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 following the 1999 reversion to Chinese sovereignty.  Macau, a separate customs territory, describes itself as a liberal economy and a free port.  Tourism is the basis of the Macau economy.

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 in the tourism, gaming, and entertainment sector, in which the gaming industry constitutes the most important pillar of Macau economy.  In 2019, gaming taxes accounted for 86 percent of all tax revenue collected.

Macau is today the biggest gaming center in the world, having far surpassed Las Vegas in gambling revenue.  However, Macau has been hit worse by the pandemic than Las Vegas as inbound travel restrictions mandated by the Macau government in January 2020 drastically reduced the number of travelers from mainland China, who account for the vast majority of Macau’s tourists entering Macau.  Macau recorded the lowest monthly gaming revenue on record in June 2020, earning USD 89.7 million.  U.S. investment over the past decade is estimated to exceed USD 23.8 billion.  In addition to gaming, Macau aspires to position itself as a regional center for incentive travel, conventions, and tourism, though to date it has experienced limited success in diversifying its economy.  In 2007, business leaders founded the American Chamber of Commerce of Macau.

Macau also seeks to become a “commercial and trade cooperation service platform” between 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.  Many infrastructure projects are currently underway, such as new casinos, hotels, subways, airport extension, and the Macau-Taipa 4th vehicular harbor crossing that started construction in August 2020.

Table 1: Key Metrics and Rankings
Measure Year Index/Rank Website Address
TI Corruption Perceptions Index N/A x of 175 http://www.transparency.org/research/cpi/overview
World Bank’s Doing Business Report N/A x of 190 http://www.doingbusiness.org/en/rankings
Global Innovation Index N/A x of XX https://www.globalinnovationindex.org/analysis-indicator
U.S. FDI in partner country ($M USD, historical stock positions) 2019 USD 2,530 https://apps.bea.gov/international/factsheet/
World Bank GNI per capita 2018 USD 78,640 http://data.worldbank.org/indicator/NY.GNP.PCAP.CD

Policies Towards Foreign Direct Investment

The Joint Declaration of the Government of the People’s Republic of China and the Government of the Portuguese Republic on the question of Macau was signed in March 1987, which established the constitutional principle of “One Country, Two Systems.”.  The “One Country, Two Systems” principle guarantees that the rights related to autonomy, its capitalist system, its legal regime, and the liberal society enjoyed by Macau would remain unchanged until at least 2049.  Drafted based on the Joint Declaration, Macau’s Basic Law came into effect in December 1999 and laid out the basic principles of Macau’s governance under Chinese sovereignty.  The Basic Law also guaranteed that “One Country, Two Systems” would remain essentially unchanged in Macau until at least 2049.

The GOM maintains a transparent, non-discriminatory, and free market economy.  Macau has separate membership in the World Trade Organization (WTO) from that of mainland China.  According to the 2018 Index of Economic Freedom released by The Wall Street Journal and The Heritage Foundation, Macau ranked 34th among 180 worldwide economies and ranked the 9th in the Asia Pacific region.  However, Macau was excluded from the 2021 Index published in March 2021.  The Heritage Foundation explained the decision to exclude Macau by saying that developments over the past few years have demonstrated unambiguously that those policies offering economic freedom to Macau are ultimately controlled from Beijing.

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, 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.

Macau is attempting to position itself to be a regional center for incentive travel, conventions, and tourism.  In March 2019, the GOM extended for two years the gaming licenses of SJM (a locally owned company) and MGM China (a joint venture with investment from U.S.-owned MGM Resorts International that holds a sub-concession from SJM), that were set to expire in 2020.  The concessions of all six of Macau’s gambling concessionaires and sub-concessionaires are now set to expire in June 2022.  The GOM is currently drafting a bill to guide the gaming concession retendering process and plans to conduct public consultations on the bill in the second half of 2021.

