Gov’t pledges to support companies affected by new offshore regulations

New offshore regulations are raising concerns in an industry that employs around 1,700 workers in 360 companies.

The Executive Council (ExCo) recently concluded their analysis of the new regime which will abolish existing regulations for offshore companies. The new rules will follow guidelines issued by the Organization for Economic Co-operation and Development. Offshore institutions will only be allowed to have special tax-free status and stamp duty exemptions until June 2021.

The Macao Trade and Investment Promotion Institute (IPIM) is now establishing a “one-stop” service to provide support and information to the affected companies in collaboration with the Labour Affairs Bureau (DSAL).

According to a statement from IPIM, the “one-stop” service aims to help institutions “transform themselves into general enterprises in Macau, continuing to run business and recruit workers in the territory and, therefore, intensifying their development in Macau.”
IPIM also notes that during the transition period (which ends December 31, 2020), “the institutions can adjust their [business] plans in order to meet the needs of their businesses.” It plans to facilitate bureaucratic affairs and create a series of tax exemptions so companies can transition during the period established by the new law.

The institute also pointed out the bill is still waiting to be discussed and approved by the Legislative Assembly, noting that “although these entities will not see their activities exempted of taxation after the transition period, the taxation in Macau is still lower than the neighboring regions,” a fact which, in their opinion, should continue to attract companies to stay and continue doing business in Macau.

Furthermore, IPIM, together with another institution, has conducted several studies regarding offshore regulations in Macau. Besides the abolishment of the current offshore regime, other proposals were considered,” IPIM stated. However, “a final decision was made to abolish the legal regime.”