CEPA Covers 4 Broad Areas
CEPA covers 4 broad areas:
Trade in goods
273 classes of Hong-Kong-made goods can be exported to the mainland free of tariff. For other categories of ‘made in Hong Kong’ products, the mainland also agreed to apply a zero-import tariff, upon applications by local manufacturers for other product codes maintained on China’s tariff system and meeting the CEPA rules of origin.
Trade in services
To be entitled to the benefits of CEPA, a service company must have substantive business activity in Hong Kong by fulfilling all of the following criteria:
- The company must employ 50% or more of its total staff in Hong Kong.
- The company must be incorporated under the laws of Hong Kong.
- The company must be liable to pay profits tax in Hong Kong.
- The minimum period of the company’s substantive business operations in Hong Kong is three years, but for construction and real estate, banking, and insurance, the requirement is five years. Although the exact requirements for a company to be qualified to vary by industry, the assessment will be on a non-discriminatory and objective basis.
- Hong Kong investors enjoy preferential treatment in non-services sectors in the Mainland. The Investment Agreement also promotes and protects investment, and provides for investment facilitation.
Economic and Technical Cooperation
- Both sides agreed to enhance cooperation in 22 areas to cater to the trend and support the development and cooperation, as well as to facilitate and promote trade and investment between the two places.
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