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FAQ

Hong Kong and the Mainland are closely connected. With well-developed cross-boundary transportation networks and cross-boundary facilities, there are frequent contacts between the two places and cross-boundary passenger traffic has been on the rise in recent years. 

High Speed Railway

The Hong Kong Section of the Guangzhou-Shenzhen-Hong Kong Express Rail Link (XRL) connects with the national high-speed rail network and greatly shorten the traveling time between Hong Kong and Shenzhen, Guangzhou, and other cities in the PRD. It connects Hong Kong West Kowloon Station with 58 Mainland stations including Shenzhen and Guangzhou without interchange. You can access more cities in Mainland China including additional GBA cities by interchanging to other trains along the national high speed rail network. 

For fee, routes and timetable, please refer to:  

Public transport (Hong Kong to Shenzhen)

  • MTR 

Going to Shenzhen from Hong Kong by MTR is a frequently used option. MTR East Rail Line is connected to Shenzhen Metro Line 1 at Luohu Station and connected to Shenzhen Metro Line 4 at Lok Ma Chau Station after crossing border. 

For information on fee, routes and timetable of MTR East Rail Line, please refer to: http://www.mtr.com.hk/en/customer/services/to_from_lw_lmc.html 

  • Bus / Minibus / Taxi  

You can also access to land crossings by bus / taxi and then cross the border to go to Shenzhen. For information of access to the land crossings, please refer to website of Transport Department: https://www.td.gov.hk/en/transport_in_hong_kong/land_based_cross_boundary_transport/index.html 

 

Guangzhou-Kowloon Through Train (Hong Kong to Guangzhou)

MTR provides intercity passenger services between Hong Kong and the Mainland with three through train routes: the Beijing line, the Shanghai line and the Guangdong line.  The Guangdong Through Train calls at Changping and Guangzhoudong. There are currently 9 pairs of through trains running between Hung Hom and Guangzhoudong daily, in which 8 northbound trains and 8 southbound trains call at Changping, with a total journey time of about 2 hours. 
For information on fee, routes and timetable, please refer to MTR website (https://www.it3.mtr.com.hk/b2c/frmIndex.asp?strLang=Eng

 

Cross-boundary Coach

Cross-boundary coaches provide services between urban areas of Hong Kong and designated GBA cities.  

The main stopping points in urban areas of Hong Kong include Causeway Bay, Tsim Sha Tsui, Kowloon Station (Element), Mong Kok, Prince Edward, Kwun Tong, Tseung Kwan O, etc. 
The main destinations include Macao and Mainland cities including Shenzhen, Guangzhou, Dongguan, Zhongshan, Zhuhai, Jiangmen, Xinhui, Kaiping, Toishan, Yangjiang, etc. 
For the details on routing, frequency and fare of the cross-boundary coach services, please call the Cross-boundary Coach Associations for the information of the operators: 

  • Hong Kong Guangdong Boundary Crossing Bus Association Limited: Tel 2721 4466 
  • China Hong Kong and Macau Boundary Crossing Bus Association: Tel 2782 0738 

 

Cross-boundary Hire Car

Cross-boundary hire cars provide pre-booked and personalised point-to-point services. Passengers can call the Cross-boundary Coach Associations listed above for the information of the operators. 
Please refer to website of Transport Department on how to identify authorised cross-boundary hire car services

Cross-boundary Ferry

Taking a ferry is by far the most popular way to travel between Hong Kong and Macau, and one of the most convenient ways to travel between Hong Kong and certain parts of Mainland China. 
For relevant information for planning your trip, please refer to Hong Kong Government website on Ferry Services to Macau and the Mainland Ports (https://www.gov.hk/en/residents/transport/crossboundary/ferryservices.htm). 
For dissemination of real-time berthing information of HK-Macao and HK-Mainland China passenger vessels, please refer to dedicated website on cross boundary ferry services (https://crossboundaryferryservices.mardep.gov.hk/en/). 

With the increasing economic integration between Hong Kong and the Mainland, cross-boundary traffic has become more frequent than ever. If you need to drive your private car across the boundary, provided that you have a private car registered in Hong Kong and possess a valid full Hong Kong driving licence, here is how to apply for the licences and permits required by both the Hong Kong and Guangdong Governments. Useful information and advice for driving across the boundary can also be found.

General Requirements

To drive across the boundary, you need to have approval for your car and the driver. You have to apply for a Mainland driving licence, an Approval Notice for the vehicle and driver from the Guangdong Public Security Bureau and a closed road permit for the vehicle from the Transport Department. You should also complete other formalities in the Mainland. 

Application for Mainland Driving Licence

Any Hong Kong residents holding a valid full Hong Kong driving licence can apply for the direct issue of the Mainland driving licence for private car from the Guangdong Public Security Bureau. 

You must apply in person at the licensing counter of any of the designated Vehicle Control Offices in Guangdong Province. For details of the application requirements, you may contact the Guangdong Public Security Bureau at 86-20-36220800 or visit the website of the Guangdong Public Security Bureau. 

