jlls macau 2012 propert guide

7/29/2019 JLLS Macau 2012 Propert Guide

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2012

Macau PropertyInvestment Guide


2/5Macau Property Investment Guide 2012

Property Tenure/Ownership

The Macau government grants the use of either new land that is

reclaimed or existing land that is vacant through a contract called

Land Concession Agreement.

The Land Concession Agreement is basically a lease and is

published in the Ofcial Gazette of Macau Government.

Once the land is granted to a developer, the developer undertakes

the obligation to, within a certain period, effectively develop the

land that is being granted. Therefore, initially, the land concession

is provisional and only upon completion of the development it

becomes denitive.

In accordance with the Land Concession Agreement, the developermust pay to the Macau government an annual rent in addition to

the premium, which is payable upfront or in installments over a

period not exceeding three years. From the moment the buildings

are completed and in the situation where third parties purchase

ownership rights over the properties built on the land, all registered

property owners divide the rent.

Title to the land through the Land Concession Agreement is

registered in the Land and Building Registration Department of

MSAR.

All ownership rights over the properties (being strata title for

residential units or full ownership of any building or fraction

thereof) are also registered with the Land and Building Registration

Department and fall under a full private ownership regime.

The land concession is granted for an initial term not exceeding 25

years, and it is renewable, ad innitum, for successive terms of ten

years. Applications for the renewal of the land concession can be

led by any proprietor, co-owner or mortgagee, or any other person

having an interest either in the land in a building or unit built on the

said land and registered as such.

All ownership titles arising out of the Land Concession Agreement

are subject to registration (which is publicly available) with the Land

and Building Registration Department.

The individual strata title rights on any building or unit under any

Land Concession Agreement may constitute the object of private

ownership, mortgage, and sale-and-purchase agreements on similar

terms to any full ownership rights over real estate built on privately

owned land.

Major Property Legislation

Operational Requirements for Foreign Corporations

Modes of Entry

Generally there are no restrictions in setting up a company in Macau

in terms of residency requirements for shareholders and directors as

well as in the companys scope of business.

The different steps to incorporate a company in Macau involve (i)

obtaining approval for a trade name; (ii) executing the company

establishment or incorporation deed; (iii) registering the company

with the Macau Commercial and Moveable Assets Registry; and (iv)

registering with the Macau Finance Bureau through the declaration

of commencement of operation (M1 form).

Registration/Licensing Requirements/Types of

Commercial Entities

Generally, there is no restriction on the type of business that can

be set up in Macau, but like in other jurisdictions, some types of

businesses have to apply for special licenses/concessions from the

government (e.g., banks, nance companies, insurance companies,

and gaming operations).

In order to do business in Macau, foreign entities can incorporate a

Macau company, register a branch, or on a non-permanent basis,

simply register with the Macau Finance Bureau if they are providing

services to a Macau entity under a contractual arrangement.

The forms of commercial entities are:

Single-person enterprise

Companies

Economic interest groups

A single-person enterprise corresponds to the concept of sole

proprietorship. In this form of business, an individual operates

business under his name and is fully liable for all debts and

obligations incurred in the business. The single person enterprise

is subject to registration with the Macau Commercial and Moveable

Assets Registry.

Macau CivilCode

Articles 1264 to 1312Articles 1313 to 1372

Articles 865 to 932

Ownership RightHorizontal Property (stratatitle) Regime

Sale and Purchase Contract

Land Law Law 6/80/M, July 5

MACAU


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MACAU

The Macau Commercial Code foresees unlimited and limited liability

companies. The most common forms of corporate entities are

limited companies incorporated by quotas (private companies) and

limited companies incorporated by shares (public companies).

An economic interest group associates two or more companies in

order to facilitate or develop their economic activity and to improve

or increase the results of such activity, without affecting each

participants legal personality.

Foreign Employment Limitations

Non-Macau residents must apply for a work permit to be able to

work in Macau or to be employed by a Macau entity.

There is a specic procedure to obtain an investment residency,

which will provide the applicant with a temporary residency ID card

on what respects managerial personnel, technical and professional

qualication holders, and major investors and investments plans.

This procedure runs through the Macau Trade and Investment

Promotion Institute (IPIM). Please check www.ipim.gov.mo for more

information.

The temporary residency applications for xed assets purchases

(e.g., real estate) have been suspended since 2007.

Investment Incentives

For foreign investment projects that promote economic

diversication, contribute to the promotion of exports to new

markets, add value to the economy, and contribute to technological

modernization, there are scal incentives available.

