An Overview of Macao and Its Advantages
Macao is one of the two special administrative regions of the People’s Republic of China. In 1553, the Portuguese began to take temporary residence and conduct business in Macao. Over the next centuries, Macao became a trading hub and a centre for cultural exchange between China and the West thanks to its unique geography and historical background.
In 1987, China and Portugal signed the “Sino-Portuguese Joint Declaration”, which stated that the Government of the People’s Republic of China would re-establish sovereignty over Macao with effect from 20 December 1999.
With the successful implementation of the ‘One Country, Two Systems’, the Macao SAR has been exercising a high degree of autonomy and has enjoyed executive, legislative, and independent judiciary. Macao has preserved its social and economic characteristics as well as maintained its diverse cultural integration that has existed over the past four centuries. In Macao, different languages, values, religions, customs, and lifestyles co-exist in harmony.
Located on the south-eastern coast of China and the west bank of the Pearl River Delta, Macao is 60 km from Hong Kong and 145 km from Guangzhou, with a land area of 33 km2. To support the city’s sustainable development, the Central Government granted the sea area of the Macao SAR as 85 km2 in 2015.
Macao is equipped with a range of modern infrastructure and telecommunication networks. Its healthcare system is on par with most developed countries and regions.
Chinese and Portuguese are the official languages of Macao. Locals mostly speak Cantonese with English widely used in trade, tourism, and commerce. As of the end of 2021, Macao had a total population of around 683,000.
The Central Government has granted Macao the positions of ‘One Centre, One Platform and One Base,’ namely a ‘World Centre of Tourism and Leisure,’ a ‘China-Portuguese-speaking Countries Commercial and Trade Service Platform,’ and an ‘exchange and cooperation base with Chinese culture as its mainstream and co-existence of different cultures,’ to bolster the city’s moderate economic diversification and sustainable growth.
Macao is embracing further economic cooperation with the mainland, especially the Pan-Pearl River Delta Region, through the signing of the Closer Economic Partnership Arrangement (CEPA*) with mainland China and Hong Kong, as well as launching and implementing a series of policies such as the Pan-Pearl River Delta Regional Cooperation Framework Agreement, Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area and the Master Plan of the Development of the Guangdong-Macao In-depth Cooperation Zone in Hengqin.
The “30 specific measures on financial support for Hengqin” introduced in 2023 will facilitate the interconnectivity of the financial markets between Macao and the In-depth Cooperation Zone, foster the growth of modern finance industry for the adequate economic diversification of Macao, and provide convenience for cross-border trade, investment and financing.
Over the next decade, the gaming and tourism industries of Macao will enter a new stage of development where the six local integrated resort operators will implement various non-gaming projects. These projects will focus on ten areas including conferences and exhibitions, entertainment performances, sports events, culture and art, health preservation, and thematic amusements. Moreover, a range of high-quality events and iconic projects will be organised to raise Macao’s profile and attract international tourists.
Advantages of Macao
|One Country, Two Systems||Free Economy||Development Potential||Low and Simple Tax Regime|
|Modern Transportation and Communication||Comprehensive Social Welfare System||Harmony of Chinese and Western Cultures||Rich Cultural and Recreational Activities|
One Country, Two Systems
Macao enjoys the advantages of the ‘One Country, Two Systems’ and has a stable society with high public security. As an international city, Macao acts as a global hub for Chinese and Western cultures.
After the handover to China, Macao has maintained a high degree of autonomy with its social and economic systems remained unchanged. The Macao SAR Government can draft its laws and with active support from the Central Government.
Free Economy – Favourable Business and Investment Environment
Macao is a free trade port with an open economy that allows free inflow and outflow of capital and goods, providing favourable environment for large corporations that intend to expand their business internationally.
Since its handover to China, Macao has seen steady economic growth with a high employment rate, as well as other strong economic indicators such as number of visitors, retail sales turnover, and median earnings.
Macao has been rated by the World Trade Organization (WTO) as one of the most open trade and investment systems worldwide and enjoys the status of a free port as well as separate customs territory with a maximum profits tax of 12%.
Macao has maintained a broad network of international markets and close ties with Portuguese-speaking countries, which spread across the globe with a total population of around 290,000,000. The city is increasingly recognized and affirmed its role as a Commercial and Trade Co-operation Service Platform between China and Portuguese-speaking Countries.
Macao maintains trade and economic ties with over 100 countries and regions worldwide. It is a member of over 50 international organisations. Local business operations align with international practices. Simple investment and business procedures, as well as identical incorporation procedures for both local and overseas investors make the city a desirable business environment for investors worldwide.
