Trade in Services Q&A (2)

Extract From the Enquiries Received by “CEPA” Information Center

In the definition of Macao Service Supplier, what does “Complementary Tax” refer to?

Complementary tax is the tax collectee Macd by thao Special Administrative Region Government imposing on the profits generated from local industrial and commercial activities.

Are education services currently opened under “CEPA”?

There are 27 service industry sectors currently opened under CEPA, in which education services are not included. However, “CEPA” is an open-ended agreement. The Mainland and Macao will continue to discuss further liberalization on various kinds of products and services.

 How can an investment immigration-consulting firm be benefited from the preferential treatments under “CEPA”?

The relevant sector has not been opened under CEPA at this stage. However, companies can provide relevant information to the Macao Economic Services for discussion with the Mainland in the next round of liberalization under CEPA.

In Annex 5 to “CEPA”, what is the definition of foreign companies registered in Macao SAR? If a company is established under the Macao Offshore Law, can it be considered a Macao Service Supplier?

According to the Macao Offshore Law (Article 4, Decree-Law no. 58/99/M), offshore companies are not allowed to engage in trading activities with Macao citizens in the Territory and to use Macao currency (MOP) in their business activities. Therefore, offshore companies are not considered engaging in substantive business operations in Macao.  Hence, offshore companies do not comply with the requirements set out in CEPA for a Macao Service Supplier.

Is it true that the change of shareholders of a company after “CEPA” has come into effect will affect its eligibility to enjoy the CEPA benefits?

According to footnote 2 of Annex 5 to CEPA, “ from the day the “CEPA” comes into effect, where more than 50% of the equity interest of a Macao service supplier has been owned for at least one year since a merger or acquisition by acquired or merged will be regarded as a Macao service supplier”.

After a company obtains the Macao Service Supplier Certificate (MSSC), what kind of procedures it has to go through when establishing a company in the Mainland?

According to Article 7 in Annex 5 to CEPA, when Macao service suppliers apply to provide specific services in the Mainland, they should submit the required documents and information, declaration, and certificate to competent Mainland examining authorities. When establishing an enterprise in the Mainland, applicants should submit their applications to local departments of Foreign Trade and Economic Cooperation and local Administrations for Industry and Commerce.

Can a private notary authenticate the declaration used for applying MSSC?

The declaration should first be notarized by any of the Public Notary Offices of the Macao SAR or China appointed attesting officers.  Afterwards, the declaration should be verified, examined, and sealed by the China Legal Services (Macao).

How long is the Macao Service Supplier Certificate valid?

From the date when the certificate is issued, it is valid for two years.

With regard to the required ”Original or copy of the document(s) substantiating that the Macao Service Supplier owns or rents business premises in Macao”, what kind of documents the MSS should submit?

• If the property is self- owned, the MSS may submit the contract or notary deeds of the premises or written certificate (also known as ‘proof of property inspection’) issued by Macao Real Estate Registry;
• If the property is leased, the MSS can submit the lease contract signed between the tenant and the property owner.

If a company is a Group A Complementary Tax payer but does not possess any financial statements signed by certified accountants, how can it submit the required financial statements?  Also, how long ago should the social security fund payment receipt it submitted be traced back to?

• The MSS may submit the M1 complementary tax declaration form and M5 tax assessment notification, both of which bear the declared profits of a company and the taxable profits assessed by the Financial Services Bureau. Besides, a company can also submit any other financial information for evaluation.
• The company should submit their social security fund payment receipt of the latest quarter.

When filling out the declaration form, are the signatures of all the shareholders required?

The declaration form only needs to be signed by one of the legal representatives of the company on business registration, along with a copy of the signatory’s identification documents.

 Are there any special requirements on the signatures appearing on the declaration form?

Signatures of the company representatives on the declaration form should be the same as those appear on the records of the Macau Businesses and Vehicles Registry for business registration.

 What are the procedures for re-applying for the “Macao Service Supplier Certificate?”

• Re-applications can be submitted within three months from the date the company received the MSSCs for the first time;
• The structure and the operation of the company must remain unchanged as those on the applications  for the MSSCs for the first time;
• The re-application forms must be attached with corresponding number of declarations notarized by any Macao Public Notary Offices or China appointed attesting officers and sealed by the China Legal Services (Macao) after examination and verification.
• Copies of the previously issued Macao Service Supplier Certificates.

 When a MSS applies for the establishment of an enterprise in Mainland, is it true that the name of the enterprise in the Mainland be the same as that of its Macao company?

The State Administration for Industry and Commerce regulates the procedures in relation to company name registration in accordance with the “Implementation Measures for the Administration of Enterprise Name Registration” or the “Rules for the Administration of the Registration of the Legal Representatives of Enterprises”, which govern the formation and registration of an enterprise. In these laws, there are no regulations stipulating that the name of an enterprise established in the Mainland must be the same as that of its overseas parent company.