More on the direct issue of Mainland driving licence from the Guangdong Provincial Public Security Bureau Department (available in Chinese only)Guides on the direct issue of Mainland driving licence for Hong Kong driving licence holders from the Guangdong Provisional Public Security Department (available in Chinese only)

Application for Approval Notice

To be eligible for an Approval Notice from the Guangdong Public Security Bureau, you need to meet the requirements stipulated by the Bureau. For more details on the eligibility and other requirements for the application of the Approval Notice, you may contact the Guangdong Public Security Bureau or browse the information below: 

Application for Approval Notice issued by the Guangdong Public Security Bureau (available in Chinese only) 

Application for Closed Road Permit

Upon obtaining the Approval Notice from the Guangdong Public Security Bureau, you need to apply for a closed road permit from the Transport Department in Hong Kong. 

To apply for the closed road permit, you need to submit a duly completed application form (Form TD 547D) together with the required supporting documents to the Cross Boundary Unit of the Transport Department in person, by agent, by post or through the drop-in box at the following address: 

Cross Boundary Unit 
The Transport Department 
Room 1032, 10/F, Harbour Building 
38 Pier Road, Central, Hong Kong 

Service Hours 
Monday – Friday: 9 am – 5:15 pm 

General Enquiries 
Hotline: 2804 2600 
Email: licensing@td.gov.hk 

You may download the application form by clicking the link below, or obtain the form from any of the Licensing Offices of the Transport Department. 

Download application form for closed road permit for cross boundary vehicles (Form TD 547D) (pdf file) List of Licensing Offices 

For over-the-counter application, it will be processed within 5 working days except for the unavailability of quotas. For application by post or drop-in box, the result will be mailed to you 3 working days after the Department has received your application. 

Required Documents 

The required supporting documents for an individual applicant of a private car include the following: 

  •  original fourth copy of valid Approval Notice issued by the Guangdong Public Security Bureau 
  • copy of Hong Kong identity card 

  • copy of valid Hong Kong vehicle registration document (both front and back page) 

  • copy of valid Hong Kong driving licence 

  • copy of certificate of Approval for Establishment of Enterprises with Investment of Taiwan, Hong Kong, Macau and Overseas Chinese / Foreign Investment in the PRC or Mainland appointment document if applicable 

For a company applicant of a private car, in addition to the supporting documents listed above (except copy of Hong Kong identity card), the following should also be provided: 

  • copy of valid Hong Kong Business Registration Certificate 

  • certified extract of Information on the Business Registrar issued by the Inland Revenue Department recently (for unlimited company); or certified copy of the latest Company Particulars Search results provided by the Company Registry or Annual Return (certified by the Company Registry or a HK Certified Public Accountant or solicitor) (for limited company) 

If it is an overseas company not registered in Hong Kong, then the following additional documents have to be provided: 

  • certificate of Incorporation and its list of directors (certified by a HK Certified Public Accountant or solicitor), authorisation letter and the above two documents of the authorized HK company 

Permit Fee

The fee for a closed road permit in respect of a private car is HK$ 540 per year. 

Access to Shenzhen Bay Port

With a valid closed road permit, you may drive your car across the boundary via the control point specified on the permit. At present, there are four vehicular boundary crossings, i.e. Lok Ma Chau, Sha Tau Kok, Man Kam To and Shenzhen Bay Port. Shenzhen Bay Port is the fourth vehicular boundary crossing newly opened in July 2007. 

Traffic Arrangements 
A section of access road to and from Shenzhen Bay Port is currently designated as a closed road. Except taxis, only vehicles with a valid closed road permit are allowed to enter the road. Vehicles without closed road permits have to return to Tuen Mun or Yuen Long via Ha Tsuen Interchange. Check below for the map showing the traffic arrangements at Shenzhen Bay Port. 

Map on traffic arrangements at Shenzhen Bay Port (pdf file) 

Shenzhen Bay Port initially runs for 17.5 hours a day, from 6:30 am to midnight. Roads leading to Shenzhen Bay Port will be closed about 30 minutes before the Port ceases operation. You should ensure that there is adequate time to arrive at Shenzhen Bay Port for completing the arrival or departure procedures. With effect from 26 May 2008, cross-boundary private cars with closed road permits for Shenzhen Bay Port are allowed to use the Lok Ma Chau crossing during the overnight period from midnight to 6:30 am until further notice. 

Besides, Shenzhen Bay Bridge may be closed during inclement weather. You should pay attention to the latest traffic information. 

Insurance Coverage 
You may wish to take note of the insurance arrangements for driving to the Hong Kong Port Area of Shenzhen Bay Port. The following link shows you more details about the extension of insurance coverage to the Hong Kong Port Area of Shenzhen Bay Port following its opening. More on insurance coverage

 

Source: https://www.gov.hk/en/residents/transport/crossboundary/xb_driving.htm

Majority of mobile & telecom service providers in Hong Kong provide Mainland China mobile number service with real name registration at the stores. Examples of the service providers include (for reference only): 

Note: Service plan and fee may vary for each service providers. Please refer to the website of the service providers / contact the service providers for most updated and detail information. 

As one of the sixteen policy measures announced in Nov 2019 which would benefit Hong Kong people from all walks of life and facilitate the development of various sectors in the GBA, pilot scheme for Hong Kong residents to open Mainland personal bank accounts in the GBA remotely by attestation is introduced. 

