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What is
CEPA about?
- "Closer Economic Partnership Agreement" between Hong Kong and Mainland China
- Effective from 01/January/2004
- Significant Mainland China markets liberalization (for goods and services)
- Preferential access to Mainland China's market from Hong Kong
- Offers better deal than China's WTO commitments
- Strengthens Hong Kong as your platform for Mainland China businesses |
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What does it mean?
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- Zero tariffs on 90% of Hong Kong exports to China
- Faster/easier market access for more than 30
service sectors
- Lower entry thresholds for smaller players (capital/trading history
requirements)
- 100% ownership of many China ventures
- Makes Hong Kong the simplest, most profitable route into/out of
Mainland China
- Manufacturers in China able to use Hong Kong services |
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Who Qualifies?
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Service Providers (in 18 CEPA-Eligible areas):
- Company must be incorporated in Hong Kong
- Doing business in Hong Kong for past 3-5 years
- Liable for Hong Kong profits tax
- Employing 50% of staff locally
- Any nationality of company can be eligible
Manufacturers / Distributors of goods (273 categories of goods covered):
- Goods must qualify as "Made in Hong Kong"
- Not necessary for company to be based in Hong Kong
- To qualify, goods must be "substantially transformed" - 30% of value must be added in Hong Kong (includes R&D, design costs) |
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How can Overseas Companies take Advantages?
Service Companies:
Partner with, invest in, or buy into a CEPA-Qualified firm in Hong
Kong.
Manufacturers or Traders of goods:
Partner with, or outsource to, a Hong Kong manufacturer (no need
to be based in Hong Kong) |
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