The Greater Bay Area and Macau’s Strategic Role

What is the Greater Bay Area?

The Guangdong-Hong Kong-Macao Greater Bay Area (GBA) is a dynamic region comprising two Special Administrative Regions (Hong Kong and Macau) and nine cities in Guangdong Province: Guangzhou, Shenzhen, Zhuhai, Foshan, Huizhou, Dongguan, Zhongshan, Jiangmen, and Zhaoqing. Covering 56,000 square kilometers and home to over 70 million people, the GBA is one of the most open and economically vibrant regions in China.

The Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area aims to deepen regional cooperation, promote economic integration, and develop the GBA into a world-class bay area ideal for living, working, and traveling.

Macau’s Strategic Positioning in the Greater Bay Area

Macau plays a pivotal role in the GBA, leveraging its unique advantages to contribute to regional development. The city’s strategic positioning is outlined in both the Five-Year Development Plan of the Macao Special Administrative Region (2016-2020) and the national “13th Five-Year Plan.” Key roles include:

1. World Tourism and Leisure Centre: Macau is positioned as a global hub for tourism and leisure, capitalizing on its rich cultural heritage, world-class entertainment, and thriving hospitality industry.
2. Commercial and Trade Cooperation Service Platform: Macau serves as a bridge between China and Portuguese-speaking countries, fostering economic and cultural exchanges.
3. Cultural Exchange Base: With its unique blend of Chinese and Western cultures, Macau promotes multicultural cooperation, aligning with the Belt and Road Initiative.

Macau’s Advantages in the Greater Bay Area

Macau’s unique characteristics and strengths make it a key player in the GBA:

1. Gateway to Portuguese-Speaking Countries:
   • Macau’s historical ties with Portuguese-speaking nations (e.g., Brazil, Mozambique, Portugal) enable it to act as a platform for trade, investment, and cultural exchange.
   • Initiatives like the Forum for Economic and Trade Co-operation between China and Portuguese-speaking Countries and the Renminbi (RMB) Clearing Centre strengthen Macau’s role in facilitating international business.
2. Cultural and Tourism Hub:
   • Macau’s UNESCO-listed Historic Centreand vibrant festivals (e.g., Macau Grand Prix, International Fireworks Display Contest) attract millions of visitors annually.
   • The city’s gaming and entertainment industries drive growth in hospitality, conventions, and exhibitions.
3. Harmonious Social Environment:
   • Macau’s blend of Chinese and Western cultures fosters a tolerant and inclusive society, making it an attractive destination for international visitors and investors.
4. Strategic Location and Infrastructure:
   • The Hong Kong-Zhuhai-Macao Bridge and future projects like the Qingmao Checkpoint enhance connectivity within the GBA, facilitating trade and tourism.

Legal Services and Double Taxation Agreements

Macau’s robust legal framework and international agreements make it an ideal location for businesses. Key legal advantages include:

1. Double Taxation Agreements (DTAs):
   • Macau has signed double taxation agreements with several countries, including:
     • China: Avoids double taxation on income and capital gains, facilitating cross-border investments.
     • Portugal: Enhances trade and investment flows between Macau and Portuguese-speaking countries.
     • Mozambique: Promotes economic cooperation and reduces tax burdens for businesses operating in both regions.
   • These agreements provide tax certainty, reduce withholding taxes, and prevent fiscal evasion, making Macau a strategic hub for international business.
2. Other Jurisdictions:
   • Macau is actively expanding its network of DTAs to include other key trading partners, further enhancing its appeal as a global business hub.

Why Set Up a Venture in Macau as a Holding Company for Greater China?

Macau offers unique advantages for businesses looking to establish a holding company for Greater China:

1. Tax Efficiency:
   • Macau’s low corporate tax rate (up to 12%) and tax incentives for specific industries make it a cost-effective location for holding companies.
   • The absence of capital gains tax and inheritance tax further enhances its appeal.
2. Strategic Location:
   • Macau’s proximity to mainland China, Hong Kong, and other GBA cities provides seamless access to one of the world’s largest consumer markets.
3. Access to Portuguese-Speaking Markets:
   • As a platform for trade and investment between China and Portuguese-speaking countries, Macau offers unparalleled opportunities for businesses looking to expand globally.
4. Robust Legal Framework:
   • Macau’s legal system, based on Portuguese civil law, provides a stable and predictable environment for business operations.

Incentives for Raising Capital in Macau

Macau offers several incentives to attract investment and facilitate capital raising:

1. Financial Support Programs:
   • The Macau government provides grants, subsidies, and low-interest loans to support startups, SMEs, and innovative projects.
2. Free Trade Zones:
   • The Hengqin Free Trade Zone offers preferential policies, including tax exemptions and simplified customs procedures, for businesses operating in the GBA.
3. Investment Funds:
   • Macau’s China and Portuguese-speaking Countries Cooperation and Development Fund provides financing for projects in infrastructure, energy, and technology.
4. Capital Market Access:
   • Macau is developing its financial sector, including plans for a Renminbi (RMB) securities market and green finance platforms, to attract international investors.
5. Innovation and Technology Incentives:
   • Macau’s State Key Laboratories and innovation hubs offer funding and resources for research and development in areas like traditional Chinese medicine, biomedicine, and integrated circuit design.

Macau’s Role in the Greater Bay Area by the Numbers

Conclusion

As a vital part of the Greater Bay Area, Macau is uniquely positioned to leverage its cultural, economic, and strategic advantages to drive regional growth. By embracing its roles as a tourism hub, trade platform, and cultural exchange base, Macau is poised to achieve sustainable development and contribute to the GBA’s vision of becoming a world-class bay area.

For businesses, Macau’s favourable tax regime, double taxation agreements, and incentives for raising capital make it an ideal location for establishing a holding company or expanding into Greater China.

If you would like to know more contact us today.

Other resources:

GBA Statistical Data