In a risk-controlled and progressive manner, banks in Mainland can open types II or III Mainland personal bank accounts for Hong Kong residents remotely by attestation, through their Hong Kong branches or holding banks within the same holding group, so as to facilitate Hong Kong residents to use mobile payment services in the Mainland. 

There is a plenty of banks in Hong Kong with operation in Mainland China allows customers to open a Mainland personal bank account by attestation in their Hong Kong branches under the same banking group.  

Documents required for account opening
In general, banks would require the following documents for account opening 

  1. Hong Kong Permanent Identity Card, 
  2. Mainland Travel Permit for Hong Kong and Macau Residents 
  3. Mainland China mobile number with real-name registration
  4. Valid proof of address

The requirements would be subject to individual banks. Appointment may be required for the account opening services. 
Note that some banks may also require you to activate your account in person at the branches in Mainland China. 

Transfer Limit of Mainland China bank account
For Hong Kong Resident, the daily limit of aggregate amount remitted to the Mainland per person is RMB80,000.  
The transfer amount is limited by type of account (Type I/ II/ III). 

  • Type I bank account (relevant to wealth management users): offers the most comprehensive set of services, from time deposits, loans, remittances, payments and investment to wealth management services. There is no limit on transfers within Mainland China for Mainland residents.

  • Type II bank account (relevant to users working in GBA): a higher transfer limit and an ATM card compare to Type III account are available. The daily limit on these accounts is set at RMB10,000, while a maximum of RMB200,000 can be transferred in a year.

  • Type III bank account: For those who only want to travel in the area and use e-wallets to pay for meals, train tickets or shopping (with a lower transaction limit).

Majority of banks allows customer to instruct the transfer to Mainland China Bank account through e-banking (Internet / Mobile Phone), while some banks may not offer such services. 

Link to Mainland China e-wallet
Majority of Mainland China bank accounts offered by banks in Hong Kong can be linked to popular e-wallet in Mainland China such as WeChat Pay and Alipay (Mainalnd China version). You would need a debit card/ credit card from the banks to link your Mainland China bank account to the e-wallets. 

Note that the bank accounts may not be able to connect to all e-wallets in Mainland China. For information on a specific e-wallet, please consult the banks. 

Please refers to the other FAQ section on using mobile payment in Mainland China for more information on e-wallet in Mainland China. 

Examples of banks allowing customers to open a Mainland China bank account in their Hong Kong branches (for reference only) :

 

Bank website

Need to be existing customer?

Appointment Required?

Account activation in person in Mainland China?

Mobile banking for managing/ instructing transactions?

Can be linked to Mainland China version e-wallet?

Bank of China (Hong Kong) 

Y

N

N

Y

Y

Bank of East Asia 

Y

N

N

Y

(Required registration of debit card at Mainland branch)

China Construction Bank (Asia) 

N

N

Y

Y

Y

Dah Sing Bank 

Y

Y

Y

Y

Y

Hang Seng Bank 

Y

Y

Y

Y

Y

HSBC 

Y

Y

Y

Y

Y

 

Note: Service fee, account minimum balance and account opening time may vary for each bank. Please refer to the banks website for most updated and detail information on the services. 

Using Hong Kong version of e-wallet
Supporting the use of mobile electronic payment by Hong Kong residents on the Mainland is one of the sixteen policy measures announced in Nov 2019 which offer further convenience to Hongkongers developing their careers, working and living in the Mainland cities of the GBA. 

Since 2018, Hong Kong e-wallets could be widely used on the Mainland, including the GBA, and the number of physical merchants covered and transaction volume have been increasing. To facilitate Hong Kong people to use mobile electronic payment services in the Greater Bay Area, the Hong Kong Special Administrative Region (HKSAR) Government has liaised with Mainland authorities on complementary policy measures. This measure is conducive to fostering the flow of people within the Greater Bay Area, further addressing Hong Kong residents' demand for mobile electronic payment services.  

Major e-wallet service providers, including WeChat Pay HK, Alipay HK and UnionPay have launched cross-border mobile payment services for Hong Kong residents, allowing them to use the Hong Kong version of e-wallet in the Mainland with Hong Kong credit card linked to the e-wallet or complete the ID verification process (depending on requirements of the service provider). 

The users would be able to pay for high-speed railway tickets, book taxis and buy food at designated merchants using the app's payment service in Mainland China. 

User guide/ product information (for reference):

Please refer to website of the service providers / contact the service providers for the most updated information.

Using Mainland China version of e-wallet (linked to Mainland China bank account)

To use the Mainland China version of e-wallets including WeChat Pay and Alipay, you would need a Mainland China personal bank account and a Mainland China mobile number with real name registration. Please refer to other FAQ section for more information.  

Forms for business establishment in China
The main categories of business for foreign investors (including Hong Kong investors) in the Mainland include the following:

  • Representative office (RO)

    RO can engage in non-profit generating activities that are related to the business of its foreign parent enterprise and business-related liaison activities. ROs cannot operate business directly and they do not have legal person status.

    To set up a RO in Guangdong, application could be made to the market regulation authority. A Business Registration Certificate and a Representative Certificate will be issued after the application has been made. The RO should then proceed with registration procedure.
     