The Macau Trade and Investment Promotion Institute (IPIM) is the GOM agency responsible for promoting trade and investment activities.  IPIM provides one-stop services, including notary service, for business registration, and it applies 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, the Macau Chamber of Commerce, American Chamber of Commerce  Macau, and the Macau Association of Banks.  Macau participates in the Forum for Economic and Trade Cooperation between China and Portuguese-speaking Countries, a liaison platform that strengthens economic and commercial cooperation among lusophone nations.  The Forum hosts a ministerial-level conference in Macau on a triennial basis to gather businesspeople from the participating countries, as well as government officials, and representatives from international trade organizations and trade promotion institutes, to enhance business ties.

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 can practice law in Macau.

Other Investment Policy Reviews

Macau last conducted the WTO Trade Policy Review in December 2020.  See https://www.wto.org/english/tratop_e/tpr_e/s402_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 typically takes less than 10 working days.  Company registration procedures can be found here: http://www.ipim.gov.mo/en/services/one-stop-service/handle-company-registration-procedures/

Outward Investment

Macau does not promote or incentivize outward investment, nor does it restrict domestic investors from investing abroad.  In 2019, the latest available data, outward investment flows of Macau enterprises soared by 292.8 percent year-on-year to MOP 4.53 billion, attributable to an increase in loans granted abroad by Macau enterprises.  Hong Kong and mainland China remained the top two destinations.

Macau has signed bilateral investment treaties (BIT) with Portugal and the Netherlands.  It does not have a bilateral taxation treaty with the United States.

Macau and mainland China have 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.  Macau and the PRC’s Guangdong Province have implemented an agreement on achieving basic liberalization of trade in services, which uses 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 gives 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.  Under the CEPA framework, there is an investment agreement and an 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 September 2018, the Multilateral Convention on Mutual Administrative Assistance in Tax Matters came into force with respect to Macau.  As of January 2021, the GOM has signed Tax Information Exchange Agreements (TIEA) with 16 jurisdictions (namely the Argentine Republic, the United Kingdom, Guernsey, Japan, Greenland, India, Australia, Denmark, the Faroe Islands, Iceland, Norway, Sweden, Malta, Ireland, Jamaica, and Finland).  TIEA negotiation with Germany and New Zealand has been ongoing.  Currently, double taxation relief is available under the respective double taxation agreements that Macau has with Cabo Verde, the People’s Republic of China, Mozambique, Vietnam, Portugal, and Hong Kong.

In November 2019, Macau and Hong Kong signed a comprehensive avoidance of double taxation agreement that came into effect on January 1, 2021.  Under the agreement, any Hong Kong tax paid by Macau residents on income derived from sources in Hong Kong will be allowed as a credit against the Macau tax payable on the same income, and vice versa.

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 prepare 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 of 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 anti-corruption agency the Commission Against Corruption (known by its Portuguese acronym CCAC) carries out ombudsman functions to safeguard rights, freedoms, and legitimate interests of individuals and to ensure the impartiality and efficiency of public administration.

Macau’s law on the budgetary framework (Decree 15/2017) aims to reinforce monitoring of public finances and to enhance transparency in the preparation and execution of the fiscal budget.

Macau does not owe debt to any countries.  The public can retrieve up-to-date data on public finance from the Financial Services Bureau website https://www.dsf.gov.mo/financialReport/?lang=en at all times.

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 100 percent rate of implementation commitments.

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 nine judges; and the Primary Courts have 33 judges.  The Public Prosecutions Office has 38 prosecutors.

Macau passed a National Security Law in 2009 that prohibits and punishes crimes against national security, including treason, secession, sedition, subversion, theft of state secrets, and collusion with foreign political organizations.  Preparatory acts leading to any of these crimes may also constitute a criminal offence.

Macau’s courts still have jurisdiction over all local cases except those related to defense and foreign affairs.  The 2009 National Security Law did not affect this jurisdiction.

