or indefinite contracts, and are not subject to any special form as they may be made orally or in writing. However, fixed-term employment contracts and employment contracts of minors must be made in written form. Also, fixed-term employment contracts can only be concluded to the satisfaction of the temporary needs of the company. Social Security and Insurance For new employees hired by a local entity in Macau, both the Macau Finance Department and the Social Security Fund must be notified within 15 (fifteen) days of commencement of the employment.


Hiring Non-Resident Workers In accordance with the Macau law, non-residents from Mainland China or other countries are not permitted to work in Macau, unless they have first obtained a valid working permit issued by the Macau Government’s competent authorities – commonly called a Blue Card – which allows the entrance and temporary residence of non-residents in Macau for working purposes only. Hiring of high skilled workers


The granting of a temporary residence permit depends, essentially, on the fulfillment of one condition namely that only investors, investment projects entrepreneurs, person or persons in a management position or qualified holders of academic or technical certificates, may apply for the temporary residence permit; and the observation of one requisite, namely that the skills or duties of the applicant have to be considered of particular interest for the Region. The decision about the particular interest of the technical skills of applicant is within the competence of the Chief Executive, and has been now delegated to the Secretary for the Economy and Finance.


12. Can foreign investors acquire real property and land in your jurisdiction? Are there any restrictions or limitations?


Foreign investors can acquire real property and land in Macau. The Basic Law of Macau Article 6, states that the law shall protect the right of private ownership of property; the land and natural resources within Macau are the the property of the State, with the exception of private lands recognized as such according to the laws in force in Macau before the establishment of the Special Administrative Region of Macau. This being said, according to Macau Land Law, we may consider two main types of lands, considering their juridical regime, as follows:


(a) Public domain lands – those that, by law are considered as such; and


(b) Private ownership lands – those in which a right of ownership has been definitively constituted by private entities. According to Macau Land Law, available (res in commercium) lands may be the object of:


(1) Sale;

(2) Concession by Aforamento;

(3) Concession Leasehold; and

(4) Precarious use or occupation.


As far as the annual rent is concerned, it is established in the Concession Leasehold Contract – which is the more common juridical regime – taking into consideration the laws and regulations that establish the rents. The term for a concession cannot exceed 25 years and, subsequently, may be renewed successively for 10 years, provided that the concessionaire of the land submits a declaration with the Macau Government at least 6 months before the term is up.


The renewal is subject to a payment of a lump sum special contribution, which shall be fixed from time to time by the Macau Government, by reference to the updated rent calculated according to the law which regulates the rent of the land’s lease concession at the time of the renewal.


The Government of Macau is the entity governing the management of the land according to the Basic Law and is represented by the Chief Executive, who is responsible for the concession of lands and any other rights related to the lands.


13. Are there any processes in your jurisdiction that can block foreign investment under specific circumstances?


There are no processes in Macau that can block foreign investment under specific circumstances. 


14. What foreign currency or exchange controls should foreign investors be aware of? Macau is a free port without any exchange controls affecting the flow of capital.


15. Are there any restrictions, approval requirements or potential penalties if a foreign investor withdraws their investment in your jurisdiction?


Except for the contractual remedies available to the parties, there are no restrictions, approval requirements or potential penalties if a foreign investor withdraws their investment in Macau.


16. What contract enforcement and investor protection mechanisms are in place in your jurisdiction, if any?


General judicial mechanisms are available in Macau, which is a Rule of Law system based on the Civil Law. Disputes in MSAR can be settled with resort either to judicial or to non-judicial means. The Judicial system of MSAR is composed of three different levels:


(a) First Instance Courts;


(b) Second Instance Court;


(c) Last Instance Court.


The First Instance Court, comprises a specialized court, the administrative and the Judicial Base Court which, with some exceptions, is the common one for citizens to access justice. All the questions, apart from the administrative field, are submitted there and decided in conformity.


The procedures for the conduct of litigation are governed by the Civil Proceedings Code. According with the law of MSAR, it is possible to appeal if the value of the claim is in excess of MOP 50.000,00. The effect of the appeal (suspensive or otherwise) will vary in accordance with the procedural circumstances or the subject matter of the decision being challenged. Normally, appeals from a final decision of the lower court on the merits of the claim will suspend enforcement of that decision. The Second Instance Court is an Appeal court of the decisions of the First Instance Court. However, its primary jurisdiction is to decide on matters mainly related with Political Organs.