The Macao SAR Government has been implementing a series of policies to encourage investments, including loan interest subsidy, financial lease rental subsidy, tax incentives and established the Investor’s One Stop Service to assist investors in completing the necessary administrative procedures.
According to Law No. 1/2021 – Tax Incentive Scheme for Science, Technology and Innovation Business, approved qualified enterprises are entitled to concessions such as stamp duty, property tax, profits tax, and salaries tax, specifically:
- Stamp duty for conveyance of immovable property: Stamp duty for conveyance of immovable property is exempted for the enterprises that have obtained an immovable property by compensated or uncompensated means for their business operation (immovable properties of residential usage are inapplicable; each applicant can enjoy exemption for one immovable property only);
- Property tax: Property tax of the immovable property concerned is exempted for a duration of five fiscal years;
- Profits tax: Enterprises are exempted from profits tax for three years from the time a declaration of taxable profits has been submitted (profits distributed by the enterprises to equity holders or dividends to shareholders also apply);
- Salaries tax: Enterprises that have recruited employees for administrative management and technological research and development are exempted from twice the amount of salaries tax for 3 years from the time of the said approval.
The Legal System for Talent Recruitment has also stipulated tax benefits for talents, including the reduction or exemption of stamp duty for property conveyance for a business establishment purchased by a professional or a company where they directly hold over 50% of the shares, or their liable urban property tax, profits tax or salaries tax.
(Economic and Technological Development Bureau: https://www.dsedt.gov.mo/en_US/web/public/pg_ii_pbdve?_refresh=true)
(Macao Trade and Investment Promotion Institute: https://www.ipim.gov.mo/en/services/one-stop-service/)
The Central Government has positioned Macao as ‘One Centre, One Platform and One Base,’ which translates to being ‘the World Centre of Tourism and Leisure,’ ‘the China-Portuguese-speaking Countries Commercial and Trade Service Platform,’ and ‘the Exchange and Cooperation Base with Mainstream Chinese Culture and Co-existence of Different Cultures’ to bolster the city’s economic diversification and sustainable development.
Macao’s ‘One Base’ position is particularly prominent among the three functions. Due to its linguistic, cultural, and historical origins, Macao and Portuguese-speaking countries have forged a wide range of governmental and non-governmental ties, such as the Macao Association of Merchants of Portuguese-Speaking Countries Products and the Business Centre of Portugal in Asia. Portuguese is one of the official languages of Macao, which is home to many Portuguese-speaking entrepreneurs and professionals who are closely connected with the Portuguese-speaking markets countries.
Macao is embracing further economic cooperation with the mainland, especially the Pan-Pearl River Delta Region such as the Closer Economic Partnership Arrangement (CEPA*) with mainland China and Hong Kong, the Pan-Pearl River Delta Regional Cooperation Framework Agreement, the Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area, and the Master Plan of the Development of the Guangdong-Macao In-depth Cooperation Zone in Hengqin.
*Details of the Closer Economic Partnership Arrangement between mainland China, Hong Kong, and Macao can be found here: https://www.dsedt.gov.mo/en_US/web/public/pg_eetr_cepa_s?_refresh=true
*Details of the HK-Macao CEPA can be found here: https://www.dsedt.gov.mo/en_US/web/public/pg_rc_hmcepa
Low and Simple Tax Taxation Regime
Macao adopts a simple taxation system with a maximum profits tax of 12%. Furthermore, Macao has rolled out tax incentives for key industries. Qualified enterprises are entitled to benefits such as reduction or exemption of property, business, profits, consumption, and motor vehicles tax.
Talents who seek development in Macao enjoy the same simple taxation system and low tax rates as residents, as well as other tax benefits as stipulated in the Legal System for Talent Recruitment, including the reduction or exemption of the stamp duty for property conveyance for a business establishment purchased by a professional or a company where they directly hold over 50% of the shares, or their liable urban property tax, profits tax or salaries tax.
(List of taxes: https://www.cdqq.gov.mo/en/home-coming/work-employment/tax/)
Modern Transportation and Communication
With its unique geography, Macao enjoys convenient access to the world with a comprehensive network of maritime, land, and air transport and modern telecommunication networks. As of 31 December 2021, Macao initialed bilateral air services agreements with 50 countries and has officially signed 41 of them.
