Macau is a city located on the southern coast of China at the south of Guangdong province. It is situated just about 60 km west of Hong Kong and 145 km southwest of Guangzhou. It has a humid subtropical climate and relies on the freshwater supply of Xijang River. It has a stable company and a good infrastructure.
Macau’s SAR Offshore Law has been in effect since the first of November 1999. It is the Macau Monetary Authority which regulates the offshore business in the city. On the other hand, it is the Macao Trade and Investment Promotion Institution which regulates and supervises the offshore non-finance business.
Requirements for Operating Offshore Service Business
Any investor who wishes to put up an offshore company in Hong Kong must first obtain an approval from the IPIM. There are some rules which investors must abide by in order to be eligible for operation.
- To target only non-Macao residents as customers
- To use only non-Macao currency in all activities
- To focus on non-Macao markets
It is a must for investors to register an offshore company according to the commercial laws of the Macao SAR. The names of offshore institutions must include the phrases “Macao Offshore Commercial” or “Macao Offshore Auxiliary”.
Tax Incentive for Offshore Companies
In Macau, any offshore institution is exempted from the following taxes:
- Income tax
- Industrial tax
- Stamp duties
Non-Macao residents who are employed by companies as managers and specialized technicians are exempted from salary tax for the first three years of their employment.
Setting Up an Offshore Institution
Offshore institutions can be formed as a branch or subsidiary in Macau. There are differences between the two. A subsidiary is a separate legal entity which has its own memorandum and articles of association. It has to bear its own legal liability. On the other hand, a branch is not a separate legal entity. It bears its own liability.
The minimum capital required of an offshore institution in Macau is MOP25,000. It has to have at least one director and one shareholder which can be an individual or a corporation. However, if the director is a corporation there is a need to appoint an individual to carry out the duties of a director.
Offshore Services which Can Be Operated in Macau
There are two types of offshore institutions which can be established in Macau and they are offshore auxiliary services and offshore commercial services. Some of the following services which can be offered are:
- Tests and technical analysis
- Software consultant
- Data processing
- Hardware consultant
- Research and development activities
Opportunities of doing business in Macau are widely available to foreign investors and businessmen, and many people are getting more interested about knowing the procedure of Macau company registry. Among several options, foreign business prefers doing business in Macau by selecting one among some particular options. Incorporating a company in Macau is the most common option, and many businessmen are doing business from Macau accordingly. Some other businesses prefer opening a branch of their existing business, as this is also allowed in Macau for foreign businessmen. Sole proprietorship and going for a representative office are two other common options for doing business in Macau.
Companies with different types and business are permitted to do business in Macau. As per the company incorporation act, businessmen from different industry with different company can start their own business in Macau. Unlimited liability company and individual entrepreneurs are two most common categories among some other options. Mixed liability companies by shares and quotas are also allowed to do business in Macau, as well. Limited liability company by shares, quotas and individual quotas are also permitted to do business in Macau, as well.
The first step of registering a company in Macau is to find a name for the company, which is not yet registered by some other company or business. A brief purpose and type of the business must also be declared while requesting for a company name. Next, the company must complete the draft and notarize the articles of association within two months, once the certificate is issued. Name and address of the board members and shareholders also needed to be submitted in order to register a company in Macau. A proof of acceptance of the board members must also be submitted, as it comes as part of the Macau company registration act.
Anyone can be appointed as a director, either elected or selected by the board members and this is the common norms of appointing a director according to the company incorporation act in Macau. Obviously, the director must have at least 18 years of age or above. Every company should maintain a business registry and declare some basic information about the company in public. In the case of an unlimited company in Macau, there should be at least two or more directors in that company. In the other hand, limited liability company by quotas, shares and sole owners must have at least one or more directors in order to doing business in Macau.