  • Individual sole proprietorship

    One of the preferential treatments under the Closer Economic Partnership Arrangement (CEPA) states that Hong Kong permanent residents with Chinese nationality may, in line with relevant laws, regulations or administrative rules of the Mainland, establish sole proprietorship in any provinces, municipalities, or autonomous regions in the Mainland without being subject to foreign investment approval process. There is no limit on the number of employees, or the size of its business space. The permissible business scope of sole proprietorship of Hong Kong residents covers retail, restaurants, computer services, advertising, clinic, economic and trade consulting, and management consulting services, etc.

    For more information, please refer to the website of the Guangdong Administration for Market Regulation (Chinese version only): http://amr.gd.gov.cn/
     
  • Foreign invested enterprises (FIE)

    On 15 March 2019, the Second Session of the Thirteenth National People's Congress passed the Foreign Investment Law of the People's Republic of China (hereunder referred to as the "Foreign Investment Law"). The Foreign Investment Law came into effect on 1 January 2020. Meanwhile, the Law of the People's Republic of China on Chinese-Foreign Equity Joint Ventures, the Law of the People's Republic of China on Foreign-funded Enterprises, and the Law of the People's Republic of China on Chinese-Foreign Contractual Joint Ventures were repealed. According to the Foreign Investment Law, a foreign invested enterprise refers to an enterprise that is wholly or partly invested by a foreign investor and registered within the territory in accordance with the mainland laws. The types of enterprises that foreign investors can incorporate in the Mainland are mainly foreign-invested limited liability company, foreign-invested joint stock company, Hong Kong, Macao, and Taiwan limited liability company, and Hong Kong, Macao and Taiwan joint stock company.

    For foreign invested enterprises established before the implementation of the Foreign Investment Law (such as Chinese-foreign joint venture, Chinese-foreign cooperative enterprise, wholly foreign-owned enterprise, foreign-invested partnership enterprise, hereunder referred to as "existing foreign invested enterprises"), within 5 years after the implementation of the Foreign Investment Law, the organisational form and structure can be adjusted in accordance with the Company Law of the People’s Republic of China, the Partnership Enterprise Law of the People's Republic of China, and other laws, and the change of registration can be processed in accordance with the law, or the original organisational form and structure can be kept unchanged.

    Starting from 1 January 2025, for the existing foreign invested enterprises that have neither adjusted their organisational form or structure, etc. nor applied for change of registration, the market regulation authorities will not process their applications for other registration matters, and will disclose the relevant circumstances.

    Meanwhile, after the adjustment of the existing foreign invested enterprises’ organisational form and structure, the equity transfer method, income distribution method, and residual property distribution method, among others, can remain unchanged as agreed by the original joint venture or cooperative partners.

    For more information about the Foreign Investment Law, please refer to the website of the Mainland Government (Chinese version only): http://www.gov.cn/xinwen/2019-03/20/content_5375360.htm

 

Pre-approval for setting up foreign-invested companies

The Mainland implements the market access negative list system for foreign investments. The Foreign Investment Law of the People's Republic of China, which came into effect on 1 January 2020, stipulates that foreign investment shall be subject to a system of pre-establishment national treatment plus negative list management. The pre-establishment national treatment refers to the treatment given to foreign investors and their investments no worse than that for domestic investors and their investments during the investment admittance stage; and the negative list refers to special administrative measures for foreign investment accessing to specific sectors. China grants national treatment to foreign investments which outside the negative list. For Hong Kong, Macao and Taiwan investments, provisions are similar to that of the Foreign Investment Law.

The Special Administrative Measures (Negative List) for the Access of Foreign Investment (2020) has been implemented from 23 July 2020, which reduced the number of entries in the negative list of national foreign investment access from 63 in 2017 to 33 in 2020. After relaxing access restrictions on agriculture, mining, and manufacturing in 2019, the level of openness in service sector, manufacturing, and agriculture has been further improved.

In the financial sector, the restrictions on foreign share ratio of securities companies, securities investment fund management companies, futures companies, and life insurance companies have been lifted. In the field of infrastructure, the restriction that the construction and operation of urban water supply and drainage pipeline networks with a population of 500,000 or more must be controlled by the Chinese investor has been abolished. In the field of manufacturing, the restrictions on the share ratio of foreign investments in commercial vehicle manufacturing have been lifted, and the regulations prohibiting foreign investments in the smelting or processing of radioactive minerals and nuclear fuel production have been eliminated. In the field of agriculture, the restriction requiring the selection and breeding of new wheat varieties and the production of seeds must be controlled by the Chinese investor has been changed to a share ratio of no less than 34% being held by the Chinese investor.

The Special Administrative Measures (Negative List) for the Access of Foreign Investment in Pilot Free Trade Zones (2020) reduced the number of negative list entries from 95 in 2017 to 30 in 2020. At the same time, the Mainland will continue to conduct pilot schemes in the Pilot Free Trade Zone: on the basis of the national opening-up measures, the Pilot Free Trade Zone continues to take the lead in this regard. In the field of medicine, the regulations prohibiting foreign investments in Traditional Chinese Medicine herbal pieces have been cancelled. In the field of education, wholly foreign-owned vocational education institutions of schooling are allowed.

