Making an investment in Hengqin, Guangdong – Preferential Tax Insurance policies


The Hengqin New House of Zhuhai town in Guangdong is striving to broaden high-tech and trendy products and services industries and deepen integration with neighboring Macao. To reach this, the native govt has rolled out a spread of preferential tax insurance policies to draw firms and extremely professional skill to the world. We speak about the preferential tax insurance policies to be had and which firms and people are eligible to revel in them.

Hengqin New House is a small island to the west of Macao and a district of Zhuhai Town in Guangdong. The 106-square-kilometer island used to be integrated into the Zhuhai Particular Financial Zone in 2009, with the intention to broaden the island’s financial system via centered enlargement insurance policies. 

The island has since develop into a key space for the advance of strategic and rising industries, comparable to high-tech, finance, and complex production, amongst others. It is usually a very powerful trying out floor for cooperation between Macao and Guangdong province.  

In 2021, the federal government launched a building plan for the Guangdong-Macao In-Intensity Cooperation Zone in Hengqin (the “Hengqin Cooperation Zone”), a space masking everything of the island, which seeks to deepen ties between Macao and Guangdong and broaden key industries within the area. 

As a part of this plan, the native govt has carried out a sequence of preferential tax insurance policies for firms and ability within the space. Those come with discounts to company source of revenue tax (CIT) for firms in 150 industries and particular person source of revenue tax (IIT) discounts and waivers for knowledgeable, in-demand skill, and Macao citizens. 

On this article, we offer an summary of the Hengqin Cooperation Zone and speak about the preferential tax insurance policies to be had to firms and folks. 

Review of Hengqin New House 

Hengqin New House is attached to Macao via a sequence of bridges and ferry hyperlinks, and to the mainland portion of Zhuhai through bridge and the Zhuhai metro. The Hengqin extension line of the Macao Gentle Speedy Transit, which can attach Macao and Hengqin, is lately below development and is ready to open in 2025. Shipping from Macao to Hengqin takes roughly half-hour, and many of us go back and forth each day for paintings in Hengqin. 

Hengqin New House’s GDP grew 8.5 p.c in 2021, achieving RMB 45.463 billion (US$6.8 billion), accounting for 11.7 p.c of all of the GDP of Zhuhai. The native financial system of Hengqin is ruled through the products and services sector, which accounted for 86.7 p.c of native GDP in 2021. That is considerably upper than the contribution of the products and services sector to Zhuhai’s general financial system, which stood at 56.7 p.c of GDP in 2021. The one biggest business through financial contribution in Hengqin is finance, which accounted for 35.6 p.c of native GDP in 2021, adopted through actual property, which accounted for 15.9 p.c of GDP.



Building of Hengqin Cooperation Zone 

The Hengqin Cooperation Zone, which used to be first introduced in 2019, targets to create a synergistic courting between Macao and Hengqin through facilitating industry, industry, and the motion of folks around the borders. The zone may even function a take a look at zone for the combination of the 2 areas below the “One Nation, Two Programs” coverage.  

The Masterplan for the Building of the Hengqin Guangdong-Macao Deep Cooperation Zone (the “Building Plan”), launched in September 2021, is lately the primary blueprint in position for the advance of the world. It outlines quite a lot of objectives and preferential insurance policies for incentivizing companies to arrange within the Hengqin Cooperation Zone and for attracting skill.

To find Trade Beef up

The Hengqin Cooperation Zone additionally acts as a way for diversifying Macao’s financial system, which continues to be extremely reliant on gaming and tourism and is subsequently susceptible to exterior disruption. The Building Plan targets to broaden a huge vary of carrier industries, together with science and era R&D, high-end production, and high-tech in addition to rising industries, comparable to built-in circuits (IC), digital elements, new fabrics, new power, giant knowledge, synthetic intelligence (AI), Web of Issues (IoT), and biomedicine. Different key industries for building are conventional Chinese language medication, tourism, sports activities, exhibitions, recreational, and trendy finance. 

The federal government hopes to raised leverage Hengqin’s robust products and services industries and place the zone as a strategic bridge between Macao and the Chinese language mainland to broaden Macao’s financial system and extra open Hengqin to the out of doors international. 

Preferential tax insurance policies within the Hengqin Cooperation Zone 

In Might 2022, the Ministry of Finance (MOF) and State Tax Management (STA) launched a sequence of preferential tax insurance policies (Yue Caishui [2022] No. 19) for firms based totally in and putting in place within the Hengqin Cooperation Zone. 

The next preferential tax insurance policies are carried out retroactively from January 1, 2021, and no expiry date is equipped. Analysts consider this can be a signal that those incentives will probably be in position for a very long time. 

Decreased 15 p.c CIT 

Certified business firms positioned within the Hengqin Cooperation Zone can revel in a discounted 15 p.c CIT fee (the usual CIT fee in China is 25 p.c).  

