WONG WAI PAN Certified Public Accountant | CPA

繁 | 简 | ENG

Company Incorporation

Introduction

Local or foreign entities or individuals, which would like to set up a company in Macau, have the same legal responsibilities and apply the same application procedure. It takes just around 15 working days to set up a company through our firm for company incorporation. There is no capital verification in Macau and the company type is simple, which includes Unlimited Liability Company, Limited Liability Company, Sociedade Unipessoal Ltd, Mixed Liability Company, Limited Liability Company by quotas, Limited Liability Company by shares and offshore company.

Forms of Business Enterprises
Details are stated below:

   Individual Entrepreneur (E.I.) or Commercial Entrepreneur, natural person
　 This kind of business is exercised by one person using his own name or by his employees. He is wholly liable for all debts incurred in the business.

   Company or Commercial Entrepreneur, corporate body
　 The members of the company contribute either in capital or in industry for the company, practicing profit reverting economic activities back into the company and sharing the profit with the members.

   Economic Interest Group (A.I.E.)
　 Joining 2 or above companies without affecting their qualifications of legal person, aimed at promoting and developing each other’s economic activities or simply improving and expanding the economic activities of their companies.

Types of Business Enterprises
1 Unlimited liability Company
Formed by at least 2 members who have subsidiary responsibilities in relation to the company.

2 Mixed Liability Company
a) Mixed Liability Company by quotas:
Composed of unlimited liability partners as well as limited liability partners. Limited liability partners are only responsible for their share proportion. With no responsibility for any debts incurred by the company. On the other hand, unlimited liability partners are responsible for all debt of the company.

b) Mixed Liability Company by shares:
Limited liability shareholders acquire shares of the company and are only responsible for this amount, unlimited liability shareholders are responsible for all debt of the company.

3 Limited Liability Company by quotas:
This is the most common type of company set up in Macao, composed of a minimum 2 members are only responsible for their share proportion. With no responsibility for any debts incurred by the company.

4. Limited Liability Company by shares
A Limited Liability Company by shares has a share capital. Composed of at least 3 members, the shareholders are responsible only for the shares they owned, not for the debts of the company. The company is responsible for the debts in its total assets.

Herewith a summary of different companies in Macau:

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:

1. To use only non-Macao currency in their activities
2. To target only non-Macao residents as customers
3. To focus only on non-Macao markets

Procedures for setting-up a Commercial/Auxiliary Offshore Institution

1. Submit an offshore application form and investment plan to IPIM for assessment
2. After the application is approved, the investor has to register the offshore institution , and complete other procedures according to commercial laws of Macao SAR
3. 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:

1. Hardware consultant
2. Software consultant
3. Data processing
4. Database related activities
5. Back offices activities
6. Research and development activities
7. Tests and technical analysis activities
8. Management and administration of ships and aircraft
9. 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 :

Registered Capital:	Offshore Commercial Service Institution	Offshore Auxiliary Service Institution
MOP 25,000 to MOP 100,000	MOP 5,000	MOP 3,000
MOP 100,001 to MOP 1,000,000	MOP 10,000	MOP 6,500
MOP 1,000,001 or above	MOP15,000	MOP 10,000

Promulgation of Law no. 15/2018 < Repeal of the legal regime of the offshore services >

Law no. 15/2018 has been published in the Official Gazette of the Macao Special Administrative Region on 27-December-2018.

The Offshore Regime of Macao was in force for 19 years. Addressing economic globalisation, Macao works in response to the appeal of international organisations to take all possible measures to rule out cross-border tax evasion, base erosion and profit shifting, while proactively improving transparency in taxation and tax fairness, optimising relevant taxation systems to meet international standards. In order to synchronise with the socioeconomic development and respond to international collaboration, the city shall timely repeal the Offshore Regime of Macao.

The captioned law terminates the application of offshore licences, fixes the enforcement date of the repeal of the Offshore Regime, and introduces a number of facilitations, which mainly include that the existing Macao offshore institutions are still entitled to the income tax exemption until 31 December 2020, except for the profits arising from intellectual properties which are under specific regulations.

In addition, the Law encourages offshore institutions to continue their development in Macao by expanding/amending their businesses or changing their company names after their offshore licences expire.

Please see details in the following link of https://www.ipim.gov.mo/en/services/offshore-service/repeal-of-the-legal-regime-of-the-offshore-service/.