Macao Business Environment
Macao is a highly open city of commerce and trade. It has a strategic location and well developed infrastructure. Being a free port as a separate tariff region, not only raw materials and capital goods are free from import tariff, but also there is no restriction on foreign exchange and movement of capital. Macao also has a highly attractive fiscal system with very low levels of taxation. Tax levied on corporate profits does not exceed 15%, which is the lowest in the region. Macao SAR Government is considering lowering taxes further this year. Foreign enterprises can enjoy tax incentives while setting up back or regional offices here. With these advantages in a competitive business environment, Macao has been functioning as a bridge to facilitate regional economic co-operation.
Since the return of sovereignty to China, Macao's government has devoted its efforts in perfecting the business environment. Macao's trade and investment regime was appraised by the WTO's as ?§remains among the most open in the world.?¨ in its second trade policy review of Macau, China. In 2003, Moody's Investors Service has recently upgraded Macao's credit rating from Baa1 in the past to A3 early in the year, and to A1 later. In the "Report on Competitiveness of Chinese Cities 2003", Macao is ranked the seventh, reflecting a positive appraisal and recognition from the outside in general.
The SAR Government has clearly defined its strategy for economic development: with gaming and tourism as the leading sector, other service sectors as the backbone, to oversee co-ordinated development of other industries, and to build Macao into a tourism gaming centre, a MICE centre and a trading service centre with Asian characteristics. Furthermore, due to the particular advantages and characteristic of Macao's economy, the Government is striving to construct Macao into a business service platform in three aspects, n amely the Service Platform for the Economic Co-operation between China and Portuguese Speaking Countries, the Economic Co-operation Platform for Western-Guangdong, and the Global Chinese Entrepreneurs Networking and Co-operation Platform. Therefore, the Government will continue to improve the business environment and reinforce its external relations and co-operations.
With a population of only 0.44 million, Macao received a record breaking number (11.89 million) of visitors in 2003. Despite the outbreak of SARS throughout the region in that year, there was still a 3.1% growth in visitor numbers compared to the previous year. After the liberalisation of the gaming industry, the three concessionaires, namely Sociedade de Jogos de Macau (Macau Gaming Company Ltd), Wynn Resorts (Macau) Ltd and Galaxy Casino Company Ltd, all together promised to invest a total about USD 2.2 billion in various facilities. It is expected that new hotels, casinos and entertainment facilities will be gradually put into use. In the first three quarters of 2003, GDP grew 13.4%; the number of new start-up companies increased by 34.5%, of which foreign owned companies increased by 46.5%. Hence, economic growth in 2004 is expected to maintain high.
Mainland and Macao Closer Economic Partnership Arrangement(CEPA) signed in last October and taking effect from Jan 1 this year will further promote economic and trade co-operation and development between the two sides on the previous basis. CEPA is composed of three main areas, Trade in Goods, Trade in Services, and Trade and Investment Facilitation. Enterprises can make use of CEPA, by producing goods in Macao or by co-operating with Macao enterprises, to explore a wider Mainland China market or penetrate into overseas market, like the Portuguese speaking markets. The Portuguese speaking countries, eight in all, spread over four continents and have a total population of 20 million. Although most of them are developing countries, but rich in natural resources, they are mostly markets of great potentials. The first Forum for Economic and Trade Co-operation between China and Portuguese-Speaking Countries was held successfully in Macao last October, hosted by the Central People's Government and co-ordinated by Macao SAR Government. The "Economic And Trade Co-operation Action Plan" signed at the ministerial level established the direction for future co-operations in many areas. It was also decided to hold the second Forum in Macao in 2006 and relevant follow-up works were to be handled by a permanent s ecretariat office in Macao. The Forum strengthened Macao's role as the Service Platform for the Economic Co-operation between China and Portuguese Speaking Countries.
Besides, while maintaining a close links with overseas Chinese entrepreneurs, Macao is the place where many activities related to overseas Chinese entrepreneurs co-operation, providing exchange opportunities between Mainland China entrepreneurs, overseas Chinese entrepreneurs and entrepreneurs in Taiwan. In addition, Taiwanese passengers do not need a visa to enter Maca o and can enjoy ?§one flight to the destination?¨ service to places on Mainland China via Macao. Nowadays, there are 46 flights between Macao and Taiwan. In 2002, the Cross-Strait Association set up an office in Macao to provide co-ordination and enquiry services related to exchange and economic co-operation across the Taiwan Strait .
Enhancing external economic co-operation is fundamental to Macao's de velopment. The three business platforms will be well formed in Macao, to provide high quality platform-services to all investors.