Can “Representative Offices” apply for Macao Service Supplier Certificates?

According to “CEPA”, any overseas company, representative office, liaison office, “mail box company”, and company specifically established for providing certain services to its parent company registered in Macao is not considered Macao Service Supplier.

 When a company applies for the “Macao Service Supplier Certificate”, is there any minimum business turnover requirement?

The applicant company should conform to the definition of Macao Service Supplier in Annex 5 to “CEPA” and the market access conditions of relevant service sectors in Annex 4 to “CEPA”.

When an enterprise applies for the certificate, are there any requirements on the years of operation?

Generally, enterprises should be registered in Macao and have been in operation for three years or more (including 3 years). Construction and related engineering service enterprises, banking and other financial services providers, (excluding insurance and securities), and insurance and related services providers should be registered in Macao and have engaged in substantive business operations for 5 years or more.  There is no limitation on the years of substantive business operations in Macao for Macao service suppliers providing real estate services.   However, applicant companies still need to provide relevant documents to verify their substantive business operations in the real estate sector for examination and approval.

Have magazine publishing services been opened under CEPA ?

Magazine publishing has not yet been opened under CEPA. However, “CEPA” is an open-ended agreement. Mainland and Macao will continually discuss the liberalization of various products and services in the future.

Are there any restrictions on foreign enterprise establishing representative offices in the Mainland?

According to the Provisions on the Administrative Measures for Foreign Enterprises to Establish Permanent Representative Offices and Detailed Implementation Rules of the Ministry of Foreign Trade and Economic Cooperation (MOFTEC) on the Examination and Approval of Permanent Representative Offices of Foreign Enterprises, if foreign enterprises that are to establish permanent representative offices in the Mainland must have registered legally in their home countries. Also, the permanent representative offices in the Mainland are not allowed to engage in any business activities but can carry out only non-business activities, such as business networking, product introduction, marke research, and technology exchange, etc.

Are there any regulations governing the recruitment of employees of those permanent representative offices mentioned above?

The permanent representative offices of foreign enterprises can employ non-Chinese citizens or Mainland citizens as principal representatives or representatives. If the enterprises employ Mainland citizens as representatives, they should commission local foreign affairs units or other units appointed by the Government of People’s Republic of China to carry out relevant recruitment procedures. If the enterprises employ Macao citizens as representatives, they should obtain work permits for their representatives from local Public Security departments and “Taiwan, Hong Kong and Macao resident employment permits” from local Labor departments. Moreover, enterprises should also register their employees for social security fund with local labor departments and pay insurance premium for them accordingly. 

Can Macao citizens become Mainland lawyers?

According to Table 1 in Annex 4 to “CEPA”, Macao residents of Mainland citizenship are allowed to sit the State Judicial Examination and obtain relevant legal professional qualifications of the Mainland in accordance with the “Implementation Measures for State Judicial Examination”.

Do examinees need to submit a Macao Service Supplier Certificate to sit the State Judicial Examination?

Macao examinees do not need to apply for Macao Service Supplier Certificates for sitting the State Judicial Examination.

Is it necessary for the Macao company to apply for the Macao Service Supplier Certificate when it establishes a law firm in the Mainland?

• According to Table 1 in Annex 4 to “CEPA”, qualified Macao law firms can enter the Mainland market; however, the mode of operation and the business scope of the firms will be regulated in accordance with the regulations in CEPA.
• When establishing a representative office in the Mainland, the Macao law firm is required to submit a Macao Service Supplier Certificate.

How can Macao residents engage in bookkeeping agency services in the Mainland?

According to the content of the Supplement to CEPA, “consulting companies in the Mainland established by Macao auditors and accountants that have satisfied the requirements of the Mainland's “Provisional Measures for the Administration of the Provision of Bookkeeping Services” to provide bookkeeping services.  Macao auditors and accountants providing bookkeeping services should have obtained the Mainland’s accounting qualification certificates.  In addition, the person in charge of the bookkeeping services should hold the relevant Mainland’s professional qualification (professional title) of accountant or above”.

Although the medical service industry has been opened under “CEPA”, provinces or cities in Mainland still impose certain restrictions on medical service suppliers. The restrictions set by local authorities contradict the spirit of “CEPA” and prevent CEPA from serving the purpose of market opening to the fullest.

• “CEPA” is a liberalizing policy for market access and lowering entry barriers. On the other hand, the Mainland still maintains the regulations governing local medical service suppliers, no matter they are Mainland or foreign professionals, to ensure market fairness and quality of services.
• The opinions of Macao professionals will be collected and submitted to the Joint Steering Committee set up under “CEPA” through Macao Economic Services.  The Committee will discuss the various issues arising from the implementation of “CEPA”.

