Executive Summary

Macau became a Special Administrative Region (SAR) of the People’s Republic of China (PRC) on December 20, 1999. Macau’s status since reverting to Chinese sovereignty is defined in the Sino-Portuguese Joint Declaration (1987) and the Basic Law. Under the concept of one country, two systems, articulated in these documents, Macau enjoys a high degree of autonomy in economic matters, and its economic system is to remain unchanged for 50 years. The Government of Macau (GOM) maintains a transparent, non-discriminatory, and free-market economy. The GOM is committed to maintaining an investor-friendly environment.

In 2002, the GOM ended a long-standing gaming monopoly, awarding two gaming concessions and one sub-concession to consortia with U.S. interests. This opening encouraged substantial U.S. investment in casinos and hotels, and has spurred rapid economic growth.

Macau is today the undisputed gaming capital of the world, having surpassed Las Vegas in terms of gambling revenue in 2006. U.S. investment over the past decade is estimated to exceed USD 23.8 billion. In addition to gaming, Macau hopes to position itself as a regional center for incentive travel, conventions, and tourism. The American business community in Macau has continued to grow. In 2007, business leaders founded the American Chamber of Commerce of Macau.

Macau seeks to speed up its economic diversification to transform the city into a tourism and leisure destination, as well as a commercial and trade cooperation service platform between the Mainland China and Portuguese-speaking countries. The GOM has various policies to promote these efforts and to create business opportunities for domestic and foreign investors.

In September 2016, the GOM announced its first Five-Year Development Plan (2016-2020). Highlights include establishing a trade cooperation service platform between Mainland China and Portuguese-speaking countries, improving the structure of industries, increasing the quality of life, protecting the environment, and strengthening government efficiency.

Table 1

Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2017 N/A http://www.transparency.org/
World Bank’s Doing Business Report “Ease of Doing Business” 2017 N/A doingbusiness.org/rankings
Global Innovation Index 2017 N/A https://www.globalinnovation
U.S. FDI in Partner Country ($M USD, stock positions) 2016 USD 1,643 http://www.bea.gov/
World Bank GNI per capita 2016 USD 65,130 http://data.worldbank.org/

Policies Towards Foreign Direct Investment

Under the concept of one country, two systems, Macau enjoys a high degree of autonomy in economic matters, and its economic system is to remain unchanged for at least 50 years. The GOM maintains a transparent, non-discriminatory, and free-market economy. Macau has separate membership in the World Trade Organization (WTO).

There are no restrictions placed on foreign investment in Macau as there are no special rules governing foreign investment. Both overseas and domestic firms register under the same set and are subject to the same regulations on business, such as the Commercial Code (Decree 40/99/M).

Macau is heavily dependent on the gaming sector and tourism. The GOM aims to diversify Macau’s economy by attracting foreign investment and is committed to maintaining an investor-friendly environment. Corporate taxes are low, with a tax rate of 12 percent for companies whose net profits exceed MOP 300,000 (USD 37,500). For net profits less than USD 37,500, the tax ranges from three percent to 12 percent. The top personal tax rate is 12 percent. The tax rate of casino concessionaries is 35 percent on gross gaming revenue, plus a four percent contribution for culture, infrastructure, tourism, and a social security fund.

In 2002, the GOM ended a long-standing gaming monopoly, awarding two gaming concessions to consortia with U.S. interests. This opening has encouraged substantial U.S. investment in casinos and hotels, and has spurred exceptionally rapid economic growth over the last few years. Macau is positioning itself to be a regional center for gaming, incentive travel, conventions, and tourism.

The Macau Trade and Investment Promotion Institute (IPIM) is an agency of the GOM with responsibility for promoting trade and investment activities. IPIM provides one-stop service and notary service for business registration, and it applies all legal and administrative procedures to all local and foreign individuals or organizations interested in setting up a company in Macau.

Macau maintains an ongoing dialogue with investors through various business networks and platforms, such as the IPIM, Macau Chamber of Commerce, AmCham Macau and Macau Association of Banks.

Limits on Foreign Control and Right to Private Ownership and Establishment

Foreign firms and individuals are free to establish companies, branches, and representative offices without discrimination or undue regulation in Macau. There are no restrictions on the ownership of such establishments. Company directors are not required to be citizens of, or resident in, Macau, except for the following three professional services which impose residency requirements:

Education – an individual applying to establish a school must have a Certificate of Identity or have the right to reside in Macau. The principal of a school must be a Macau resident.