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 Antitrust Laws

Macau has no agency that reviews transactions for competition-related concerns, nor does it have a competition law.  The Commercial Code (Law No. 16/2009) contains basic elements of a competition policy for commercial practices that can distort the proper functioning of markets.  In response to public outcries of price-fixing schemes in the Macau oil and food retail industries, in March 2019, the GOM commissioned Macau University of Science and Technology to conduct research on how to optimize market institutions to help foster healthy private sector competition.  The research results were released to the public in May 2020.  Based on this research, the GOM claimed that a legislative solution such as an anti-monopoly or anti-trust law would not necessarily bring about lower prices.  Rather, the GOM appointed the Macau Consumer Council to monitor the local market prices and determine when the need for new legislation on market competition is warranted.

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 previous 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.  The Arrangement for Mutual Service of Judicial Documents in Civil and Commercial Cases between the Hong Kong Special Administrative Region and the Macau Special Administrative Region came into effect in August 2020,  significantly accelerating the service of such judicial documents between two regions.

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.  The GOM in May 2020 enacted the New Arbitration Law, which unifies the laws governing domestic and international arbitration in Macau.  This arbitration reform incorporated best international practices with effective dispute resolution techniques for investment disputes, including the introduction of emergency arbitrator mechanism, limitation on rights of appeal, procedure for courts assistance in taking of evidence, recognition and enforcement of interim measures, and publication of 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 if 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 offenses 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.  In 2019, the GOM put forward an enhanced tax deduction for research and development (R&D) expenditure incurred for innovation and technology projects by companies whose registered capital reached MOP 1,000,000 (USD 125,000), or whose average taxable profits reached MOP 500,000 (USD 62,500) per year in three consecutive years.  The tax deduction amounts to 300 percent for the first MOP 3,000,000 (USD 375,000) of qualifying R&D expenditure and 200 percent for the remaining amount, subject to a limit of MOP 15,200,000 (USD 1.9 million) in total).  In addition, income received from Portuguese speaking countries is exempt from the corporate tax, provided such income has been subject to tax in its place of origin.

Two new laws to encourage financial leasing activities in Macau became effective in April 2019.  Under the new regime, the minimum capital requirement of a financial leasing company is reduced from USD 3.75 million to USD 1.25 million.  In addition, the acquisition by the financial leasing company of a property exclusively for its sole use has an exemption of up to USD 62,500 from a stamp duty.  Approved financial leasing companies can also be exempted from stamp duty for registration of initial and additional capital, interest and commission, and financial contracts.

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 the Economic and Technological Development Bureau (ETDB) 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 ETDB prior to importation of these commodities.

In order to promote the MICE (meetings, incentives, conventions, and exhibitions) and logistics industries in Macau, the GOM has accepted the ATA Carnet (Admission Temporaire/Temporary Admission), an international customs document providing an efficient method for the temporary import and re-export of goods that eases the way for foreign exhibitions and businesses.

The latest CEPA addition established principles of trade facilitation, including simplifying customs procedures, enhancing transparency, and strengthening cooperation.

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.  The Macau government adopts stringent foreign labor policies mandating that Macau residents receive priority in the hiring process so that their opportunities for work are not compromised by the importation of foreign workers.

Non-residents are approved to work in Macau only when employers are unable to find suitable candidates in the local labor market.  Employers who want to hire foreign labor must request a prior authorization from the Macau Labor Affairs Bureau and attest that the manpower provided by the non-resident workers is, according to the law, supplemental, provisional, secondary, and sustainable.  Critics of the Macau labor policies say the asymmetrical legal provisions in the hiring process between Macau residents and non-resident undermine the labor rights of the foreign worker on a practical level.  Applications for employing foreign workers are processed by the Macau Labor Affairs Bureau.

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 the destination ensures an adequate level of protection.

In December 2019, Macau’s Cybersecurity Law came into force.  Under this law, public and private network operators in certain industries must meet obligations, including providing real-time access to select network data to Macau authorities, with the stated aim of protecting the information network and computer systems.  For example, network operators must register and verify the identity of users before providing telecommunication services.  The new law creates new investment and operational costs for affected businesses and has raised some privacy and surveillance concerns.

