Macao Offshore Institution

On October 13, 1999, just 61 days before the hand-over of Macao from Portugal to China, the then Governor, Vasco Rocha Vieira, signed and approved the “Offshore Law” of Macao, which became effective from November 1, 1999. The law provides the regulation of offshore financial business and offshore non-financial business, mainly through the creation of the Offshore Institution permit.

Legal form: A Macao corporation is a company registered under the Commercial Code of Macao which is either: an unlimited liability company, a mixed liability company by “Quotas”, a mixed liability company by shares, a limited liability company by “Quotas”, a limited liability company by “sole owner”, a limited liability company by shares.

The most common type of company used for Offshore Institution is Macao registered Limited Liability Company or company incorporated elsewhere which may qualify to become Offshore Institution as per Macao regulations.

There are two types of offshore institutions: offshore commercial service institution (also known as International Business Company - IBC) and offshore auxiliary service institution. An offshore commercial service institution can provide services to any third party. It is not limited to the holding company. However, an offshore auxiliary service institution can only provide services to the parent company/companies.

Scope of Business: The Offshore Law regulates companies involved in offshore commercial or auxiliary services, as well as offshore financial services including offshore banking, offshore insurance and re-insurance and offshore trust and asset management services. The authorizing body for non-financial sector is Macao Trade and Investment Promotion Institute (Instituto de Promocao do Comercio e Investimento de Macao “IPIM”). The authorizing body for financial sector is Macao Monetary Authority (Autoridade Monetaria de Macao).Basic Requirements for Operating Offshore Business:

- The Offshore Institution can only use non-Macao currency in their transactions;

Additional Requirements / Conditions for Offshore Institution: A business plan has to be submitted to the government to apply for a permit to operate offshore service business in Macao. The plan details the mode of operations, investment amount, local staff to be employed, size of the office, and nature of products/services to be dealt with. After the permit is granted, Macao Offshore Institution has to satisfy the government that the business plan is carried out as envisioned as a condition for maintaining the status. In particular:

- The Offshore Institution should have substantial activities, demonstrated by the magnitude of its turnover or assets, in the field of the declared offshore activities.

This is a very important part of the offshore operation in Macao. The Offshore Institution has to be physically present in Macao and cannot operate “on paper “only. It can therefore be said that Offshore Institution has a permanent establishment in Macao.

Permissible Activities: On 13th June 2005, the Macao government issued Directive 205/2005 setting out eight types of permissible activities that commercial Offshore Institutions and auxiliary Offshore Institution can carry out:

Name of the company: A trade name is the name of the company that the entrepreneur wishes to trade under. It should not cause any confusion to the existing companies. The proposed name has to be requested by applying for a "Certificate of Admissibility of Trade Name" at the Commercial Registry Office. After successfully approving, the company must be registered within 60 days.

A proposed name for newly formed companies can either be in Chinese or Portuguese or both. When using both languages, an English name may also be added. However, if only one of the official languages is used, no English name is allowed. Investors should also ensure that the name in all languages used must have a similar meaning. For Branch Offices, the name should be exactly the same name as that of the parent company. However, the word "BRANCH" is an option to use.

Application Procedures for Setting up a Commercial or Auxiliary Offshore Institution: The procedure begins from application made to the Macao Trade and Investment Promotion Institute (“IPIM”), as well as the selection of a trading name and application made to the Commercial Registry Office. The company name of the Offshore Institute must include the word “Macao Commercial Offshore” or “ Macao Auxiliary Offshore”. A name reservation document will be issued by the Macao Commercial Registry.

Application should be made to IPIM, by completing appropriate application forms and to submit a two years business plan as well as certain documents including minutes, company brochure, bank reference letters, etc. Once the application is accepted and approved, the applicant has to register the Offshore Institution and open an office within six month, which can be either locally incorporated company, or foreign incorporated company registered as a branch in Macao. IPIM may request any additional information that it deems necessary for assessing the application, from the applicants or from other public bodies, namely in terms of the suitability and technical capacity of the applicants.

There is no restriction on foreign entities or individuals applying for an Offshore Institution in Macao. After the granting of approval, a Macao company or branch should be set up in accordance with the laws of Macao. Being a code law jurisdiction, the incorporation procedures in Macao are not as simple as that in common law countries. In fact, attorney’s (notary) involvement in the preparation and notarization of documents is required throughout the process. The amount of notarization fee depends on the place of incorporation of the parent company applying for the Offshore Institution.

Shareholders: The minimum number of shareholders in Macao Offshore Institution is one and it can be corporation or an individual. Since Macao is not a common law jurisdiction, it may not recognize nominee or trust ownership of equity interest in a company.

The share capital: The minimum capital required is MOP 25,000 (approximately USD3,125).

Directors of the company: An Offshore Institution has to have at least one director. An individual or corporation can be a director. However, if the director is a corporation, this corporation has to appoint a person to carry out the director's duties.

Registered office and secretary: Macao Offshore Institutions are required to keep a registered and operational office in Macao .A company secretary should be appointed in certain cases. There is no requirement that the company secretary must be a Macao resident, but the secretary, according to Section 237 of the Commercial Code, must be one of the members of the board of directors, or one of its staff members or a lawyer.

Taxation: Macao Offshore Institution is not subject to any corporate tax, provided that it satisfies certain conditions. Offshore Institution enjoys full exemption from various kinds of taxes, including industrial tax, property tax, and stamp duties. In addition, Offshore Institution can engage non-resident managers or specialist technicians who will be exempted from professional tax (income tax) of Macao for up to three years.

Audit and financial returns: Annual audits are required to be performed by a Macao registered auditing company. The audit report has to be submitted to the IPIM.

Annual Meeting: Macao Corporations are required to hold an annual shareholders meeting, within three months after the end of its financial year. The function of this meeting is to consider and receive financial statements, declare dividends and to appoint auditors and directors. Meetings should be held at the company’s registered office or anywhere in Macao.

In order to proceed with the formation of the Macao company please visit our how do I start page and then proceed to filling in our application form

Our fees and expenses for the incorporation of Macao Offshore Institution or resident company

Formation cost includes:
- Name check and approval
- Drafting and filing of Memorandum and Articles of Association
- One set of originals of all standard corporate documents with Apostille
- Payment of the government license fee
- Notary fees
- Provision of registered address
- Provision of company secretary
- Courier fees
- Rubber stamp

Please contact us for a free quotation, we shall respond immediately !

Optional services (to be chosen by the client)
- Provision of nominee shareholder
- Provision of nominee director
- Bank account opening in Macao
- General Power of Attorney with Apostille
- Apostille of one document
- Company seal
- Good Standing Certificate with Apostille

Recurring maintenance fees from 2nd year and after
- Provision of registered office
- Provision of company secretary
- Preparing and submitting of Annual Returns
- Payment of annual government license fee

Please contact us for a free quotation, we shall respond immediately !

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