Hengqin cooperation zone | Companies eligible for up to RMB5.5m support when issuing bonds in Macau

Companies operating in the Hengqin Guangdong-Macau Intensive Cooperation Zone will be eligible for a financial subsidy of up to RMB5.5 million when issuing bonds in Macau. This was announced yesterday by the Executive Committee of the Zone, as reported on Chinese financial website “Securities Times.”

According to the report, law firms, accountancy firms, credit rating agencies, and rating agencies for green bonds, among others, that establish themselves in Hengqin and provide services in the zone can benefit from RMB100,000 each time they issue bonds in Macau.

To be eligible, companies must also issue a total amount of at least MOP500 million, attracting a subsidy of 0.8% of the funds raised.

This financial support measure is said to encourage the use of the Macau bond market, aiming for direct financing as well as reducing the cost of issuing corporate bonds in Macau. The government reportedly hopes that companies will preferentially choose to issue bonds in Macau, increasing activity on the local bond market.

All of these bonds will be settled by the recently launched Central Securities Depository System (CSD), a mechanism begun to strengthen the integration of Macau’s financial market with overseas markets.

Issuers of green bonds can benefit further, as they can be granted an additional RMB500,000 of external review fee funds.

The measures will be implemented on March 1 next year and will be in force for one year, with applications and guidelines governed by the Financial Development Bureau of the Cooperation Zone.

QFLP to provide another financial boost

Another financial boost to be launched in the zone from the end of January next year is a scheme to attract foreign investors to Macau, under which they use the city as a base for investment in mainland start-ups and other projects.

From January 29, the Qualified Foreign Limited Partnership (QFLP) scheme will allow foreign investors to set up funds in the Macau-Hengqin zone and raise money from both domestic and foreign investors, according to a statement issued yesterday by the joint management committee of Macau and Hengqin.

The plan follows the same logic of promoting Macau as a financial services hub, in line with the master plan launched in September allowing Macau to take part in governing the economic affairs of neighboring Hengqin.

“The new scheme represents an important step supporting the development of Macau’s financial services industry,” the statement said.

The QFLP scheme is the latest policy put forward by central authorities aimed at diversifying Macau’s economy.