Basic Requirements for Operating Offshore Service Business
Firstly, an investor has to obtain the approval from IPIM, in order to operate an offshore service business in Macao SAR. To operate an offshore service business, the investor has to abide by the following rules:
To use only non-Macao currency in their activities
To target only non-Macao residents as customers
To focus only on non-Macao markets
Procedures for setting-up a Commercial/Auxiliary Offshore Institution
Submit an offshore application form and investment plan to IPIM for assessment
After the application is approved, the investor has to register the offshore institution , and complete other procedures according to commercial laws of Macao SAR
The offshore institution can provide offshore services only after it had completed all the steps and procedures.
The audit of an offshore institution’s accounts must be done by an auditor or auditing company registered with the Registered Auditors and Accountants Committee. The annual accounting and audit reports must be submitted to IPIM.
Tax Incentives for Operating Offshore Service Business
The offshore institution is exempted from all the following taxes; profit tax, industrial tax, and stamp duties. In addition, the offshore institution’s managers and specialized technicians (non-Macao residents), authorized to reside in Macao SAR, are exempted from professional tax for the first three years of their employment at the offshore institution.
How to Set-Up an Offshore Institution
An offshore institution has consist of at least one shareholder and one director. An individual or corporation can be shareholder or director. However, if the director is a corporation, this corporation has to appoint a person to carry out the director’s duties.
Types and Structures of Offshore Institution
There are two types of offshore institutions: offshore commercial service institution (also known as International Business Company – IBC) and offshore auxiliary service institution . An offshore commercial service institution can provide services to any third party. It is not limited to the holding company. However, an offshore auxiliary service institution can only provide services to the parent company/companies.
Range of Offshore Service Businesses
An offshore institution may operate one or more of the following offshore services:
Database related activities
Back offices activities
Research and development activities
Tests and technical analysis activities
Management and administration of ships and aircraft
Trade in goods and services between China and Portuguese-speaking countries
According to the Decree-Law no. 58/99/M Offshore Law, offshore company register in Macau, would be restricted by this law, and it is suitable for use of the adopted Commercial Law in business operation which include filing documents and bookkeeping.
In accordance with the Commercial Code Article 49 and Article 252, there are restrictions for the keeping books, a commercial entrepreneur shall keep the books, correspondence, documentation and other items recording the exercise of his enterprise, duly ordered, for 5 years from the last entry made in the books in Macau
According to the Commercial Code Article 46, value amounts can be denominated in any currency, provided that they are also denominated in patacas if there is a serious interest in doing so. The financial report render every year should also follow this article.
Fees for Operating Offshore Institution
An offshore institution which has been authorized to operate in Macao SAR must pay IPIM a set-up fee of MOP5, 000 (a one-time fee) and an operating fee every six months. These range from MOP5, 000 to MOP15, 000 (these only apply to the offshore commercial service institutions), or MOP3, 000 to MOP10, 000 (these only apply to the offshore auxiliary service institutions). Those charges are comparatively favorable than other places or countries.
Operating Fees for Offshore Institutions are as follows :