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 ETDB uses an expedited prosecution arrangement to speed up punishment of accused retailers of pirated products.  The copyright protection law has been extended to cover online privacy.  Copyright infringement for trade or business purposes is subject to a fine or maximum imprisonment of four years.

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.  In 2020, Macau Customs seized a total of 3,849 pieces of counterfeit goods, including 705 garments, 187 leather products, and 513 electronic appliances.  In 2020, the ETDB filed a total of 13,475 applications for trademark registrations.

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 to take a greater role in promoting cooperation between companies from Portuguese-speaking countries.

Since 2010, the People’s Bank of China (PBoC) 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 and Macau.  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 an RMB clearing platform for trade settlement between China and Portuguese-speaking countries.  In December 2019, the PBoC canceled an existing quota of RMB 20,000 (USD 3,057) exchanged in Macau for each individual transaction.

Macau has no stock market, but Macau 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 12 life insurance companies and 13 non-life insurance companies in Macau.  For the first three quarters of 2020, total gross premium income from insurance services amounted to USD 6.0 billion.

In October 2018, the Legislative Assembly took steps to tackle cross-border tax evasion.  Offshore institutions in Macau and their tax benefits, including credit institutions, insurers, underwriters, and offshore trust management companies, were thoroughly abolished starting from January 1, 2021.  Decree 9/2012, in effect since October 2012, stipulates that banks must 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 in 2013, with banks paying an annual contribution of 0.05 percent of the amount of protected deposits held.  The deposit protection fund had MOP 486 million (USD 60.75 million) available by the end of 2018, according to the MMA.

Money and Banking System

The MMA functions as a de facto central bank.  It is responsible for maintaining the stability of Macau’s financial system and for managing its currency reserves and foreign assets.  At present, there are thirty-one financial institutions in Macau, including 12 local banks and 19 branches of banks incorporated outside Macau.  There is also a finance company with restrictive banking activities, two financial leasing companies and a non-bank credit institution dedicated to the issuance and management of electronic money stored value card services.  In addition, there are 11 moneychangers, two cash remittance companies, two financial intermediaries, six exchange counters, two payment service institutions, and two other financial institutions (one is a representative office).  The Bank of China (Macau) and Industrial and Commercial Bank of China (ICBC) are the two largest banks in Macau, with total assets of USD 79.8 billion and USD 33.9 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.  In 2019, the total assets of the banking sector amounted to USD 252 billion.  Total deposits amounted to USD 83.8 billion by the end of 2019.  In the fourth quarter of 2020, banks in Macau maintained a capital adequacy ratio of 14.5 percent, well above the minimum eight percent recommended by the Bank for International Settlements.  Accounting systems in Macau are consistent with international norms.

The MMA prohibits the city’s financial institutions, banks, and payment services from providing services to businesses issuing virtual currencies or tokens.  In December 2020, the MMA said it  is communicating with the People’s Bank of China (PBoC) about the feasibility of issuing digital currency in Macau.

Foreign Exchange and Remittances

Foreign Exchange

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, the 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 = 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 or 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.

A Memorandum of Understanding on anti-money laundering (AML) actions between MMA and PBoC, increased information exchanges between the two parties, as well as cooperation on onsite inspections of casino operations.  Furthermore, Macau’s terrorist asset-freezing law, which is based on United Nations (UN) Security Council resolutions, requires travelers entering or leaving with cash or other negotiable monetary instruments valued at MOP 120,000 (USD 15,000) or more to sign a declaration form and submit it to the Macau Customs Service.

In December 2019, the PBoC increased a daily limit set on the amount of RMB-denominated funds sent by Macau residents to personal accounts held in mainland China from RMB 50,000 (USD 6,250) to RMB 80,000 (USD 10,000).