Newspapers and magazines – applicants must first apply for business registration and register with the Government Information Bureau as an organization or an individual. The publisher of a newspaper or magazine must be a Macau resident or have the right to reside in Macau.

Legal services – lawyers from foreign jurisdictions who seek to practice Macau law must first obtain residency in Macau. Foreign lawyers must also pass an examination before they can register with the Lawyer’s Association, a self-regulatory body. The examination is given in Chinese or Portuguese. After passing the examination, foreign lawyers are required to serve an 18-month internship before they are able to practice law in Macau.

Other Investment Policy Reviews

Macau conducted the WTO Trade Policy Review in May 2013. https://www.wto.org/english/tratop_e/tpr_e/g281_e.pdf 

Business Facilitation

Macau provides a favorable business and investment environment for enterprises and investors. The IPIM helps foreign investors in registering a company and liaising with the involved agencies for entry into the Macau market. The business registration process takes less than 10 working days. http://www.ipim.gov.mo/en/services/one-stop-service/handle-company-registration-procedures/ .

Outward Investment

Macau, as a free market economy, does not promote or incentivize outward investment, nor does it restrict domestic investors from investing abroad. Hong Kong and Mainland China were the top two destinations for Macau’s outward investments in 2016.

Macau has signed investment protection agreements with Portugal and the Netherlands. It does not have a bilateral taxation treaty with the United States.

In 2004, Macau and Mainland China implemented a free trade agreement (FTA), the Closer Economic Partnership Arrangement (CEPA). The agreement provides tariff-free access to Mainland China for all Macau-origin products and preferential treatment for 48 service sectors. Since March 2015, Macau and the PRC’s Guangdong Province have implemented an agreement on achieving basic liberalization of trade in services. The agreement has introduced the use of a negative list under the CEPA framework that covers 134 service sectors and grants national treatment to Macau’s 58 service industries. In addition, this agreement has offered Macau most-favored nation treatment wherein liberalization measures included in FTAs signed by Mainland China and other countries are extended to Macau. The framework and content of the agreement serves as a model for basic liberalization of trade in services between Macau and all of Mainland China. Effective from July 2017, 27 more products of Macau origin exporting to Mainland China are entitled to the zero tariff preference under the CEPA, Gongbei Customs in Zhuhai City, Guangdong, announced on June 22. Most of the products are related to Portuguese-speaking countries, such as seasonings, sparkling wine, diamonds, and gems. The Gongbei authorities said the new measure would help attract companies from Portuguese-speaking countries to set up factories in Macau. In October 2017, Hong Kong and Macau signed a CEPA to enhance further economic cooperation and development between the two cities. In December 2017, Macau and Mainland China signed two agreements with immediate effect under the CEPA: an investment agreement and economic and technical cooperation agreement. The investment agreement includes investment access, investment protection and investment facilitation. The economic and technical co-operation agreement is aimed to encourage Macau to take a greater role in economic development across the region.

In December 2016, the United States signed an Inter-Government Agreement on the Foreign Account Tax Compliance Act with Macau.

In January 2018, the GOM indicated that work relating to the adoption in Macau of the Multilateral Convention on Mutual Administrative Assistance in Tax Matters was in its final stage and that the procedures of allowing automatic exchange of financial account information with European Union members would be implemented by the end of 2018. As of March 2018, the GOM has signed agreements with twelve jurisdictions (namely the Argentine Republic, the United Kingdom, Guernsey, Japan, Greenland, India, Australia, Denmark, the Faroes, Iceland, Norway, and Finland) on the exchange of information in tax matters.

Transparency of the Regulatory System

The GOM has transparent policies and laws that establish clear rules and do not unnecessarily impede investment. The basic elements of a competition policy are set out in Macau’s Commercial Code.

The GOM will normally conduct a three-month public consultation when amending or making legislation, including investment laws, and will write up a draft bill based on the results of the public consultation. The lawmakers will discuss the draft bill before putting it to a final vote. All the processes are transparent and consistent with international norms.