 

Setting up FIE: general approval process

According to the Foreign Investment Law, beginning on 1 January 2020, “one-stop services” for the business recordation of formation and industrial and commercial registration of foreign-funded enterprises shall no longer be provided. When applying for the formation or modification registration of a foreign-funded enterprise, an applicant shall complete the initial report and modification report of foreign investment. The submission of a foreign investment information report is not an essential requirement for the registration of a foreign-funded enterprise. The registration authority shall no longer conduct a review of any foreign investment information report. An applicant may continue to complete the foreign investment information report after filing an application for business registration. Foreign investors or foreign-funded enterprises shall submit annual reports “integrating multiple reports into one” through the national enterprise credit information publicity system.

When applying for registration of a foreign-invested enterprise, an applicant shall have the subject qualification certificate or identity certificate of the foreign investor notarized by the notary agencies of its home country and certified by the Chinese embassy (consulate) in that country before submitting to the registration authority.

The subject qualification certificate or identity certificate of investors from the Hong Kong Special Administrative Region, the Macao Special Administrative Region and Taiwan shall be notarized by local notary agencies in accordance with special provisions or agreements. The identity certificate of natural person investors in the Hong Kong Special Administrative Region and the Macao Special Administrative Region refers to local permanent resident identity cards, passports, residence permits for Hong Kong and Macao residents issued by the Mainland’s public security department, and mainland travel permits issued by the Mainland’s entry-exit administration authorities; such residence or travel permits does not need notarization.

Generally, after obtaining approval from the in-charge market regulation authorities, FIEs could obtain business license, arrange for injection of registered capital, the engraving of company seals with public security bureaus, the opening of bank account and perform relevant registrations with relevant government authorities, including tax bureau, foreign exchange administration authority, customs, and other related government authorities. From 1 October 2015, newly established enterprises are no longer required to perform registration with tax, statistical or finance bureaus, or obtain tax registration, organisation code, financial registration certificates after obtaining business licenses with unified social credit code issued by administrative authorities for industry and commerce. For details of foreign-invested enterprise registration and incorporation procedures, please refer to the following government websites.

For certain industries, foreign investors should apply for certificates/licenses as required by relevant authorities before applying for foreign investment approval with the Commerce Department.

Please note that the above general introduction of FIE set-up procedure is for reference only, and should not substitute legal or professional advice. For more information please seek advice from qualified law firms or other professional consulting agencies. Normally, professional consulting agencies could provide services on FIE set-up, which may cover the drafting of Articles of Association, submission of application documents for FIE establishment, negotiation with local government authorities, etc.

 

Requirements on registered capital of FIEs

Total investment of a FIE refers to the total amount of funds needed to run the company, i.e. the total amount of capital for infrastructure construction and working capital that is commensurate with the FIE's production scale. Registered capital of a FIE refers to the total amount of capital registered with the market regulation authorities for the purpose of establishing the FIE, i.e. the total amount of capital subscribed to by foreign investors. Investors are liable for FIE's debts by their capital contribution. According to the Notice on Issuing the Scheme for the Registration System Reform of Registered Capital issued by the State Council on 7 February 2014, the registration condition for registered capital has been eased unless otherwise stipulated in laws, administrative regulations and decisions of the State Council on the minimum amounts of registered capital in particular industries.

For details of the Notice on Issuing the Scheme for the Registration System Reform of Registered Capital, please refer to the website of the Mainland Government (Chinese version only): http://www.gov.cn/zwgk/2014-02/18/content_2611545.htm

The commerce authority has discretion to determine whether to approve the establishment of a FIE having regard to the registered capital of the FIE and its operation scale. For specific requirements for total investment amount and registered capital of a FIE, investors can seek advice from qualified law firms or professional consulting agencies or communicate with the local in-charge commerce authority and market regulation authority.

Requirements on leasing operating premises

In leasing operating premises, investors should pay attention to the following issues:

  1. Lease contract should be signed by the legal representative or the authorised person of the investor.
  2. It should be stated in the lease that the leased premises will be used for the proposed FIE and the FIE would become the lessee after its establishment.
  3. The landlord should provide a valid Property Certificate for the premises being leased. If the FIE operates on premises without a relevant Property Certificate, investors should provide other documents as required by the relevant business registration authority.
  4. The scope of use which stated in the Property Certificate should generally be "for commercial purpose/usage". If investors lease residential property and use it as operating premises, the change of use should be in line with relevant provisions in law or other related regulation. Residential buildings or the lowest floor of residential building with permitted scope of use for commercial purposes should nonetheless not be used for food and beverage services, entertainment services, internet services, manufacturing of dangerous chemicals and other prohibited industries.

For more information, please refer to the website of the Guangdong Administration for Market Regulation: http://amr.gd.gov.cn/

Source: Hong Kong Economic and Trade Office in Guangdong of the Government of the Hong Kong Special Administrative Region
https://www.gdeto.gov.hk/en/doing_business/doing_business.html

 

Cross-border Business Registration in Hong Kong
There are Chinese banks in Hong Kong offering cross-border business registration service which allow you to submit the application document for business registration of Foreign-invested Enterprise(s) in Guangdong Province in person at their branches in Hong Kong.