What are the market opening measures for medical services under “CEPA”?

• The majority of medical personnel employed by Macao-Mainland joint venture hospitals or clinics can be Macao permanent residents.
• The maximum duration for the license for providing short-term medical, dental and Chinese medical services in the Mainland is 3 years for practitioners who are legally eligible to practice in the Macao Special Administrative Region. Upon expiry, this short-term license is renewable.
• To allow Macao permanent residents in possession of a medical, Chinese medicine or dental higher-education degree from a full-time tertiary institution approved by the Education Administration Department of the Mainland State Council to sit the Mainland’s dental qualification examination after they are legally eligible to practice through examination in Macao and after they have been licensed to practice for over one year. They may also sit the Mainland’s qualification examination after they have completed a one-year internship in the Mainland and passed an assessment in accordance with the relevant requirements. A “medical (or dental) practitioner’s qualification certificate” from the Mainland will be issued to those who pass the examination.
• To allow Macao permanent residents who have acquired a Chinese medicine degree from the Macao University of Science and Technology and are legally eligible to practice in Macao to sit the Mainland’s qualification examination on the condition that they complete a one-year internship in a third-level traditional Chinese medicine hospital in the Mainland and have passed the respective performance test; or that they have been practicing in Macao for more than 1 year. A "medical (traditional Chinese medicine) practitioner’s qualification certificate" from the Mainland will be issued to those who pass the examination.
• The categories of medical qualification examinations that Macao permanent residents are allowed to sit are: clinical medicine, traditional Chinese medicine and dentistry.
• To allow Macao permanent residents who are legally eligible to practice in Macao and have done so for 1 year to sit the Mainland qualification examination (excluding Chinese Medicine). A "medical (dental) practitioner’s qualification certificate" from the Mainland will be issued to those who pass the examination.
• To allow Macao permanent residents in possession of legal eligibility to practice medicine in Macao and having done so for 5 years establish a clinic in the Mainland after they obtain the  "medical (dental) practitioner’s qualification certificate". Application and registration procedures for clinics should refer to the Mainland relevant regulations.

What are the business scopes of telecommunication services allowed in the Mainland?

1. As of the day following the signing of “CEPA” (18^th October, 2003), Macao service suppliers are allowed to set up joint-venture enterprises in the Mainland to provide the following five types of value-added telecommunications services:

   (1) Internet data centre services;

   (2) Storage and forwarding services;

   (3) Call centre services;

   (4) Internet access services;

   (5) Content services.

2. The shareholding in joint venture enterprises engaging in the value-added telecommunications services by Macao service suppliers mentioned in item 1 above should not exceed 50%.
3. There will be no geographical restrictions for the joint venture enterprises formed by Macao and Mainland service suppliers to provide value-added telecommunications services mentioned in item 1 above.

For further information about the Mainland China’s “Catalog of Telecom Service Classification”, please visit http://www.mii.gov.cn/art/2006/03/07/art_248_7593.html

If a Macao Information Technology company is to establish a wholly-owned company offering IT services in the Mainland, how can they obtain the relevant information about company establishment?

• Macao service suppliers can apply for the computer information system integration certification in accordance with the relevant laws and regulations in the Mainland.
• If Macao enterprises are to provide information technology services in Mainland, they can apply for establishing a foreign enterprise to the local departments of Foreign Trade and Economic Cooperation and local Administrations for Industry and Commerce. They can also refer to the webpage of “Laws and Regulations on “CEPA”(content of “Relevant Laws for foreign investors investing in Mainland”)” on the website of Macao Economic Services: (http://www.economia.gov.mo/web/DSE/public?_nfpb=true&_pageLabel=Pg_CEPA_MLRN&locale=zh_MO)

Is it true that Macao companies must open a wholly-owned company in the Mainland to provide services? Are corresponding qualifications required from the applicant companies after they obtain Macao Service Supplier Certificates?

Applicants should understand first what kind of construction services they are providing.  Since the market access conditions for professional construction services or construction related engineering services are different, the regulations governing the two sectors are different as well.

• If it is professional services that the applicants are providing, according to Annex 4 to “CEPA”, Macao companies can provide relevant services in the form of natural person or juridical person, and they are not required to establish wholly owned companies in the Mainland. Therefore, to provide these professional services, Macao companies do not need to obtain any qualification certification according to “CEPA”.
• If it is construction and related engineering services that the applicants are providing, according to the same annex, Macao service suppliers can provide relevant services in Mainland in the form of wholly owned companies, but they must apply for the required qualifications in accordance with relevant laws and regulations in the Mainland. Taking into account the nature of the construction and related engineering services, Macao companies must establish construction companies in Mainland before they can offer relevant services. However, “CEPA” has not stipulated that Macao companies must operate the businesses on a wholly-owned basis.