Public comments received by the GOM are not made available online to the public. The draft bills are made available at the Legislative Assembly’s website, http://www.al.gov.mo/zh/ , while this website, http://www.io.gov.mo/ , links to the GOM’s Printing Bureau, which publishes laws, rules, and procedures.

Macau’s accounting systems are also transparent. It has selectively adopted individual International Financial Reporting Standards into its accounting framework as Macau Accounting Standards (MASs), which became compulsory in January 2007. The application of MASs is mandatory for all establishments granted concessionary status by the GOM, as well as financial institutions and companies limited by shares in Macau.

International Regulatory Considerations

Macau is a member of WTO and adopts international norms. The GOM notified all draft technical regulations to the WTO Committee on Technical Barriers to Trade.

Macau, as a signatory to the Trade Facilitation Agreement (TFA), has achieved a 98.3 percent rate of implementation commitments. The remaining 1.7 percent rate of commitment regarding a single window will be implemented before the end of 2019.

Legal System and Judicial Independence

Under one country, two systems, Macau maintains Continental European law as the foundation of its legal system, which is based on the rule of law and the independence of the judiciary. The current judicial process is procedurally competent, fair, and reliable. Macau has a written commercial law and contract law. The Commercial Code is a comprehensive source of commercial law, while the Civil Code serves as a fundamental source of contractual law. Courts in Macau include the Court of Final Appeal, Intermediate Courts, and Primary Courts. There is also an Administrative Court, which has jurisdiction over administrative and tax cases. These provide an effective means for enforcing property and contractual rights. At present, the Court of Final Appeal has three judges; the Intermediate Courts have 9 judges; and the Primary Courts have 32 judges. The Public Prosecutions Office has 41 prosecutors.

Laws and Regulations on Foreign Direct Investment

Macau’s legal system is based on the rule of law and the independence of the judiciary. Foreign and domestic companies register under the same rules and are subject to the same set of commercial and bankruptcy laws (Decree 40/99/M).

Competition and Anti-Trust Laws

Macau has no agency that reviews transactions for competition-related concerns, nor a competition law. The Commercial Code (Law No. 16/2009) contains basic elements of a competition policy with regard to commercial practices that can distort the proper functioning of markets. The GOM states that existing provisions are adequate and appropriate given the scale and scope of local economy.

Expropriation and Compensation

The U.S. Consulate General is not aware of any direct or indirect actions to expropriate. Legal expropriations of private property may occur if it is in the public interest. In such cases, the GOM will exchange the private property with an equivalent public property based on the fair market value and conditions of the former. The exchange of property is in accordance with established principles of international law. There is no remunerative compensation.

Dispute Settlement

ICSID Convention and New York Convention

Both the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention) and the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) apply to Macau. The Law on International Commercial Arbitration (Decree 55/98/M) provides for enforcement of awards under the 1958 New York Convention.

Investor-State Dispute Settlement

The U.S. Consulate General is aware of one investment dispute involving U.S. or other foreign investors or contractors and the GOM. In March 2010, a low cost airline carrier was reportedly forced to cancel flight services because of a credit dispute with its fuel provider, triggering events which led to the airline’s de-licensing. Macau courts declared the airline bankrupt in September 2010. The airline’s major shareholder, a U.S. private investment company, filed a case in the Macau courts seeking a judgment as to whether a GOM administrative act led to the airline’s demise. The Court of Second Instance held hearings in May and June 2012. In November 2013, the Court of Second Instance rejected the appeal. Private investment disputes are normally handled in the courts or via private negotiation. Alternatively, disputes may be referred to the Hong Kong International Arbitration Center or the World Trade Center Macau Arbitration Center.

International Commercial Arbitration and Foreign Courts

Macau has an arbitration law (Decree 55/98/M), which adopts the UN Commission on International Trade Law (UNCITRAL) model law for international commercial arbitration. The GOM accepts international arbitration of investment disputes between itself and investors. Local courts recognize and enforce foreign arbitral awards.

Macau established the World Trade Center Macau Arbitration Center in June 1998. The objective of the Center is to promote the resolution of disputes through arbitration and conciliation, providing the disputing parties with alternative resolutions other than judicial litigation.