The Mainland implements the market access negative list system for foreign investments. The Foreign Investment Law of the People's Republic of China, which came into effect on 1 January 2020, stipulates that foreign investment shall be subject to a system of pre-establishment national treatment plus negative list management. The pre-establishment national treatment refers to the treatment given to foreign investors and their investments no worse than that for domestic investors and their investments during the investment admittance stage; and the negative list refers to special administrative measures for foreign investment accessing to specific sectors. China grants national treatment to foreign investments which outside the negative list. For Hong Kong, Macao and Taiwan investments, provisions are similar to that of the Foreign Investment Law.

The Special Administrative Measures (Negative List) for the Access of Foreign Investment (2020) has been implemented from 23 July 2020, which reduced the number of entries in the negative list of national foreign investment access from 63 in 2017 to 33 in 2020. After relaxing access restrictions on agriculture, mining, and manufacturing in 2019, the level of openness in service sector, manufacturing, and agriculture has been further improved.

In the financial sector, the restrictions on foreign share ratio of securities companies, securities investment fund management companies, futures companies, and life insurance companies have been lifted. In the field of infrastructure, the restriction that the construction and operation of urban water supply and drainage pipeline networks with a population of 500,000 or more must be controlled by the Chinese investor has been abolished. In the field of manufacturing, the restrictions on the share ratio of foreign investments in commercial vehicle manufacturing have been lifted, and the regulations prohibiting foreign investments in the smelting or processing of radioactive minerals and nuclear fuel production have been eliminated. In the field of agriculture, the restriction requiring the selection and breeding of new wheat varieties and the production of seeds must be controlled by the Chinese investor has been changed to a share ratio of no less than 34% being held by the Chinese investor.

The Special Administrative Measures (Negative List) for the Access of Foreign Investment in Pilot Free Trade Zones (2020) reduced the number of negative list entries from 95 in 2017 to 30 in 2020. At the same time, the Mainland will continue to conduct pilot schemes in the Pilot Free Trade Zone: on the basis of the national opening-up measures, the Pilot Free Trade Zone continues to take the lead in this regard. In the field of medicine, the regulations prohibiting foreign investments in Traditional Chinese Medicine herbal pieces have been cancelled. In the field of education, wholly foreign-owned vocational education institutions of schooling are allowed.

 

Source: Hong Kong Economic and Trade Office in Guangdong of the Government of the Hong Kong Special Administrative Region
https://www.gdeto.gov.hk/en/doing_business/doing_business.html

Foreign investors (including Hong Kong investors) who have set up FIEs or ROs would generally be subject to the following types of China tax: Corporate Income Tax, Withholding Tax, Value Added Tax, Consumption Tax and local surcharges, Stamp Duty, Urban Land Use Tax, Property Tax, Deed Tax, Land Appreciation Tax, Customs Duties, etc. For more information about taxation, please call the hotline of Guangdong Provincial Tax Service, State Taxation Administration: (86 20) 12366.

Corporate Income Tax (CIT)

Overview
Enterprises incorporated in the Mainland (such as FIEs) or foreign enterprises incorporated according to the laws of other jurisdictions but have effective management located in the Mainland should pay CIT in the Mainland on their world-wide incomes. The applicable CIT rate is 25%. With respect to foreign enterprises that have no permanent establishment or fixed place of business in China, or have permanent establishment or fixed place of business in the Mainland but the income derived from the Mainland is not effectively connected with the permanent establishment or fixed place of business, they would be subject to a Withholding Tax (WHT) on their China-sourced income. The statutory WHT rate is 10%, which could be reduced by applicable tax treaties between the Chinese Government and other national governments.

CIT Taxable income is assessed based on an enterprise's profit, but not necessarily equal to its accounting profit. It is the net amount of the annual gross income less non-taxable income and tax-exempt income, and after deducting applicable costs and expenses and offsetting the net operating loss carried over from previous years.

CIT is calculated on an annual basis and within each tax year, taxpayers should perform provisional CIT filings on a monthly or quarterly basis. The tax year of CIT taxpayers is the calendar year (1 January to 31 December). The provisional CIT filing should be performed within 15 days after the end of each month/quarter. Taxpayers should perform annual CIT filings and settle the CIT due/refund within 5 months from the end of each calendar year.

Value-added Tax (VAT), Consumption Tax (CT) and local surcharges

Value Added Tax (VAT)
Entities and individuals shall pay VAT under the regulations if they are engaged in sales of goods, provision of processing, repairs or replacement services, import of goods, sales of services, intangible assets or real estate property in the Mainland.

VAT reform
As part of the reform under the Mainland's 12th Five Year Plan, a pilot VAT reform ("Pilot VAT Reform") was announced in the executive meeting of the State Council in October 2011. From January 2012 onwards, Pilot VAT Reform was introduced in selected locations to expand the scope of VAT to cover industries that were previously subject to Business Tax.

From 1 May 2016 on, the reform has been launched to change business tax to added-value tax. In December 2017, the State Council promulgated the Decision of the State Council on Abolishing the "Interim Regulations of the People's Republic of China on Business Tax" and Amending the "Interim Regulations of the People's Republic of China on Value-Added Tax", where the Interim Regulations of the People's Republic of China on Business Tax was abolished, and the units and individuals that sell services, intangible assets, and real estate are defined as added-value tax payers.