What are the criteria for engaging in wholesale and retail businesses in the Mainland?

• According to “CEPA”, Macao service suppliers are allowed to render wholesale services on a wholly-owned basis in the Mainland with no geographical restrictions.
• Macao service suppliers are allowed to set up wholly-owned retail commercial enterprises in the Mainland. However, the retailing services provided by Macao service suppliers in the Mainland with regards to staple foods, vegetable oil, edible sugar and cotton remain are subject to the People’s Republic of China’s commitments made to the World Trade Organization.
• Macao service suppliers that have established over 30 outlets in the Mainland, if their products include books, newspapers, magazines, pharmaceutical products, pesticides, mulching film, chemical fertilizers, staple foods, vegetable oil, edible sugar and cotton, and if the above products come from different brands and suppliers, Macao service suppliers are allowed to be majority shareholders.  However, the proportion of their shareholdings must not exceed 65%. If the products are motor vehicles, Macao service suppliers are allowed to be majority shareholders, with the proportion of their shareholdings not exceeding 65 %. (The requirement on the proportion of investment has been cancelled since 11 December 2006).

 What are the effects of the Measures on the Administration of Foreign-invested Commercial Enterprises issued by the Ministry of Commerce of the People’s Republic of China on the development of wholesale and retail companies in the Mainland under “CEPA”?

• This Measures, which cancelled the previous requirements of “CEPA” concerning sales volume and capital volume for wholesale and retail enterprises, were officially implemented on 1^st June, 2004. According to the Company Law of the People's Republic of China, the minimum registered capital for a limited liability company is now RMB 30,000 and the minimum registered capital for a joint-stock limited company is now RMB 5,000,000. The proportion between the registered capital and total amount of investment should comply with the “Provisions of the State Administration for Industry and Commerce on the Proportion of Registered Capital and Total Amount of Investment of Sino-foreign Equity Joint Ventures”;
• Macao companies can take advantage of the concessions granted under “CEPA”. After obtaining the Macao Service Supplier Certificates, they may enter the Mainland market half a year earlier than other foreign investors.
• From 11^th December, 2004, Macao companies are no longer required to apply for the Macao Service Supplier Certificates for entering the distribution services sector in Mainland.

For the relevant laws and regulations, please visit: http://www.mofcom.gov.cn/aarticle/bg/200508/20050800269266.html

If Macao companies plan to engage in the sales of motor vehicles in the Mainland, what criteria should they fulfill?

• According to Annex 4 to “CEPA” about distribution services, Macao service suppliers are allowed to set up wholly-owned retail enterprises in the Mainland for the sales of motor vehicles.
• Macao service suppliers that have established over 30 outlets in the Mainland, if their products are of different brands and come from suppliers, Macao service suppliers are allowed to be majority shareholders, with the proportion of their shareholdings not exceeding 51 %. (The requirement on the proportion of investment has been cancelled since 11 December 2006).

 In Annex 4 to “CEPA”, how is the “value of a company’s assets” defined?

• “CEPA” does not define the value of a company’s assets.  Generally speaking, assets of Macao enterprises should be calculated in accordance with general accounting principles. Article 56 to Article 58 in the “Commercial Code” of Macao SAR govern balance sheets of enterprises.
• “Accounting System for Enterprises”, “Regulations on Financial Accounting Report of an Enterprise” and “The General Rules Governing Enterprise Financial Affairs” of Mainland regulate and define all kinds of relevant assets. In “Accounting Systems for Enterprises”, assets are defined as resources controlled or owned by enterprises as a result of past transactions or events and from which future economic benefits may be generated. Depending on the liquidity, assets can be classified into current assets, long-term investments, fixed assets, intangible assets and other assets.
• For more details about the definition of assets in “Accounting System for Enterprises”, please refer to the website of the Ministry of Finance of the P.R.C.
  http://www.mof.gov.cn/news/20050304_1900_5483.htm

 What are the procedures for importing jewelry into Mainland?

• When importing jewelry, gold retailers should import the goods through a designated unit that has been approved by the People's Bank of China.
• When operating gold retail services, Macao companies should obtain the “Certificate of Authorization for Trade in Gold Products” issued by a local branch of the People’s Bank of China. Afterwards, local departments of Administration for Industry and Commerce will handle license application, and tax and other registrations at sight of the certificate.
• For the relevant laws, please refer to:
  • “Circular for Relevant Issues in Relation to the Retailing of Gold and Gold Products”
    http://www.lawbook.com.cn/law/law_view.asp?id=16466
  • “Regulations of The People's Republic of China on the Administration of Gold And Silver”
    http://www.lawbook.com.cn/law/law_view.asp?id=2636
  • “Detailed Rules for The Implementation of “Regulations of The People's Republic of China on the Administration of Gold And Silver”
    http://www.lawbook.com.cn/law/law_view.asp?id=2769

What kind of benefits did the Measures on the Administration of Foreign-invested Commercial Enterprises bring about to Macao enterprises after it came into effect?