Foreign judgments in civil and commercial matters may be enforced in Macau. The enforcement of foreign judgments is stipulated in Articles 1199 and 1200 of the Civil Procedure Code. A foreign court decision will be recognized and enforced in Macau, provided that it qualifies as a final decision supported by authentic documentation and that its enforcement will not breach Macau’s public policy.

Bankruptcy Regulations

Commercial and bankruptcy laws are written under the Macau Commercial Code, the Civil Procedure Code, and the Penal Code. Bankruptcy proceedings can be invoked by an application from the bankrupt business, by petition of the creditor, or by the Public Prosecutor. There are four methods used to prevent the occurrence of bankruptcy: the creditors meeting, the audit of the company’s assets, the amicable settlement, and the creditor agreement. According to Articles 615-618 of the Civil Code and Article 351-353 of the Civil Procedure Code, a creditor who has a justified fear of losing the guarantee of his credits may request seizure of the assets of the debtor. Bankruptcy offences are subject to criminal liability.

There is no credit bureau or other credit monitoring authority serving Macau’s market.

Investment Incentives

To attract foreign investment, the GOM offers investment incentives to investors on a national treatment basis. These incentives are contained in Decrees 23/98/M and 49/85/M and are provided so long as companies can prove they are doing one of the following: promoting economic diversification, contributing to the promotion of exports to new unrestricted markets, promoting added value within their activity’s value chain, or contributing to technical modernization. There is no requirement that Macau residents own shares. These incentives are categorized as fiscal incentives, financial incentives, and export diversification incentives.

Fiscal incentives include full or partial exemption from profit/corporate tax, industrial tax, property tax, stamp duty for transfer of properties, and consumption tax. The tax incentives are consistent with the WTO Agreement on Subsidies and Countervailing Measures, as they are neither export subsidies nor import substitution subsidies as defined in the WTO Agreement. Financial incentives include government-funded interest subsidies. Export diversification incentives include subsidies given to companies and trade associations attending trade promotion activities organized by IPIM. Only companies registered with Macau Economic Services (MES) may receive subsidies for costs such as space rental or audio-visual material production. Macau also provides other subsidies for the installation of anti-pollution equipment.

Foreign Trade Zones/Free Ports/Trade Facilitation

Macau is a free port; however, there are four types of dutiable commodities: liquors, tobacco, vehicles, and petrol (gasoline.) Licenses must be obtained from the MES prior to importation of these commodities.

In order to promote the MICE (meetings, incentives, conventions, and exhibitions) and logistics industry in Macau, the Legislative Assembly approved in July 2016 a bill amending the existing Foreign Trade Law issued in 2003. This amendment introduced an ATA Carnet (Admission Temporaire/Temporary Admission), an international customs document providing an efficient method for the temporary import and re-export of goods and greatly eases the way for foreign exhibitions and businesses.

There are a number of significant infrastructure projects in Macau, including the:

Light Rail Transit (LRT) System: In 2003, in an effort to relieve traffic congestion, the GOM proposed to build a 21-km LRT to connect the Macau Peninsula, Taipa Island, and Cotai (reclaimed land between the islands of Coloane and Taipa) with 21 stations. After years of research, the GOM commenced the first phase in November 2011 and now expects to complete this phase by the end of 2019.

Hong Kong-Zhuhai-Macau Bridge: The construction of the Macau section of the 29-km bridge started in December 2009. The bridge, expected to link Hong Kong, Zhuhai city (in Guangdong province), and Macau with the western part of the Pearl River Delta region, is scheduled to open in mid-2018.

Pac On Ferry Terminal: The construction of a new ferry terminal at Taipa, which took almost 12 years, came into operation in June 2017. It will become Macau’s main maritime border crossing, with a capacity to handle 15 million passengers a year.

Performance and Data Localization Requirements

Macau does not follow a forced localization policy in which foreign investors must use domestic content in goods or technology.

There are no requirements by the GOM for foreign IT providers to turn over source code and/or provide access to surveillance (i.e., backdoors into hardware and software or turning over keys for encryption).

According to the Personal Data Protection Act (Decree 8/2005), if there is transfer of personal data to a destination outside Macau, the opinion of the Office for Personal Data Protection — the regulatory authority responsible for supervising and enforcing the Act — must be sought to confirm if such destination ensures an adequate level of protection.