Consumption Tax (CT)
CT is imposed on top of VAT/BT for the sale of 14 specific kinds of consumer products. According to PRC Tentative Regulations on Consumption Tax (amended in 2008 and came into force since 1 January 2009), the 14 kinds of product subject to CT include: cigarettes, wine and alcohol, cosmetics, gasoline, luxury cars, golf balls and equipment, yachts, luxury watches and etc. CT payable is calculated on the basis of sales amount and/or the sales volume/quantity depending on the product item concerned. From 1 December 2014, CT is no longer imposed on small-displacement motorcycles with a cylinder capacity of less than 250 ml (exclusive), automobile tires, leaded gasoline for cars and alcohol.

Starting from 1 February 2015, battery and coatings shall be subject to CT in order to promote energy conservation and environmental protection. CT of 4% will be levied on the sale price (before VAT) at the point of production, processing and import of battery and coatings.

From 10 May 2015, the ad valorem rate for wholesale of cigarette is increased from 5% to 11% plus unit rate of RMB 0.005 per cigarette.

Local surcharges
City Construction Tax (CCT), Education Surcharge (ES) and Local Education Surcharge (LES) are calculated based on the actual payment of VAT, BT and CT (hereinafter referred to as "the Three Taxes"), which are filed and paid together. The calculation is based on the actual payment of the Three Taxes multiplied by the tax rates respectively.

Tax Policies for Cross-border E-commerce Retail Imports and Exports
To build a fair market for competition and to promote healthy development of cross-border e-commerce retail imports, the imported commodities from cross-border e-commerce retail (Business to Customer, i.e., B2C) shall be subject to Customs Duty (CD), import-level VAT and Consumption Tax (CT). The taxpayers shall be the individuals purchasing the imported B2C commodities. The dutiable values of imported commodities shall be their actual transaction prices including the retail prices of the goods and accompanying freight and insurance expenses. E-commerce enterprises, enterprises engaging in e-commerce trading platform or logistics enterprises may act as the withholding agents.

Applicable tax treatments

Amount of the B2C import transaction (threshold: RMB2,000 per transaction and RMB 20,000 per year individually)

Applicable tax treatments

Not exceeding the threshold

CD rate is 0% on a provisional basis.
Import-level VAT and CT shall be imposed with a 30% reduction on a provisional basis, i.e., import-level VAT and CT exemption will no longer be available.

Exceeding the threshold (including single inseparable commodity with a dutiable value exceeding RMB 2,000)

Taxes shall be imposed in full amount according to the general trade mode.

 

Customs Duties

Consignee of imported goods, consignor of export goods, owner of entry articles are taxpayers of Custom Duties. All goods permitted to be imported into or exported out of and all articles allowed to enter into the Mainland shall be subject to payment of Customs Duties unless otherwise specified by the State Council. The tariff items, tariff heading numbers and tariff rates as proscribed in the Customs Import and Export Tariffs of China and the Import Tariff Rates of the PRC for Entry Articles are formulated by the State Council.

Customs Offices are responsible for the collection of Customs Duties of goods imported into the Mainland and other import taxes (including import VAT and consumption tax). To comply with relevant World Trade Organization (WTO) requirements, tariff rates of imported goods have gradually been reduced since 2002. Customs Duties are computed based on customs value assessed by the Customs Offices or quantity, and are collected by the Customs Offices.

Stamp Duty (SD)

According to the PRC SD Provisional Regulations ("SD Regulations", effective in October 1988), entities or individuals which conclude or receive the dutiable documents prescribed in the SD Regulations in the PRC are subject to SD. In order to support small-scaled and micro-scaled business enterprises, during 1 January 2018 and 31 December 2020, loan contracts entered into between such enterprises and financial institutions are temporarily exempt from SD.

Deed Tax (DT)

The Deed Tax Law of the People’s Republic of China (hereunder referred to as “DT Law”) was passed at the 21th session of the 13th National People’s Congress Standing Committee on 11 August 2020. The DT Law has been officially published on 12 August, which means DT has been regulated by the tax law instead of the provision regulations. The DT Law shall be effective from 1 September 2021. Meanwhile, the prevailing Provisional Regulations on the Deed Tax which has been effective since 1997 will be abolished at the same time.

According to the DT Law, any transfer of the ownership of the land or housing within the territory of the People's Republic of China by the entities and individuals shall, as taxpayers of the DT, pay the DT in accordance with this Law. The basis for the calculation of DT shall be as follows:

1. For the transfer or sale of a land use right or housing transaction, the basis for the calculation of DT shall be the transaction price determined in the relevant contract on the transfer of ownership of land or housing, including currency and in kind to be delivered as well as money paid corresponding to other economic benefits.

2. For the exchange of land use rights or housing, the basis for the calculation of DT shall be the difference between the prices of the exchanged land use rights or housing.

3. For the donation of a land use right or housing or other transfer of ownership of land or housing without a price, the basis for calculation of DT shall be the price legally checked and ratified by the competent tax authority with reference to the market price for sale of the land use right or housing transaction.