The Measures on the Administration of Foreign-invested Commercial Enterprises has lowered the market access thresholds for companies engaging in distribution services, cancelled the requirements on sales volume and capital volume, and also relaxed the requirements on registered capital. Macao service suppliers can establish wholly owned business enterprises six months earlier than other foreign business enterprises. Since 11 December 2004, Macao enterprises have been able to establish commercial enterprises in the Mainland without submitting the Macao Service Supplier Certificate.

What is the registered capital requirement for establishing retail enterprises in Guangzhou?

According to the “Company Law” of the People's Republic of China (revised in 2005), the requirements on registered capital for investing on commercial enterprises are:

• For retail enterprises --- RMB 30,000
• For distribution enterprises --- RMB 30,000

 Is the number of retail outlets that are allowed to open in Guangzhou restricted?

According to the “Measures on the Administration of Foreign-invested Commercial Enterprises”, foreign invested commercial enterprises that have been applied for establishment can submit applications for opening outlets at the same time.  The number of the outlets is not limited at the stage. However, since provincial departments of Foreign Trade and Commerce are delegated by the Ministry of Commerce of the People’s Republic of China to examine relevant applications, competence of application examination will be defined by the number of outlets to be opened. 

How do we apply for operation of gold product retail services in Mainland?

An approval system is used for examining the operation of gold product retail services in the Mainland, and the People’s Bank of China is designated as the competent government department overseeing the sector. Applicant companies should obtain approval from local branch of People’s Bank of China and the “Certificate of Authorization for Trade in Gold Products”.  Afterwards, they can apply for operation licenses to local departments of Industrial and Commercial Administration and proceed with relevant tax registration and consumption tax verification with local Administration of Taxation.

 What is the registered capital requirement for establishing a gold product retail enterprise in the Mainland? Are there any specific laws and regulations governing the sector?

The principal laws and regulations regulating the market include the “Circular for Relevant Issues in Relation to the Retailing of Gold and Gold Products”, “Regulations of The People's Republic of China on the Administration of Gold And Silver”.  According to paragraph 4 of Article 3 in the “Circular”, the registered capital required for retail outlets of gold products should not be less than RMB 1,000,000. The capital requirements for large and middle scale shopping malls that operate gold product retailing should not be lower than RMB 5,000,000.

Are there any restrictions on establishing individually owned stores in Mainland?

• According to “CEPA”, Macao permanent residents with Chinese citizenship are allowed to set up, in accordance with the relevant Mainland laws, regulations and administrative regulations, individually owned stores in all provinces, autonomous regions and municipalities directly under the Central Government in the Mainland without being subject to the approval procedures applicable to foreign investments, excluding franchising operation.
• No more than 8 persons should be engaged in the operation of the individually owned stores.
• The type of services includes: retail services (excluding tobacco); food and beverage services; hair dressing, beauty treatment and health care services, bathing services and home electrical appliance and other daily necessities repair services, import and export of goods and technologies; photography and photographic processing services, washing, cleaning and dyeing services, repair and maintenance of motor vehicles and motorcycles (the business area of such stores should not exceed 300 square meters), crop cultivation, animal husbandry, aquaculture, computer repair services, technology exchange and promotion services.

 What are the market access criteria for Macao residents establishing individually owned stores in the Guangdong Province?

According to Annex 4 to “CEPA”, Macao residents can directly apply to the local departments of Administration of Industry and Commerce.  The addresses and contact numbers of  Administration of Industry and Commerce in the Guangdong Province are available at:  (http://www.gdgs.gov.cn/gsglxx/cepazl/index.htm)

Are there any requirements on minimum registered capital for Macao residents establishing individually owned stores in the Guangdong Province?

• There are no legal requirements on reporting of registered capital. Upon registration for establishing individually owned stores, storeowners should declare the amount of capital voluntarily.
• However, during the process of examination, local Administration for Industry and Commerce will verify the production and operation capabilities of the stores according to the information submitted.

Please provide relevant information for establishing wholly-owned foreign trading companies in the Mainland.

According to Annex 4 to CEPA, to establish wholly-owned foreign trading companies, applicants must comply with the following conditions:

• The average annual trade value of a Macao Service Supplier with the Mainland in the preceding 3 years must not be less than US$10,000,000; for setting up an foreign trading company in the Central and Western Regions, the average annual trade value of a Macao Service Supplier with the Mainland in the preceding 3 years is not less than US$5,000,000;
• The minimum registered capital requirement for setting up a company in the Mainland is RMB 20,000,000.  To set up a foreign trading company in the Central and Western Regions, the minimum registered capital requirement is RMB 10,000,000.