One major U.S. cloud computing company reported that Macau’s Gaming Inspection and Coordination Bureau had refused permission for potential clients in the gaming sector to export personal data to data centers located outside of Macau.

Real Property

Private ownership of property is enshrined in the Basic Law. There are no restrictions on foreign property ownership. Macau has a sound banking mortgage system, which is under the supervision of the Macau Monetary Authority (MMA). There are only a small number of freehold property interests in the older part of Macau.

According to the Cartography and Cadaster Bureau, 21 percent of land parcels in Macau do not have clear title, for unknown reasons. Industry observers commented that no one knows whether these land parcels will be privately or publicly owned in the future.

The Land Law (Decree 10/2013) stipulates that provisional land concessions cannot be renewed upon their expiration if their leaseholders fail to finish developing the respective plots of land within a maximum concession period of 25 years. The leaseholders will not only be prohibited from renewing the undeveloped concessions — regardless of who or what caused the non-development, but also have no right to be indemnified or compensated.

Intellectual Property Rights

Macau is a member of the World Intellectual Property Organization (WIPO). Macau is not listed in USTR’s Special 301 Report. Macau has acceded to the Bern Convention for the Protection of Literary and Artistic Works. Patents and trademarks are registered under Decree 97/99/M. Macau’s copyright laws are compatible with the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights, and government offices are required to use only licensed software. The GOM devotes considerable attention to intellectual property rights enforcement and coordinates with copyright holders. Source Identification Codes are stamped on all optical discs produced in Macau. The MES uses an expedited prosecution arrangement to speed up punishment of accused retailers of pirated products.

Macau Customs maintains an enforcement department to investigate incidents of intellectual property (IP) theft. Macau Customs works closely with Mainland Chinese authorities, foreign customs agencies, and the World Customs Organization to share best practices to address criminal organizations engaging in IP theft.

Since 2010, Macau has accelerated the registration processes for trademarks and patents by doubling the publication frequency of applications. In February 2012, the Legislative Assembly passed a bill to Modify the Copyright System and Related Rights, which revised the existing copyright law by extending protections to Internet and digital technology. Today, copyright infringement for trade or business purposes is subject to a fine or a maximum imprisonment of four years. Since the enactment of the law, signal piracy (including U.S. origin program content) has been reduced.

The number of applications for trademark registrations has increased steadily. Applications exceeded 10,000 for the first time in 2013 and have grown to a total of 13,135 applications in 2017,

Capital Markets and Portfolio Investment

Macau allows free flows of financial resources. Foreign investors can obtain credit in the local financial market. The GOM is stepping up its efforts to develop finance leasing businesses and exploring opportunities to establish a system for trade credit insurance in order to take a greater role in promoting cooperation between companies from Portuguese-speaking countries.

In December 2009, the MMA signed a memorandum with the People’s Bank of China to develop the Renminbi (RMB) settlement mechanism for cross-border trade. According to the memorandum, the quota on the value of RMB exchanged for each individual transaction increased from RMB 6,000 (USD 878) to RMB 20,000 (USD 2,928). The list of designated merchants allowed to exchange RMB for MOP from Macau banks was expanded to include institutions that provide telecommunications, education, and exhibition/convention services. In addition, Macau residents are allowed to use RMB checks to pay for consumer spending in Guangdong Province, up to RMB 50,000 (USD 7,320) per account per day. Since 2010, the People’s Bank of China (BoC) has provided cross-border settlement of funds for Macau residents and institutions involved in transactions for RMB bonds issued in Hong Kong. Macau residents and institutions can purchase or sell, through Macau RMB participating banks, RMB bonds issued in Hong Kong. In February 2018, the Macau branch of Bank of China issued the first batch of offshore RMB bonds, consisting of RMB 2.5 billion (USD 400 million) in three-year notes yielding 4.65 percent and RMB 1.5 billion (USD 240 million) in one-year notes yielding 4.45 percent. The proceeds were used for general funding purposes. The Macau RMB Real Time Gross Settlements (RMB RTGS) System came into operation in March 2016 to provide real-time settlement services for RMB remittances and interbank transfer of RMB funds. The RMB RTGS System is intended to improve risk management and clearing efficiency of RMB funds and foster Macau’s development into a RMB clearing platform for trade settlement between China and Portuguese-speaking countries.

