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A Special International Report Prepared by
The Washington Times Advertising Department - Published on October 25, 1999
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Advertisers
(1) Macau Trade & Investment Promotion Institute
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No one denies that Macau's strategic position in the Pearl River Delta, as a special gateway to China deserves more notice. The territory's growth over the past 20 years has been remarkable and is most evident in the numerous completed infrastructures. Because of Macau's close proximity to both China and the busy financial center of Hong Kong, Macau does offer a unique opportunity for foreign investors. "We are most hopeful that Macau's economy will diversify and prosper in the approaching transition. Our association's purpose is to promote and develop the industries of Macau. This year marks our 40th anniversary and we are planning a series of celebrations," exclaimed Leung Sung, president of the Macau Industrial Association. Macau's industrial circle is now actively calling for the government and the business community to promote the necessary upgrading and promotion of the manufacturing industry. Subsequently, the territory's Portuguese administration and the active Chinese business community are making Macau a very attractive environment for outside investment.
Macau becomes a Special Administrative Region (S.A.R.) of the People's Republic of China on December 20, 1999. The territory will enjoy the same high degree of autonomy with independent judiciary, making it another example of "one country, two systems" in practice following the smooth transition of Hong Kong S.A.R. in 1997. Also, Dr. Jorge Rangel, Secretary for Administraton, Education and Youth Affairs remains bullish about the human resources available in Macau. "We have invested in our educational school system in Macau and are preparing our youth for tomorrow' s challenges and opportunities," remarked Rangel in a recent interview. In addition to an available and educated labor pool, the prospective investor will discover that there are no restrictions whatsoever on setting up foreign-owned or foreign-managed companies in Macau. Furthermore, according to the Macau Trade & Investment Promotion Institute (IPIM) there are clear advantages for a company to set up operations in Macau.
Macau has offered or encouraged tax incentives to those investors in higher-value-added and medium-scale industrial units, that are less labor-intensive and resort to higher technologies. Favorable tax incentives apply to all new industries. Corporate profits are subject to a maximum rate of 15 percent; most imports are tax free; no restrictions on profit reparation; property tax is exempted if the building is used for industrial purposes and other facilities are available, too. "The government has made Macau a very attractive investment environment. Our Concordia Industrial Park continues to attract international companies, including a Japanese company making fiberglass sheets used in circuit boards," added Rodrigo Brum, executive director of Concordia. The Basic Law also expressly consecrates the application in Macau of the United Nations Pact on Civil and Political Rights and Economic, Social and Cultural Rights after 1999. These international conventions bind Macau to international bodies and protect it through multilateral legal instruments. "The legal system here is excellent and we will continue to maintain our practice and even hope to expand it since we also have Chinese partners in our firm," added Frederico Rato, senior partner of the Macau based law firm, Goncalves, Pereira, Rato, Ling, Vong and Cunha. Macau has also signed various international agreements in the areas of civil aviation, postal and telecommunications services, author's rights, industrial property, the international organization of labor, drug enforcement, judicial cooperation and human rights. With competition heating up in the Southeast Asia region and with the new millennium approaching, this territory, Macau believes that it can capture a share of the market by exporting more of its services, rather than just goods. It is strategically located to assist China in its development because of its proximity to Zhuhai and also Guangdong. The money, financial exchange and insurance markets are all overseen by the Macau Monetary and Exchange Authority, which operates in a role similar to a central bank. This enclave authority keeps a watchful eye on the overall stability of Macau's financial system. Furthermore, the financial system, comprised of local banks and branch offices of large foreign banks, has rapid and direct links with the global community, while the free movement of capital allows room to set exchange and interest rates. "Macau also has an exceptional liberal financial market with no exchange controls," remarked Joao F. Teixeira de Abreu, executive director of Banco Comercial de Macau. There are now over 24 licensed banks, most of them foreign, including several with international branch networks. Additionally, a new banking ordinance came into force in 1993, setting up a modern safe and competitive banking system, able to support the Territory's economic activities and promoting regional cooperation. Also, Macau's government grants land concessions from implementation of projects with relevant economic interest, as well as, interest relief on loans for purchase or construction of new industrial premises, and for equipment acquisition. Finally, incentives are given to entrepreneurs as fiscal benefits for certain industries including tax exemption and reduction up to ten years. With the approaching handover, Macau's economic relationship with China is changing and a new and expanded relationship, both competitive and complementary, emerges. |
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(1) Betting on the future with China |
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Macau's Portuguese administration along with many Chinese business leaders have trumpeted numerous reasons for investment in Macau. With China just across the border, any direct investment in Macau is an investment in the world's largest market.
As a result, the government has maintained a focus on upgrading Macau's traditional sectors and opening up less labor-intensive and higher value-added productions, while at the same time strengthening the service industry.
"Of course, we believe that Macau offers an excellent investment environment and also think Macau will offer even more opportunities after the handover," says Lourenco Cheong, executive director of the Macau Trade & Investment Promotion Institute.