When establishing foreign trading companies in the Mainland, applicants must obtain approval from The Ministry of Commerce of the People’s Republic of China. Macao enterprises may apply to local departments of Foreign Trade and Economic Cooperation.

For detailed information, please refer to the “CEPA Laws and Regulation – Laws and Regulations for Foreign Companies Investing in the Mainland” webpage of Macao Economic Services website: (http://www.economia.gov.mo/web/DSE/public?_nfpb=true&_pageLabel=Pg_CEPA_MLRN&locale=zh_MO)

Is Macao Service Supplier Certificate required for operating retail enterprises in the form of individually owned stores?

Applicants do not need to apply for the Macao Service Supplier Certificate from Macao Economic Services. However, they need to apply for an identification certificate from Macao Identification Bureau.  Applicants can then apply to local Administration of Industry and Commerce, together with the verified identification certificates, for establishing individual stores.

Please provide relevant information for establishing individually owned stores in the Mainland.

For relevant information, please visit the website of the Administration of Industry and Commerce of the Guangdong Province (Guangdong Industry and Commerce Red Shield) website at: http://www.gdgs.gov.cn/ and its  “CEPA” dedicated webpage at: http://www.gdgs.gov.cn/gsglxx/cepazl/index.htm.

Do Macao SAR Passport-holders need to apply for identification documents from Macao Identification Bureau?

All Macao SAR Passport-holders are recognized as Macao residents with Chinese residency. Besides, Annex 2 of the “Opinions on the Administration of Individual Owned Stores Registration” published in November, 2004 by the State Administration for Industry and Commerce explained that, when establishing individually owned stores, Macao residents are only required to submit a copy of the Macao SAR Passport or the identification certificates issued by Macao Identification Bureau .

Why is the identification certificate required for establishing Individually Owned Stores in the Mainland?

Since the nationality of the ID card holder is not shown at the back of the Macao Permanent Identity Card or Macao Identity Card, Macao ID cardholders are required to submit a copy of their Macao SAR Passport or to apply for the identification certificate issued by Macao Identity Bureau for confirming their Chinese nationality.

What are the procedures for establishing individually owned stores in the Mainland?

Applicants should submit applications, together with the required documents, to the local Administration for Industry and Commerce. If the businesses in which they are to operate involve preliminary approval, applicants should also carry out relevant application procedures with local authorities. If applicants engage in food and beverage retailing, restaurants, hair dressing, beauty treatment and health care services, or bathing services, they should also apply for the “Hygiene Permit” from local departments of Health Administration in the Mainland.

In “CEPA”, besides the total assets requirements for providing banking services, is there any requirement on the years of operation for the applicant financial institutes?

Macao banks must comply with the “Macao Financial System Act” of the Macao Special Administrative Region and have engaged in substantive operation for 5 years or more (including 5 years). Furthermore, annual reports or financial statements, proof of payment of complementary tax and documents of other tax payment in the last 5 years should be submitted for approval.

After the signing of “CEPA”, will the Mainland adjust the “Withholding tax”?

For service sectors that have not been opened or are not covered by “CEPA”, all the administrative procedures will remain the same as stipulated in relevant Mainland regulations and will not subject to any changes or adjustment after CEPA was signed.

How can Macao Insurance professionals be benefited by the preferential treatments under “CEPA”?

Macao residents who have obtained Mainland insurance qualifications and are employed or appointed by a Mainland insurance institution can engage in the respective insurance business. The mentioned "insurance qualifications" refer to the respective qualifications for insurance agents, insurance brokers and loss adjustors in the Mainland. Besides, Macao residents with Chinese citizenship, after obtaining the Mainland's professional qualifications in actuarial science, can practice in the Mainland without prior approval.

The relevant responsible department in China is the Insurance Regulatory Commission. Those who are interested in obtaining the insurance qualifications from the PRC can visit the website at: http://www.circ.gov.cn/

Macao tourism enterprises are permitted to establish joint-venture travel agencies with Mainland enterprises (with Mainland shareholders holding majority shares) without any geographical restrictions.  Is it true that the Mainland partners’ shareholding should be more than 51% in the joint ventures?

“CEPA” does not define specifically on this matter.  Generally, majority shareholding refers to shareholding of more than 51%.

Are there any preferential treatments for the restaurant industry under “CEPA”?

“CEPA” allows Macao service suppliers to operate hotels, apartment buildings and restaurant establishments, on a wholly-owned basis in the Mainland. However, Macao companies should conform to the qualification requirements on Macao service suppliers and obtain Macao Service Supplier Certificates.

In Annex 4 to “CEPA”, what is the corresponding CPC code for transport services?

For detailed information, please visit the website of the United Nations Provisional Central Product Classification at: http://unstats.un.org/unsd/cr/registry/regcst.asp?Cl=9&Lg=1

How long should a logistics enterprise has operated in Macao so as to be recognized as a Macao Service Supplier?