Macau has no stock market, but companies can seek a listing in Hong Kong’s stock market. Macau and Hong Kong financial regulatory authorities cooperate on issues of mutual concern. Under the Macau Insurance Ordinance, the MMA authorizes and monitors insurance companies. There are 11 life insurance companies and 12 non-life insurance companies in Macau. Total gross premium income from insurance services amounted to USD 2.7 billion in 2017.

Offshore finance businesses, including credit institutions, insurers, underwriters, and offshore trust management companies, are regulated and supervised by the MMA. Profits derived from offshore activities are fully exempted from all forms of taxes. The Decree 9/2012, in effect since October 2012, stipulates that banks compensate depositors up to a maximum of MOP 500,000 (USD 62,500) in case of a bank failure. To finance the deposit protection scheme, the GOM has injected MOP 150 million (USD 18.75 million) into the deposit protection fund, with banks paying an annual contribution of 0.05 percent of the amount of protected deposits held.

Money and Banking System

The MMA functions as a de facto central bank. It is responsible for maintaining the stability of the financial system and managing currency reserves and foreign assets. At present, there are twenty-nine financial institutions in Macau, including 10 local banks and 19 branches of banks incorporated outside Macau. In addition, there are 11 moneychangers, 2 cash remittance companies, 2 financial intermediaries, 6 exchange counters, and 1 representative office of a financial institution. These institutions provide a range of credit instruments. The BoC and Industrial and Commercial Bank of China (ICBC) are the two largest banks in Macau, with total assets of USD 67.6 billion and USD 26.3 billion, respectively. Banks with capital originally from Mainland China and Portugal had a combined market share of about 86 percent of total deposits in the banking system at the end of 2016. Total deposits amounted to USD 72.1 billion by the end of 2017. In the fourth quarter of 2017, banks in Macau maintained a capital adequacy ratio of 15.74 percent, well above the minimum eight percent recommended by the Bank for International Settlements. Accounting systems in Macau are consistent with international norms.

Following a decision by the People’s Bank of China to ban fundraising through digital currencies, the MMA issued in September 2017 a statement prohibiting the city’s financial institutions, banks and payment services from providing services to businesses issuing virtual currencies or tokens.

Foreign Exchange and Remittances

Foreign Exchange Policies

Profits and other funds associated with an investment, including investment capital, earnings, loan repayments, lease payments, and capital gains, can be freely converted and remitted. The domestic currency, Macau Official Pataca (MOP), is pegged to the Hong Kong Dollar at 1.03 and indirectly to the U.S. Dollar at an exchange rate of approximately MOP 7.99 equivalent to USD 1. The MMA is committed to exchange rate stability through maintenance of the peg to the Hong Kong Dollar.

Although Macau imposes no restrictions on capital flows and foreign exchange operations, exporters are required to convert 40 percent of foreign currency earnings into MOP. This legal requirement does not apply to tourism services.

Remittance Policies

There are no recent changes to or plans to change investment remittance policies. Macau does not restrict the remittance of profits and dividends derived from investment, nor does it require reporting on cross-border remittances. Foreign investors can bring capital into Macau and remit it freely.

In August 2015, the MMA signed a Memorandum of Understanding (MOU) on AML actions with the People’s Bank of China. The MOU covers actions such as information exchange and cooperation on onsite inspections of casino operations. Furthermore, the Legislative Assembly approved unanimously in March 2016 Macau’s first terrorist asset-freezing bill, which is based on compliance with United Nations (UN) Security Council resolutions. The bill became effective on August 30, 2016. In November 2017, a new law on cross border cash declaration and disclosure systems came into effective. Travelers entering or leaving with cash or other negotiable monetary instruments valued at MOP 120,000 (USD 15,000) or more will have to sign a declaration form and submit it to the Macau Customs Service.

Sovereign Wealth Funds

The International Monetary Fund (IMF) suggested in July 2014 that the GOM invest its large fiscal reserves in setting up a sovereign wealth fund to protect the city’s economy from future downturns that could stem from slowing gaming revenues, increased social spending arising from an ageing population, and structural reforms in Mainland China. In November 2015, the GOM decided to establish a sovereign wealth fund, named the MSAR Investment and Development Fund, through a substantial allocation from the city’s ample fiscal reserves. The GOM is currently studying legislation for setting up the Fund by 2019.

