Macao Business Environment
Macao is a free and open service-orientated economy. Though limited by size and population, it possesses sophisticated infrastructure facilities, a simple and low taxation regime with corporate and individual tax rate of not more than 12%, making it one of the areas with the lowest taxation rates in the region. Its advantage as a free port and a separate customs territory, the implementation of the Mainland and Macao Closer Economic Partnership Agreement (CEPA), as well as the free flow of capital and no foreign exchange control, Macao has been rated by the World Trade Organisation (WTO) as one of the most open trade and investment economies in the world for years. According to the 2015 Report on the Index of Economic Freedom jointly released by the Heritage Foundation and the Wall Street Journal of the United States, has rated Macao as the 34th freest among 178 economies worldwide and the city also ranks ninth in the Asia-Pacific region. Macao was also rated eighth among the “Asia-Pacific cities of the Future 2015-16 – FDI Strategy” in December 2015 by fDi Magazine.
Macao currently maintains business relationships with over 100 countries around the world and is affiliated to over 50 international organisations, with particularly close relations with Portuguese-speaking Countries. Commercial activities are carried out in accordance with international practices, thus providing an ideal environment for investors choosing Macao to develop their businesses. After the handover, there have been constant improvements in the business environment with accelerated development, its role as a regional business and trade service platform, particularly a business and trade co-operation service platform between China and Portuguese-speaking Countries has become increasingly important.
Macao’s economy has registered a stable growth since 1999. The average annual GDP growth rate from US$6 billion before the handover to US$55.4 billion in 2014, tourist numbers have grown from 7.4 million in 1999 to an annual average of more than 30 million in recent years. Conventions and exhibitions have increased from over 250 events in 2001 to more than 1,000 events annually in recent years.
Over the past two years, under the impact of various internal and external factors, Macao’s economy is facing a “new normal” situation, transitioning from relatively high speed growth to a stage of economic adjustment. With the unfailing effort of the SAR Government and members of society, the city is still experiencing s steady and orderly development with an overall unemployment rate of 1.9% which remains relatively low.
Following the further liberalisation of CEPA and the implementation of the Pan-Pearl River Delta Regional Co-operation Framework Agreement and the Outline of the Plan for the Reform and Development of the Pearl River Delta, as well as the signing of the Framework Agreement on Co-operation Between Guangdong and Macao, particularly the promulgation of the establishment of the Framework Plan for China (Guangdong) Pilot Free Trade Zone and the General Plan for the Reform and Innovative Development of Hengqin Area of Zhuhai of China (Guangdong) Pilot Free Trade Zone in 2015, economic integration between Macao and the Mainland will be further deepened and closer co-operation between Guangdong province, Hong Kong and Macao will be promoted. Followed by the completion of various major transportation infrastructure facilities such as the Hong Kong-Zhuhai-Macao Bridge, the new Guangdong-Macao cross-boundary checkpoint, as well as the light rapid transit system, Macao’s investment environment will be further enhanced. Taking the Hong Kong-Zhuhai-Macao Bridge as an example, there will be a direct link to the restricted area of the Hong Kong International Airport. It will only take around 30 minutes to drive for incoming visitors to Macao, providing great facilitation to tourists and trade visitors, strengthening regional liaisons, promoting interaction between trade visitors and enhancing regional co-operation.
The Outline of the 12th Five-Year Plan for the National Economic and Social Development of the People’s Republic of China supports Macao’s development into a World Tourism and Leisure Centre and will accelerate its development as an economic and trade co-operation platform for China and Portuguese-speaking Countries. It supports Macao’s development of moderate economic diversification; accelerates the growth of industries such as leisure tourism, convention and exhibition, Traditional Chinese Medicine (TCM), education services, as well as the cultural and creative industry, thus providing a solid foundation for Macao’s long-term prosperity and stability, as well as sustainable economic growth.
Currently, development of the three centres, namely a commercial and trade service centre for SMEs of PSCs, a food product distribution centre for PSCs, a centre for conventions and exhibitions for economic and trade co-operation between China and PSCs are in progress, the Economic & Trade Co-operation and Human Resources Portal between China and Portuguese-speaking Countries (the Portal) launched in April 2015 are constantly being enhanced. Online resources such as information on PSCs’ food suppliers and bilingual professionals are regularly updated and a venue for the food product distribution centre for PSCs will be set up soon.
Being a regional trade and economic service platform, Macao is capitalising the advantage of “leveraging on the Mainland, engaging ourselves globally”, and seizing the opportunities brought about by the implementation of the national “Belt and Road” initiative, the 13th Five-year Plan, free trade zones, “Internet+” as well as cross-boundary E-commerce. Macao strives to make full use of its role in the region and aims for better development through constant improvements.
In December 2015, on the eve of the 16th anniversary of the handover of Macao’s sovereignty, the State Council executive meeting promulgated “the map of the administrative division of the Macao Special Administrative Region of the People’s Republic of China” and has adjusted the land and sea boundaries of the Macao SAR and explicitly states that the Macao SAR government is responsible for the management of 85 square km of marine area, resulting in a three-fold increase in Macao SAR’s total area from the original 30 square km. It provides greater potential for promoting the development of moderate economic diversification and provides necessary requirements and support for Macao’s participation in the development of the Maritime Silk Road. It also plays a vital role in Macao’s development of a marine economy, and will also help to attract more ocean-themed exhibitions to be organised in Macao and create more opportunities for the city.
Macao adheres to the free port policy and market economy system. Procedures for investment and company formation are relatively simple and the same procedures apply to both local and overseas investors. IPIM provides a “One-stop service” to assist investors in handling the relevant administrative procedures. IPIM is always at your service and enterprises from overseas are always welcome to invest in the city and Macao will endeavour to provide high quality and efficient services to foreign and Mainland enterprises, and assist investors to explore business openings and obtain mutually inclusive benefits.
Macao’s major statistical information
Source: Statistics and Census Service, Macao SAR Government