According to “CEPA”, logistics enterprises should be in substantial operation for 3 years or more. The period of 3 years should be calculated from the date on which the company registered and formally commenced substantive operation. Therefore, applicants should submit a copy of the “Certificate of Business and Vehicles Registration”, a copy of “M/1 Industrial Tax Declaration Form”, and other information for approval.

If two Macao logistic companies merge, but the services provided by the two companies are different, how will the period of substantive operation be calculated?

• Macao service suppliers are required to engage in substantive operation for 3 years or more prior to entering the Mainland. Even if the two enterprises merge, and the services they offer are different, after the merge, the scope of the services provided and the period of operation of the merged enterprise must still conform to the regulation.
• Since each application is different, Macao Economic Services will be flexible in evaluating the situation of the enterprise and the information submitted.

How is the ‘Central and Western Regions in the Mainland’ is referring to for the transport service sector?

According to Annex 4 to “CEPA”:

• The Western Region refers to 12 Provinces/Autonomous Regions/Municipalities, namely Chongqing, Sichuan, Guizhou, Yunnan, Tibet, Shaanxi, Gansu, Qinghai, Ningxia, Xinjiang, Inner Mongolia, and Guangxi; Xianxi Tugia-Miao Autonomous Prefecture of Hunan Province, Enshi Tugia-Miao Autonomous Prefecture of Hubei Province, and Yanbian Korean Autonomous Prefecture of Jilin Province.
• Central Region refers to 8 Provinces, namely Heilongjiang, Jilin, Shanxi, Henan, Hubei, Hunan, Anhui and Jiangxi.

According to the market opening measures for transport services under “CEPA”, Macao service suppliers are allowed to set up wholly-owned enterprises in the Mainland to provide direct non-stop road freight transport services between Macao and individual provinces in the Mainland.  Is it required that the vehicles used for the “direct non-stop road freight transport” services obtain licenses from both Macao and the Mainland?

According to relevant laws and regulations on both sides, motor vehicles traveling between Macao and the Mainland must have valid licenses issued by the authorities from both sides.  In this regard, all relevant issues that have not been regulated in “CEPA” should be handled in accordance with the current laws and regulations.

Can the air transport service sector enjoy the benefits of  “CEPA”? How can enterprises in the air transport sector be recognized as Macao Service Suppliers and what are the application procedures?

“CEPA” allows：

• Macao service suppliers to provide, in the form of cross-border supply, contractual joint venture, equity joint venture or wholly-owned operations, contract management services for small and medium airports. The validity period of the contract must not exceed 20 years.
• Macao service suppliers to provide, in the form of cross-border supply, consumption abroad, contractual joint ventures, equity joint ventures or wholly-owned operations, as well as airport management training and consultancy services.
• Macao service suppliers to provide, in the form of equity joint ventures or wholly-owned operations, the following seven types of air transport ground services as an agency in the Mainland, namely, agency services, loading and unloading control, communication, and departure control system services, unit load devices management services, passenger and baggage services, cargo and mail services, ramp services and aircraft services.
• When Macao service suppliers establish wholly-owned, equity joint venture or contractual joint venture air transport sales agency companies, the registered capital requirement is the same as those of Mainland companies.

Furthermore, for being recognized as Macao Service Suppliers (Juristic Persons), applicant companies should conform to the regulations set out in Article 3 of Annex 5 to “CEPA”.

What is the content of liberalization for logistics services in “CEPA”?

Annex 4 to “CEPA” has made the following concessions for logistics services: “Macao suppliers can provide, in the form of wholly-owned operations, logistics services in the Mainland, which include road transport, storage and warehousing, loading and unloading, value adding processing, packaging, delivery and related information and consultancy services for ordinary road freight; freight transport agency services within the Mainland, and the management and operation of logistics services through computer network”

When applying for Macau Service Supplier Certificate for providing transportation, logistics, warehousing, freight forwarders services at the same time, can applicant company submit one application form?

Applicants may submit one application form, but it should be attached with relevant documents and identity card copies of all the shareholders on business registration. Furthermore, applicants should also submit notarized declarations of which the number should correspond with that of the Macao Service Supplier Certificates applied.

How much is the minimum registered capital for freight forwarding services in the Pearl River Delta region? Will the amount be different if the investments are made in different regions in Mainland?

According to the provisions in “CEPA” and the regulations in the “Measures for the Administration of Foreign-funded International Freight Forwarding Enterprises”, the minimum registered capital requirements are:

• international sea freight forwarding agency — RMB 5,000,000.
• international air freight forwarding agency — RMB 3,000,000.
• international land freight forwarding agency — RMB 2,000,000.
• For very branch established, RMB 500,000 must be injected to the registered capital of the parent company.