Macau does not have state-owned enterprises (SOEs). Several economic sectors – including cable television, telecommunications, electricity, and airport/port management, are run by private companies under concession contracts from the GOM. The GOM holds a small percentage of shares (ranging from one to 10 percent) in these government-affiliated enterprises. The government set out in its Commercial Code the basic elements of a competition policy with regard to commercial practices that can distort the proper functioning of markets. Court cases related to anti-competitive behavior remain rare.

Privatization Program

The GOM has not mentioned any considerations of privatization programs in recent years.

The six gaming concessionaires that dominate Macau’s economy pay four percent of gross gaming revenues to the government to fund cultural and social programs in the SAR. Several operators also directly fund gaming addiction rehabilitation programs. Some government-affiliated entities maintain active corporate social responsibility (CSR) programs. For example, Companhia de Electricidade de Macau, an electric utility, provides educational programs and repair services free-of-charge to underprivileged residents. The GOM conducted an interim assessment of the gaming sector in May 2016. One of the nine aspects that the GOM will consider for the renewal of gaming licenses, which will expire between 2020 and 2022, is casino operators’ social responsibility. (Note: The licenses held by SJM Holdings and MGM China will expire in 2020, while those of Wynn Resorts, Melco Crown Entertainment, Galaxy Entertainment Group, and Sands China run until 2022. End note.) Since 2007, the Junior Chamber International Macau has held an annual Corporate Social Responsibility International Forum to promote CSR programs. In February 2017, Macau Polytechnic Institute held a Forum on Macau Integrated Tourism and Leisure Enterprises and Corporate Social Responsibility. In June 2017, MGM China received the Asia Responsible Entrepreneurship Award from Enterprise Asia. In November 2017, MGM China was named one of 15 global finalists for the Thomson Reuters Stop Slavery Award because of its demonstrated adherence to and implementation of best practices for stopping human trafficking.

Macau is not a member of the OECD, and hence, the OECD Guidelines for Multinational Enterprises are not applicable to Macau companies.

Macau has laws to combat corruption by public officials. The anti-corruption laws are applied in a non-discriminatory manner and effectively enforced. In December 2014, the Legislative Assembly passed a bill to prevent and curb bribery in external trade. The bill, based on the UN Convention against Corruption, came into effect January 2015. The law stipulates that anyone who offers a bribe to foreign public officials (including officials of Mainland China, Hong Kong, and Taiwan) and officials of public international organizations in exchange for a trade deal could receive a jail term up to three years or fines.

Macau’s anti-corruption agency is the Commission Against Corruption (known by its Portuguese acronym CCAC). Until 2009, the CCAC’s overall effectiveness was constrained by legislation limiting the scope of its authority to government-sector corruption. In August 2009, the Legislative Assembly passed an amendment that empowered the CCAC to also investigate private sector corruption. In February 2016, former head of the Public Prosecutions Office Ho Chio-meng was arrested by CCAC. Ho, an executive of the anti-graft agency before Macau reverted to Chinese sovereignty, and his main officers were accused of receiving USD 5.5 million in kickbacks during 2004-14 from public works contracts worth a total of USD 21 million. The Court of Final Appeal handed down a jail sentence of 21 years to Ho in July 2017.

Resources to Report Corruption

Contact at government agency or agencies are responsible for combating corruption:

CHEONG Weng-chon, Commissioner
Commission Against Corruption
105, Avenida Xian Xing Hai, 17/F, Centro Golden Dragon, Macau
+853- 2832-6300

Macau is politically stable. The U.S. Consulate General is not aware of any incidents in recent years involving politically motivated damage to projects or installations.

Macau’s unemployment rate in February 2018 was 1.9 percent. Foreign businesses cite a constant shortage of skilled workers – a result of the past decade’s boom in entertainment facilities – as a top constraint on their operations and future expansion. The government is studying proposals to resolve the human resources problem. For example, Macau has labor importation schemes for unskilled and skilled workers who cannot be recruited locally. However, both local and foreign casino operators in Macau are required by law to employ only Macau residents as croupiers. There is no such restriction imposed on any other sector of the economy.