The Last Instance Court is the final arbiter of appeal, which enforces and is the ultimate bastion of the legality of the system. Without prejudice to bilateral agreements on the recognition and enforcement of foreign judgments, the Civil Proceedings Code generally provides for expedited proceedings for enforcement of foreign judgments. MSAR also leaves the door open for the disputes to be settled by non-judicial means, such as arbitration, outside the Court system. The option is supported by the large autonomy that parties enjoy in MSAR legal system concerning civil and commercial matters.


The statutes on arbitration oversee a special regime for international commercial arbitration, as regulated by Decree-law 55/98/M, dated 23 November 1998, based on UNCITRAL rules. Domestic arbitrations are regulated by the Arbitration Law, Decree Law 29/96/M, dated 11 June 1996. There are specialized bodies for the Judges (Judiciary Council), Public Prosecutors (Council of the Public Prosecutor) and for licensed Lawyers (Macau Lawyers’ Association, a professional association empowered with public interest functions). 


17. Does your jurisdiction have any bilateral or multilateral investment protection treaties with Asia-Pacific jurisdictions that are commonly used for investing into the country?


There are no bilateral or multilateral investment protection treaties with Asia-Pacific jurisdictions that are commonly used for investing in Macau.


18. What intellectual property rights protections are available in your jurisdiction to foreign investors?


Intellectual Property is regulated by the IPR of Macau, whereas Authors’ Rights are protected by the Regime on Authors’ Rights. IPR makes the distinction between commercial establishments, trademarks, patents and designs. According to the IPR, a trademark may consist of words, letters, numerals, sounds, the shape of goods or their packaging, designs or patterns, or colours and any combination of the above.


The Economic Bureau is responsible for the registration of trademarks and the MCMPR for the registration of commercial names. The remedy for trademark infringement in Macau can be obtained by administrative and judicial measures. Administrative Protection In Macau, the administrative protection in the field of intellectual property is a relatively strong protection. The Customs Department of Macau is the entity responsible for the enforcement and prevention of the violations of the IP rights. Judicial Protection


The principal measure for remedy of IP rights infringement is judicial protection, which is governed by specific rules in the IPR. 


19. Are there any environmental policies and regulations that (potential) foreign investors should be aware of prior to or throughout the investment process in your jurisdiction?


There are no special environmental policies and regulations that (potential) foreign investors should be aware of prior or throughout the investment process in Macau.


20. Are there any government agencies or non-governmental bodies that (potential) foreign investors can turn to for more information on investment in your jurisdiction?


Macau Trade and Investment Promotion Institute (IPIM) is the governmental body which “aims to assist both local and overseas enterprises to achieve business goals in a competitive market, obtain information, understand the current market trends and grasp business opportunities”. Hence, it is one of the bodies which (potential) foreign investors can turn to for more information on investment in Macau. Other bodies are Chambers of Commerce, specially the Macau European Chamber of Commerce and the American Chamber of Commerce.


21. Have there been any recent proposals for reforms or regulatory changes that will impact foreign investment in your jurisdiction?


There have not been any recent proposals for reforms or regulatory changes that will impact foreign investment in Macau. 


22. Are there any other features regarding foreign investment in your jurisdiction or in Asia that you wish to highlight?


Macau is still a well-kept secret in terms of investment destination. It is one of the freest economies of the World, with a tax rate of as low as 12% (individuals and companies), being very attractive to set up investment companies, as it does not have the costs of the sister Special Administrative Region of Hong Kong.


Despite the downturn in the gaming revenues, the fact is that it is still an investment destination as there are plenty of new resorts to be opened in the next couple of years. The new bridge to be inaugurated in the Pearl River Delta, linking Hong Kong, Macau and Mainland, as well as the development that will occur in the neighboring Hengqin Island, which is a Free Trade Zone and operates under a special regime in the People’s Republic of China, makes Macau as a place to invest in the short and medium term.


This article first appeared in the LexisNexis Foreign Investment Law Guide 2017-2018. Please click here to view or download the full Guide. 


For further information, please contact: 

Pedro Cortés, Partner, Rato, Ling, Lei & Cortes - Advogados

[email protected]