Major tax incentives available to investors include:

Total exemption of Property Tax granted for real estate purchases

for industrial purposes

Partial exemption of up to ve years in Macau and ten years

on Taipa and Coloane for new real estate rented for industrial

purposes

50% reduction of Industrial Tax for businesses located on Taipa orColoane

50% reduction of Complementary Tax

Imported new vehicles to be used by Hotels and Travel Agencies

are exempted from Vehicles Tax.

There are also nancial incentives and refundable and non-

refundable subsidies for investment projects, which are granted on

a case-by-case basis and contemplate mainly projects that address

the diversication of the economy, environmental protection,

technology innovation, new products, and anti-pollution equipment.

Restrictions on Foreign Property Ownership

There are no restrictions on foreign property ownership in Macau.

Foreign Exchange Controls

As a free port and a separate tariff zone, which has no foreignexchange controls, Macau is an active player in the regional

economy and a vital link between mainland China and global

markets.

Limited companies byquotas (Sociedades

por Quotas)

From 2*30shareholders

Minimum sharecapital of

MOP 25,000.00

Limited companies byshares

At least 3shareholders

Minimum sharecapital of

MOP 1,000,000.00

* It is possible to incorporate a Limited Company by quotas with one (1)single shareholder under a specic regime.


4/5Macau Property Investment Guide 2012

DESIGNATION INCIDENCE

Property Tax For leased property, tax is levied at 16% on the net rental income.

Tax is levied at 10% for property with an annual rental amount below the assessable rental value and non-leasedproperties.

Industrial Tax Charged on all individuals and companies engaged in any commercial or industrial business. It is a xed annual feeand varies according to the nature of the business. The usual charge is MOP 300 (USD 37.50).

Complementary (corporateincome or prot) Tax

Levied on corporate net prot derived from any commercial or industrial business.

Sliding scale tax varying between 3% and 12%:

Corporate prot up to MOP 32, 000 is exempted.

From MOP 32, 001 up to MOP 65, 000 3%

From MOP 65, 001 up to MOP 100, 000 5%

From MOP 100, 001 up to MOP 200, 000 7%From MOP 200, 001 up to MOP 300, 000 9%

Above MOP 300, 000 12%

Professional Tax Levied on individuals with an annual income in excess of MOP 120,000 at rates varying between 7% and 12%,applicable to employees receiving daily wages and monthly salary as well as self-employed professionals (e.g.,lawyers, medical doctors, accountants, and consultants).

Stamp Duty Stamp duty is generally payable on the documents related to transactions involving immovable property, includingall sales and sub-sales, mortgages, and leases of such property. This applies to all types of property, bothresidential and non-residential and regardless of whether the property is complete or incomplete.

Real estate:

Stamp duty is charged on the sale-and-purchase agreement and is payable by the purchaser.

The transfer of property worth up to MOP 2 million is subject to 1% stamp duty, 2% stamp duty on property worth

between MOP 2 million and 4 million, and 3% stamp duty on property worth over MOP4 million. Free transfer ofproperty or registered assets and rights worth over MOP 50, 000 are subject to a standard rate of 5%. A 0.5%stamp duty is levied on the intermediate transfer of property.

In 2011 (Law 6/2011), a special stamp duty was imposed on the seller for transfers of real estate for residentialpurposes aimed at cooling down the property market and speculation:

20% if the transfer of ownership occurs within one year from the date the property was purchased and 10% withinthe second year.

Leases:

Stamp duty is also charged on the lease instrument. The stamp duty is payable by the lessor based on the rentalfor the entire length of the lease. The rate of stamp duty is 5%.

Tourism Tax Levied on services provided by hotels, restaurants, and bars corresponding to 5% of the price of the servicesprovided.

Social Security Contributions The monthly contribution made by the employer is MOP 30 (USD 3.75) per resident employee and MOP 45 (USD5.63) per non-resident employee.

Summary of Tax Regime


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2012 Jones Lang LaSalle. All rights reserved.

All information contained herein is intended as guide only and does not constitute advice. It does not constitute any offer or part of any contract f or sale, lease or otherwise. All details are approximate and have not been independently veried.

Users should make their own enquiries to verify and satisfy themselves of all aspects of the information (including without limitation, any income, rentals, dimensions, areas, zoning and permits). While the information has been prepared in

good faith and with due care, no representations or warranties are made (express or implied) as to the accuracy, currency, completeness, suitability or otherwise of such information. Jones Lang LaSalle, its ofcers, employees, subcontractors,

agents and clients shall not be liable to any person for any loss, liability, damage or expense arising directly or indirectly from or connected in any way with any use or reliance on such information. The whole or any part of this document must

not be reproduced without written consent from Jones Lang LaSalle.

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jlls macau 2012 propert guide

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