In October 2022, the Macao International Airport’s land reclamation and expansion project was approved by the State Council of China. Once the project has been completed, the airport will expect an annual passenger capacity of 15 million.
As of 2022, 144 countries and regions agreed to grant visa-free or visa-on-arrival access to Macao SAR passport holders, including EU member states and Asian countries such as Japan, South Korea, and Singapore.
Telecommunications in Macao have reached internationally advanced standards, with modern communication networks of telephone, telegraph, fax, television satellite services, and Internet connecting over 230 countries and regions worldwide.
Comprehensive Social Welfare System
The legal system in the Macao SAR is established on the premise of law-based governance and judicial independence. It is based on the civil law system under the ‘One Country, Two Systems’ principle.
The Basic Law of the Macao Special Administrative Region of the People’s Republic of China is the constitutional document of the Macao SAR that stipulates its regime and ensures the implementation of the country’s fundamental directions and policies for the city.
According to the Basic Law, the Macao SAR shall enjoy independent judiciary, including the power of final adjudication. Macao residents enjoys the freedoms of speech, the press, publication, association, assembly, procession, and demonstration; the freedom to form and join trade unions and to strike; the freedom of religious belief; and the freedom to travel and to enter or leave the SAR. The provisions of the International Covenant on Civil and Political Rights, the International Covenant on Economic, Social, and Cultural Rights, and the International Labour Conventions apply to Macao.
Macao enjoys stable public security with a low crime rate. Based on existing policies and following the social situation and the trend of crimes, the security authorities of the Macao SAR Government adjust, plan and enforce measures to effectively prevent crimes and safeguard life, property, and social stability.
Macao has a well-established education system and it is the first region across Greater China to provide 15 years of free education. In the 2021/2022 academic year, there are ten tertiary institutions and 77 non-tertiary schools in Macao with 120 campuses. Of the 112 campuses that provide formal education, 107 are included in the free education network, representing a coverage of 95.5% and benefiting around 75,000 students. International schools and international campuses are also available at non-tertiary stage.
In addition to free education, the Macao SAR Government offers several scholarships that provide tuition fee subsidies for Macao students who study in private schools.
The Government supports schools to develop their philosophy of education, curriculum, and teaching methods. It encourages a diverse school system to nurture more talent in society.
The Programme for International Student Assessment (PISA) is a scheme run by the Organisation for Economic Co-operation and Development (OECD) that evaluates reading, mathematics, and science abilities of 15-year-old secondary students in participating countries/economies every three years. According to the PISA results in 2018, 89.2% of Macao students reached the PISA standards, ranking second in the world, and the total scores of Macao students ranked third in the world. The PISA 2018 report indicates that Macao is the only country/economy seeing continuous and rapid education quality progress.
In 2022, over 95% of the high school graduates in Macao furthered their studies at university. The Education and Youth Development Bureau (DSEDJ) provides scholarships and grants for outstanding students, including the ‘Scholarship Scheme for Study at Top Institutions’, Special Grants, and Extraordinary Grants.
Macao has four hospitals and 702 primary healthcare service venues. As of late 2021, there were 2.6 doctors, 3.8 nurses, and 2.5 hospital beds per every 1,000 people in Macao.
The healthcare services in Macao can be divided into those provided by governmental and non-governmental institutions. Governmental institutions mainly include health centres that provide primary medical services and the Conde S. Januario Hospital, which offers specialty services. Non-governmental institutions are mainly institutions that receive subsidies from the government and associations (such as the Kiang Wu Hospital, University Hospital, Workers’ Medical Clinic, and Tung Sin Tong Clinics) and various private clinics and laboratories. The services provided by health centres and Tung Sin Tong Clinics are mostly free of charge.
The Islands District Medical Complex is expected to be put into operation in the fourth quarter of 2023. It will become the second public hospital in Macao with 1,100 medical beds. The complex occupies an area of 77,500 square meters with a floor area of around 320,000 square meters. Facilities in the complex include a central laboratory building, an auxiliary building for a rehabilitation hospital, a hospital building, an integrated services building, a staff dormitory, and a nursing college. The complex will be jointly operated and managed by the Macao MSAR Government and the Peking Union Medical College Hospital, and it is preliminarily designed to include oncotherapy, cardiology, transplantation, paediatrics, gynaecology departments, and for services such as oncotherapy and aesthetic medicine, enhancing the city’s capability in treating complicated and severe cases and increasing healthcare standards.