Sovereign Wealth Funds

The International Monetary Fund (IMF) suggested in July 2014 that the GOM invest its large fiscal reserves through a fund modeled on sovereign wealth funds to protect the city’s economy from economic downturns.  In November 2015, the GOM decided to establish such a fund, called the MSAR Investment and Development Fund (MIDF), through a substantial allocation from the city’s ample fiscal reserves.  However, the GOM in 2019 withdrew a draft bill that proposed the use of USD 7.7 billion to seed the MIDF over public concerns about the government’s supervisory capability.

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 ten percent) in these government-affiliated enterprises.  The government set out in its Commercial Code the basic elements of a competition policy regarding commercial practices that can distort the proper functioning of markets.  Court cases related to anti-competitive behavior remain rare.

Privatization Program

The GOM has given no indication in recent years that it has plans for a privatization program.

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 did not put any restrictions on the qualifications of the potential bidders in the 2002 public tender of gaming concession.  Twenty-one companies, including those holding capital in Macau, Hong Kong, the U.S., Malaysia, Australia, United Kingdom, and Taiwan, submitted bidding papers, but the government eventually granted concessions to only three bidders: SJM, Wynn Macau, and Galaxy Entertainment Group.  Subsequently, another three casino operators, Sands China, MGM China Holdings, and Melco Resorts and Entertainment Ltd, were allowed into the market via sub-concessions spun off from the three original concessionaires selected in the 2002 public tender.  As all six gaming concessions and sub-concessionaires will expire by June 2022, the GOM is now revising the city’s gaming laws and plans to complete the task by the fourth quarter of 2021, before submitting a finalized draft bill to the Legislative Assembly.  One of the nine factors that the GOM will consider for the renewal of the gaming licenses is the casino operator’s CSR (corporate social responsibility) performance.  Unlike 2002, the GOM will likely require potential casino operators to increase their organization’s CSR efforts in Macau and to do more to facilitate Macau’s economic diversification.  In November 2019, the Business Awards of Macau presented the Gold Award to Galaxy Entertainment Group for its CSR initiatives.

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

Additional Resources 

Department of State

Department of Labor

Mainland China extended in February 2006 the United Nations Convention Against Corruption to Macau.  Macau has laws to combat corruption by public officials and the private sector.  Anti-corruption laws are applied in a non-discriminatory manner and effectively enforced.  One provision stipulates that anyone who offers a bribe to foreign public officials (including officials from mainland China, Hong Kong, and Taiwan) and officials of public international organizations in exchange for a trade deal could receive a jail term of up to three years or fines.

The CCAC is a member of the International Association of Anti-Corruption Authorities and a member of the Anti-Corruption Action Plan for Asia and the Pacific.  The CCAC’s guidelines on prevention and repression of corruption in the private sector and a booklet Corruption Prevention Tips for Private Companies provide rules of conduct that private companies must observe.  In January 2019, the GOM completed a public consultation on public procurement to create a legal framework through which the GOM will seek to promote an efficient and transparent regime.  The GOM expect a draft bill to be ready for public consultations in the second half of 2021.

Resources to Report Corruption

CHAN Tsz King, 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 enacted its own National Security Law (NSL) in 2009.  While human rights groups raised concerns at the time that the NSL’s “vague and broad provisions” would erode freedom of association and expression in Macau, the passage of the Macau NSL was not as controversial as the one in Hong Kong, and no one has been charged under the Macau NSL since its enactment in 2009.

Macau continues to enforce restrictions of admission and travel controls due to COVID-19 related concerns, including compulsory COVID testing and self-quarantine upon arrival.  As of March 16, 2021, foreign nationals from areas outside mainland China, Hong Kong, and Taiwan are still prohibited from entering Macau, though exceptions are in place for some foreigners related to Macau residents, students, and essential workers, or for select business or academic reasons.  Foreign nationals entering from mainland China will need to have been physically present in mainland China for 21 consecutive days before entering Macau.  The Macau government did not provide a timeline for re-opening the borders for foreign nationals apart from those from mainland China, Hong Kong, and Taiwan.