What are the criteria (such as registered capital) for establishing a logistics enterprise in the Mainland?

According to the “Circular on Relevant Issues Concerning the Experimental Establishment of Logistics Enterprises with Foreign Investment”, registered capital should not be lower than USD 5,000,000. Also for a foreign-invested logistics enterprise engaging in international circulation logistics, the shareholding of overseas investors should not exceed 50%

When freight-forwarding agencies are established in the Mainland, what is the scope of business allowed for cooperating with other foreign regions?

The establishment of freight-forwarding businesses between the Mainland and other foreign regions should be handled in accordance with relevant regulations governing international forwarding agency services. International freight forwarding agency services are defined as international freight forwarding and relevant services provided for the consignors in the consignors' name or in the service provider’s own name upon commission of the consignees or consignors of the imported and exported goods, and collects remunerations for the services provided. The range of services include: shipping undertaking, booking, storage, cargo's transit, cargo loading/unloading, clearance of transport fees, custom declaration/clearance, cargo insurance services, related short-distance transportation services and transportation consulting services.

Are Macao freight forwarding agency enterprises allowed under CEPA to establish one or more branches at the same time after they have paid up the registered capital?

After “CEPA” II has come into effect, freight forwarding agencies in the Mainland established by Macao service suppliers are allowed to set up branches upon paying up the required registered capital (instead of waiting for 1 year after the establishment of the agencies).        For very branch established, RMB 500,000 must be injected to the registered capital of the parent company. Also, the scope of the services offered by the branches should be within that of the parent company, and the branches do not have the legal status of “juridical persons”.

What does the “Issuance of Transport Documents” as mentioned in the “Detailed Rules for the Implementation of the Administration on the International Freight Forwarding Agencies of the People’s Republic of China” refer to?

“Transport documents” refer to:

1. Types of shipping documents

   (1) export bill of lading or bill of lading

   (2) bill of clearance for exportation or shipper’s description of goods for exportation

   (3) shipper’s export declaration

2. Types of Transportation documents

   (1) ocean bill of lading

   (2) booking changes

   (3) railway bill

   (4) cargo manifest

   (5) land ridge transport receipt

   (6) airway bill of lading

   (7) parcel post receipt

Which Mainland department is responsible for examining the application of establishing advertising enterprise?

When establishing wholly-owned advertising enterprise, the applicant company should submit project proposal and feasibility study to the State Administration for Industry and Commerce and Memorandum of the Company to the Ministry of Commerce of the People’s Republic of China for approval.

Through the preferential treatments under “CEPA”, can Macao companies establish branches in the Mainland to provide advertising services for mainland products?  Can the relevant advertisements be produced and broadcasted in Macao?

According to the United Nations Central Product Classification, (CPC), the advertising services under CEPA is classified under CPC871.  The scope of services includes:

8711 – Sale or rental service of the advertising time and space
8712 – Advertising planning, production and service arrangement
8713 – Other advertising services

According to the CPC, the branches mentioned above is not considered advertising companies. Thus, it cannot enjoy the preferential treatments conceded under CEPA.

Is a person providing management consultancy services in the Mainland as a natural person required to apply for the Macao Service Supplier Certificate?

Natural persons do not need to apply for the Macao Service Supplier Certificate. They only need to submit identification documents and other relevant application documents to Mainland authorities for approval.

Which Mainland department examines the applications for establishing management consultancy enterprises?

The Mainland adopts a hierarchical management system for administering the establishment of management consulting enterprises. More specifically, provincial and municipal authorities are delegated to approve the contracts and memorandums of the companies to be established at their discretion, after reporting to the Ministry of Foreign Trade and Commerce Cooperation.

Which Mainland department examines the applications for establishing convention and exhibition enterprises?

The competent department for approving the contracts and memorandums of the companies in the convention and exhibition services sector is the provincial departments of Foreign Trade and Commerce Cooperation.

Can Macao job referral agencies offer intermediary services for Mainland residents working in Macao?

Macao service suppliers should first apply for establishing job referral agencies in the Mainland according to the relevant Mainland regulations, and state the scope of services they plan to provide in their applications and memorandums of the companies, which will later be submitted to the relevant departments of Labor and Social Security for approval.  After approved, Macao Service Suppliers may apply to Macao Labour Affairs Bureau for providing relevant job referral services, together with the approval documents or authorization letters issued by the mentioned Mainland authorities.

What is the “Internet Culture Business Operator” referred to?

According to article 4 of the “Interim Provisions on Administration of Internet Culture”, an “Internet Culture Business Operator” is an Internet information service supplier who engages in Internet cultural activities and has obtained approval from the departments of cultural administration and organizations of telecommunications management. For detailed information, please visit the website of the Ministry of Culture of the People’s Republic of China. (http://www.ccnt.gov.cn/)