The Mainland China and Hong Kong Closer Economic Partnership
Arrangement ("CEPA") signed on 29 June 2003, offers Hong
Kong entities (individuals and companies) preferential treatment
for doing business in the PRC. Successive supplements have expanded
and clarified these privileges. The most recent supplement, known
as the "fifth supplement", has been in effect since it
was signed on 29 July 2008.
It improves market access for Hong Kong service suppliers in the
following 17 business sectors: (1) accounting, (2) construction,
(3) medicine, (4) services incidental to mining, (5) personnel
placement and supply services, (6) related scientific and technical
consulting services, (7) printing, (8) convention and exhibition,
(9) distribution, (10) environment, (11) banking, (12) social
services, (13) tourism, (14) maritime transport, (15) air
transport, (16) road transport and (17) individually owned
Three areas are highlighted below.
Convention and exhibition services Subject to the approval of the China Council for the
Promotion of International Trade, Hong Kong service suppliers can
establish a wholly foreign-owned enterprise, equity joint venture
or contractual joint venture in Beijing, Tianjin, Chongqing and
Zhejiang Province to organise overseas exhibitions.
Mining, related scientific and technical consulting
services Hong Kong companies can engage in oil and gas development
services (only in petroleum and liquefied petroleum gas). They may
also provide prospecting and surveying services in iron, manganese
and copper, including geological, geophysical and other scientific
prospecting services, and sub-surface surveying services.
Environmental protection services The Guangdong provincial government is authorised to
approve the application of Hong Kong service suppliers for setting
up enterprises to operate environmental pollution control
facilities in Guangdong.
Foreign companies would do well to consider the privileges provided
by CEPA, because establishing a Hong Kong subsidiary can allow
access to certain sectors that are otherwise off-limits to foreign
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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