Since January 2020, U.S. citizens living in Macau have been unable to obtain in-person consular services due to ongoing COVID-19 restrictions mandated by the Macau government.  Mail-in services can be an acceptable alternative in certain situations but cannot replace services that require a personal appearance before a consular officer such as the issuance of citizenship documents for children born in Macau and renewals of minor/first-time adult passports.

Macau’s unemployment rate in the fourth quarter in 2020 was 2.7 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.  Taxi and bus drivers must also be local residents.  There is no such restriction imposed on any other sector of the economy.

Macau does not have any policies that waive labor laws 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 May 2020, the GOM amended the Labor Relations Law specifically to extend the minimum paid maternity leave period and introduce employer-paid paternity leave.   Under the new amendment, female employees are entitled to at least 70 days of maternity leave while fathers are entitled to five working days of employer-paid paternity leave.

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 the event of dismissal, with or without just cause, employees are entitled to compensation depending on the length of the employment relationship.  In addition, Macau’s social security system, which is regulated by Decree 84/89/M, provides local workers with economic aid when they are elderly, 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 Labor Relations Law does not contain provisions regarding collective bargaining, which is not common at the company or industry level.

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.

Effective November 1, 2020, Macau employees are protected by the universal minimum wage law which stipulates that the monthly salary of Macau employees must be at least MOP 6,656 (USD 832), with a minimum hourly wage of MOP 32 (USD 4).

Special note on COVID-19:  In May 2020, Macau imposed additional COVID entry restrictions to Blue Card holders (foreign workers holding non-resident work permits), effectively barring them from returning to Macau even if their Blue Card is still valid.

DFC 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) 2019 $54,299 2019 $53,859 https://data.worldbank.org/indicator/
Foreign Direct Investment Host Country Statistical source* USG or international statistical source USG or international Source of data:
BEA; IMF; Eurostat; UNCTAD, Other
U.S. FDI in partner country ($M USD, stock positions) 2018 $398 2019 $2,530 BEA data available at
Host country’s FDI in the United States ($M USD, stock positions) N/A N/A 2017 $17 BEA data available at
Total inbound stock of FDI as % host GDP 2019 79.7% 2019 71.7% UNCTAD data available at


* Source for Host Country Data: Macau Statistics and Census Service

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 42,808 100% Total Outward 3,972 100%
British Virgin Islands 11,057 26% China, P.R: Mainland 2,737 69%
China, P.R: Hong Kong 10,568 25% China, P.R: Hong Kong 1,258 32%
Cayman Island 9,974 23% Not Specified (including Confidential) 260 7%
China, P.R: Mainland 7,389 17% Philippines 17 0.4%
Portugal 1,214 3%
“0” reflects amounts rounded to +/- USD 500,000.
Table 4: Sources of Portfolio Investment
Portfolio Investment Assets
Top Five Partners (Millions, current US Dollars)
Total Equity Securities Total Debt Securities
All Countries 114,920 100% All Countries 37,354 100% All Countries 77,566 100%
China, P.R: Mainland 44,981 39% China, P.R: Mainland 14,085 38% China, P.R: Mainland 30,896 40%
China, P.R.: Hong Kong 14,663 13% China, P.R.: Hong Kong 7,098 19% British Virgin Islands 10,632 14%
British Virgin Islands 10,663 9% Cayman Islands 4,220 11% China, P.R.: Hong Kong 7,564 10%
United States 10,176 9% United States 4,061 11% United States 6,114 8%
Cayman Islands 10,098 9% Luxembourg 1,900 5% Cayman Islands 5,878 8%

Eveline Tseng, Consul, Economic Affairs
U.S. Consulate General Hong Kong and Macau
26 Garden Road, Central

2021 Investment Climate Statements: Macau
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