To be eligible for the IIT coverage, the skill should paintings in one of the vital industries indexed within the Catalogue of Inspired Industries within the Hengqin Guangdong-Macao In-Intensity Cooperation Zone.  {The catalogue} comprises 185 sectors in general around the following classes:

  • Generation R&D and high-end production (70 sectors);
  • Macanese industries comparable to Chinese language conventional medication (24 sectors);
  • Tradition, tourism, exhibition, and industry and industry (59 sectors);
  • Fashionable finance (16 sectors); and
  • Different (16 sectors).

For firms which are headquartered within the Hengqin Cooperation Zone, the 15 p.c preferential CIT coverage simplest applies to the source of revenue derived through the headquarters and any eligible subsidiaries which are additionally positioned throughout the zone. For firms which are headquartered in different places, the preferential CIT coverage simplest applies to the eligible subsidiaries which are positioned throughout the zone.

Waiver for CIT on new ODI source of revenue in tourism, trendy products and services, and high-tech

The source of revenue derived from new in a foreign country direct funding (ODI) from firms established within the Hengqin Cooperation Zone within the tourism business, trendy products and services business, and the high-tech business can also be exempted from CIT. To be eligible, the source of revenue from new ODI should meet the next standards: 

  1. It’s made up of working earnings derived from newly established in a foreign country branches, or dividend source of revenue comparable to the newly greater ODI when it comes to repatriation from in a foreign country subsidiaries with a shareholding ratio of 20 p.c or above. 
  2. The statutory CIT fee of the rustic or area wherein the in a foreign country subsidiaries are positioned is a minimum of 5 p.c. 
  3. Preferential tax remedy for the acquisition of fastened and intangible belongings.

Newly bought fastened belongings (instead of properties and constructions) or intangible belongings with a unit worth of as much as RMB 5 million (US$743,516) can also be deducted from the taxable source of revenue on a one-off foundation. 

As well as, depreciation and amortization are not calculated once a year. Corporations can shorten the depreciation and amortization duration for newly bought fastened or intangible belongings with a unit worth of over RMB 5 million, or undertake an sped up depreciation and amortization means. 

Preferential IIT insurance policies 

In January 2022, the MOF and STA launched Preferential Person Source of revenue Tax Insurance policies for the Hengqin Guangdong-Macao Deep Cooperation Zone, detailing the implementation of IIT insurance policies for skill within the Hengqin Cooperation Zone first offered within the Building Plan. 

Each home and overseas high-end skill this is in call for within the Hengqin Cooperation Zone is eligible for an IIT waiver for the portion of the tax burden on over 15 p.c in their source of revenue. 

The brief catalogue of in-demand skill (to be had for obtain right here in Chinese language) in Hengqin comprises: 

  • Generation R&D and high-end production industries, together with professional skill operating in core and control roles in IC and semiconductors, web, IoT, telecommunications, giant knowledge, AI, new fabrics, new power, and biomedicine. 
  • Professional skill operating in core and control roles in tradition, sports activities, tourism, exhibitions, industry, and industry. 
  • Fashionable monetary business. 
  • Industries facilitating the livelihoods and employment of Macao citizens. 
  • Different industries which are in brief provide of professional skills, comparable to the ones hired through govt businesses, establishments and statutory our bodies, and social organizations. 

In the meantime, for citizens of Macao that paintings in Hengqin, the portion in their tax burden within the Hengqin Cooperation Zone this is in far more than Macao requirements is exempt from IIT.

Comparable Studying

The source of revenue this is eligible for those two preferential insurance policies comprises complete source of revenue from the cooperation zone (together with wages and salaries, hard work remuneration, creator’s remuneration, and royalties), industry source of revenue, and backed source of revenue for skills identified through the native govt. 

Citizens operating within the cooperation zone can benefit from the above preferential insurance policies when dealing with the yearly IIT agreement. 

Those insurance policies will probably be carried out from January 1, 2021 to December 31, 2025. 

Making use of for preferential tax insurance policies 

Drawing from the revel in of different areas with preferential tax insurance policies, such because the Hainan Loose Industry Port, government are fairly strict with regards to comparing whether or not an organization has a considerable presence within the area with the intention to be eligible for the advantages. Corporations are subsequently prompt to start out documenting the considered necessary data on operations, staff, accounting, belongings, and different elements that can assist to end up their presence within the zone on the earliest time imaginable. 

The appliance duration for the 2021 preferential IIT insurance policies used to be February 2022, and the applying duration for 2022 – anticipated to open in early 2023 – is but to be introduced. For the skill eligibility necessities, see our article right here. The up to date necessities for the 2022 utility are but to be launched.

For more info at the preferential insurance policies to be had to firms and folks in Hengqin, you’ll touch our on-the-ground tax professionals through emailing

This newsletter used to be firstly printed on July 13, 2022, and remaining up to date on April 17, 2023.

About Us

China Briefing is written and produced through Dezan Shira & Mates. The apply assists overseas traders into China and has accomplished so since 1992 via places of work in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please touch the company for help in China at

Dezan Shira & Mates has places of work in Vietnam, Indonesia, Singapore, United States, Germany, Italy, India, and Russia, along with our industry analysis amenities alongside the Belt & Highway Initiative. We even have spouse corporations aiding overseas traders in The Philippines, Malaysia, Thailand, Bangladesh.




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