Macao residents enjoy comprehensive coverage of medical benefits. All Macao residents are entitled to free services at health centres and supplementary check-ups at the Conde S. Januario Hospital by referral from health centres. For services provided by the Conde S. Januario Hospital, Macao residents enjoy a 30% waiver of the charges.
Since 2009, the Government has implemented the ‘Healthcare Subsidy Scheme,’ distributing healthcare vouchers to every permanent Macao resident to enhance their health awareness, subsidise their medical expenses, and foster the development of private medical units. Since 2018, the Government has issued electronic healthcare vouchers to promote innovative healthcare.
(Health Bureau: https://www.ssm.gov.mo/portal/)
Macao’s relatively extensive social security system provides all residents with essential social security benefits. In November 2008, the Macao SAR Government announced the Social Security and Old-age Pension System Reform Bill to build a double-tier social security system. Specifically, all Macao residents can enjoy basic social security, especially old-age pension, through the first-tier social security system dedicated to improving residents’ quality of life. The second-tier Non-Mandatory Central Provident Fund System supports ampler protection for retired individuals.
(Social Security Fund: https://www.fss.gov.mo/)
Harmony of Chinese and Western Cultures
The religions in Macao fully embody Chinese and Western cultures. In addition to folk religions, Buddhism, Taoism, and Confucianism, Macao is also home to Catholicism, Christianity, and Islam, which were introduced from abroad long ago.
The disciples and followers of different religions perform various commemorative activities or celebratory rituals in unique ways during traditional festivals. For example, the Diocese of Macao’s traditional processions include the Procession of Our Lady of Fátima, the Procession of the Passion of Our Lord, the God Jesus, and the Procession of the Dead Lord. During traditional Buddhist festivals, disciples and followers burn incense and chant scriptures to pray for universal salvation. During celebratory activities for folk gods, such as Tin Hau, Tou Tei, Tam Kong, and Na Tcha, devotees flock to temples to offer sacrifices to the gods, and theatrical troupes are invited to give religious performances in a bid to amuse both the gods and the general public.
In Macao, both Chinese and Western traditional festivals and customs are accepted, respected, and celebrated by the Chinese, Portuguese, Macanese, and other ethnic groups together. Macao observes a wide variety of festivals, and some of the public holidays in the city are determined either based on Chinese folk customs or Western traditional festivals, including the Lunar New Year, Ching Ming Festival, Easter, Buddha’s Birthday, Mid-Autumn Festival, Feast of Immaculate Conception, Winter Solstice and Christmas.
Richness of Cultural and Recreational Activities
As a ‘Creative City of Gastronomy,’ Macao has enjoyed centuries of cultural exchange and complementation between China and the West, from which diverse lifestyles, cultural traditions, and folk customs have emerged, shaping its unique tangible and intangible cultural heritage that presents the cultural landscape of Macao as a harmonious blend of Chinese and Western cultures.
As of late 2021, Macao had 11 items inscribed onto the National List of Intangible Cultural Heritage of China, namely Cantonese Opera, Herbal Tea Brewing, Woodwork – Religious Figure Carving, Cantonese Naamyam, Taoist Ritual Music, Festival of the Drunken Dragon, Belief and Customs of A-Ma, Belief and Customs of Na Tcha, Macanese Gastronomy, Patuá Theatre, and Belief and Customs of Tou Tei.
Macao has preserved various cultural heritage and offers a complete range of tourism facilities. Big and small festive events run throughout the year, including traditional Chinese festivals such as the Lunar New Year, Feast of Tou Tei, and the Dragon Boat Festival, and Western holidays such as Easter, Procession of Our Lady of Fátima, and Christmas.
In addition to festive celebrations, Macao hosts an array of large-scale international events every year, including the Macau Grand Prix, Food Festival, International Marathon, City Fringe Festival, Arts Festival, International Dragon Boat Races, and International Music Festival.
There are many parks in Macao that offer unique landscape and scenery, providing photogenic spots for tourists and greenery for residents to relax and exercise. These parks include the historical Guia Hill Municipal Park, Luís de Camões Park, and Flora Park.
The Macao SAR Government organises and co-organises various festive and cultural entertainment as well as sports events to enrich the city’s life. Macau has a wide variety of sports facilities that are available to the general public, including the Olympic Sports Centre, Macao East Asian Games Dome, Nam Van Lake Nautical Centre, Macao Forum, International Shooting Range, Bowling Centre, Tennis Academy, Hac-Sa Nautical Centre, and Coloane Karting Track. Macao also has several sports venues and golf courses owned by associations or private entities.