Macau does not have any policies that waive labor laws in order to attract or retain investment. The rights for workers to form trade unions and to strike are both enshrined in the Basic Law, but there are no laws in Macau that specifically deal with those rights. The law does not provide that workers can collectively bargain, and while workers have the right to strike, there is no specific protection in the law from retribution if workers exercise this right. Labor unions are independent of the government and employers, by law and in practice.

According to the Labor Relations Law, a female worker cannot be dismissed, except with just cause (e.g., willful disobedience to orders given by superiors, or violation of regulations on occupational hygiene and safety), during her pregnancy or within three months of giving birth. In practice, either the employer or the employee may rescind the labor contract with or without just cause. In general, any circumstance that makes it impossible to continue the labor relation can constitute just cause for rescission of the contract. If the employer terminates the contract with the worker without just cause, the employer must pay the employee severance pay. In addition, Macau’s social security system, which is regulated by Decree 84/89/M, provides local workers with economic aid when they are old, unemployed, or sick.

Workers who believe they were dismissed unlawfully can bring a case to court or lodge a complaint with the Labor Affairs Bureau. Even without formal collective bargaining rights, companies often negotiate with unions, although the government may act as an intermediary. There is no indication that past disputes or appeals were subject to lengthy delays.

The GOM has put measures in place to replace some foreign workers with Macau residents. Macau has a law imposing criminal penalties for employers of illegal migrants and preventing foreign workers from changing employers in Macau. The government has used the proceeds of a tax on the import of temporary workers for retraining local unemployed people.

Macau’s first statutory minimum hourly wage, set at USD 3.8 for security guards and cleaners employed by property management companies, came into effect January 1, 2016. This remains the only minimum hourly wage in effect.

Overseas Private Investment Corporation coverage is not available in Macau.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

Host Country Statistical Source USG or International Statistical Source USG or International Source of Data:
BEA; IMF; Eurostat; UNCTAD, Other
Economic Data Year Amount Year Amount
Host Country Gross Domestic Product (GDP) ($M USD) 2017 USD 50,525 2016 USD 45,311 www.worldbank.org/en/country 
Foreign Direct Investment Host Country Statistical Source USG or International Statistical Source USG or International Source of Data:
BEA; IMF; Eurostat; UNCTAD, Other
U.S. FDI in Partner Country ($M USD, stock positions) 2016 USD 692.8 2016 USD 1,643 BEA data available at
Host Country’s FDI in the United States ($M USD, stock positions) 2016 N/A 2016 USD 8 BEA data available at
Total Inbound Stock of FDI as % host GDP 2016 67.4 2016 67.4 N/A

Table 3: Sources and Destination of FDI

Direct Investment from/in Counterpart Economy Data
From Top Five Sources/To Top Five Destinations (US Dollars, Millions)
Inward Direct Investment Outward Direct Investment
Total Inward 30,547 100% Total Outward 2,198 100%
China, P.R.: Hong Kong 8,586 28% China, P.R.: Mainland 891 41%
British Virgin Islands 7,125 23% China, P.R.: Hong Kong 677 31%
Cayman Islands 7,015 23% British Virgin Islands 107 5%
China, P.R.: Mainland 4,856 16% Singapore 2 0.1%
Portugal 1,133 4%
“0” reflects amounts rounded to +/- USD 500,000.

Table 4: Sources of Portfolio Investment

Portfolio Investment Assets
Top Five Partners (Millions, US Dollars)
Total Equity Securities Total Debt Securities
All Countries 60,684 100% All Countries 23,019 100% All Countries 37,664 100%
China, P.R.: Mainland 23,453 39% China, P.R.: Mainland 6,436 28% China, P.R.: Mainland 17,017 45%
China, P.R.: Hong Kong 8,241 14% China, P.R.: Hong Kong 5,100 22% British Virgin Islands 3,374 9%
United States 5,856 10% United States 2,848 12% China, P.R.: Hong Kong 3,141 8%
Cayman Islands 4,107 7% Cayman Islands 2,427 11% United States 3,009 8%
British Virgin Islands 4,105 7% Luxembourg 1,370 6% Australia 2,754 7%

Alan Brinker, Consul, Economic Affairs
U.S. Consulate General Hong Kong
26 Garden Road, Central
Hong Kong SAR, PRC

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