Where the transaction price or the difference between the prices under an exchange declared by a taxpayer is obviously low with no reason, the competent tax authority shall check and ratify it in accordance with the Law of the People's Republic of China on the Administration of Tax Collection.

The DT rates shall range from 3% to 5%. Specific applicable deed tax rates shall be proposed by the People's Government of each province, autonomous region or municipality directly under the Central Government within the range of tax rates as provided for in the preceding paragraphs, and be reported to the Standing Committee of the People's Congress at the same level to decide, and then to be reported to the Standing Committee of the National People's Congress and the State Council for record. Each province, autonomous region or municipality directly under the Central Government may, in line with the procedures prescribed in the preceding paragraphs, determine differential tax rates for the transfer of ownership of housing with different subjects, in different regions and of different types.

For more information about the Urban Maintenance and Construction Tax Law, please refer to the website of the Mainland Government (Chinese version only): http://www.moj.gov.cn/Department/content/2020-08/12/592_3254045.html

Application for tax treaty relief under the Mainland-Hong Kong Tax Arrangement

The Arrangement between the Governments of the People’s Republic of China and Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income (hereunder referred to as "Mainland-Hong Kong Tax Arrangement") and its first Protocol came into effect since December 2006. Subsequently, the two parties agreed and signed the second, third, fourth and fifth protocol of the Mainland-Hong Kong Tax Arrangement in June 2008, May 2010, April 2015 and July 2019. According to Mainland-Hong Kong Tax Arrangement, to enjoy preferential tax treatment of the arrangement, qualified Hong Kong tax residents, who obtained dividends, interests, royalties and/or capital gains from transfer of property from the Mainland China, could apply for pre-approval with the relevant mainland tax authorities for eligibility of preferential tax arrangements. For the Mainland-sourced dividends, interests, royalties and capital gains derived by Hong Kong people who are not eligible for preferential treatment under Mainland-Hong Kong Tax Arrangement, it would be subject to WHT at the standard rate of 10%.

 

Dividends

Interests

Royalties

Capitals gains

Applicable WHT rates under Mainland-Hong Kong Tax Arrangement (Note)

5%

7%

7%
(Royalties derived from aircraft and ship leasing businesses shall be subject to the preferential rate at 5%)

0%

Note: The lower rates would be applicable if the recipient of relevant passive income qualifies necessary requirements, and it is entitled to the preferential tax treatments under the Mainland-Hong Kong Tax Arrangement.

To simplify the implementation of Mainland-Hong Kong Tax Arrangement, the competent tax authorities of the Mainland and Hong Kong have negotiated and reached an agreement. The Certificate of Hong Kong Tax Resident Status issued by the Hong Kong competent authority to a Hong Kong tax resident for a particular calendar year may serve as proof of its Hong Kong tax residency for that calendar year and the two succeeding calendar years for claiming the benefits under the Mainland-Hong Kong DTA. If there have been any changes resulting in failure to meet any condition of the residency status, the resident would no longer be entitled to the benefits under the Mainland-Hong Kong DTA since the date of the change.

Source: Hong Kong Economic and Trade Office in Guangdong of the Government of the Hong Kong Special Administrative Region
https://www.gdeto.gov.hk/en/doing_business/doing_business.html

Under The Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA), eligible Hong Kong professionals such as architects, structural engineers, lawyers, doctors etc., might acquire the corresponding Mainland's professional qualifications through mutual recognition or examinations. Besides, if such architects or structural engineers are engaged or employed by relevant enterprises in the Mainland, they are allowed to register for practice in designated provinces and cities and establish architectural design, structural engineering or other related firms or operate those firms in the form of partnership or association with their Mainland partners. Law firms in the form of association with Mainland partners can provide one-stop cross-border legal services, and share operating costs and profits with their Mainland partners. 

The Central Government announced on 6 November 2019 to further extend the scope of mutual recognition of qualifications for construction professionals to facilitate the renewal of construction professionals' qualifications, and enable architects and structural engineers who are members of relevant professional institutes in Hong Kong to commence work on the mutual recognition of membership with corresponding institutes on the Mainland. Also, Hong Kong construction and related engineering professionals who have obtained relevant professional qualifications are allowed to extend their areas of services from Guangdong, Guangxi and Fujian to all provinces of the Mainland. 

Mutual Recognition of Professional Qualification and other issues relating to professional services under CEPA 

Construction and related Engineering Services

  • For latest information on mutual recognition of professional qualifications between the Mainland and Hong Kong regarding construction and related engineering services, please visit the web site of Development Bureau, the Hong Kong Special Administrative Region Government (HKSARG)

  • Architects 
    The Hong Kong Institute of Architects (HKIA) and the National Administration Board of Architectural Registration signed in Beijing on 17 February 2004 an agreement on mutual recognition of professional qualification in architecture. The first training and test session under the agreement was held in May 2004.  The qualification certificates were presented to the first batch of successful candidates on 16 August 2004. For details, please contact HKIA

  • Structural Engineers 
    The Hong Kong Institution of Engineers (HKIE) and the National Administration Board of Engineering Registration (Structural) signed in Beijing on 27 August 2004 a reciprocal recognition agreement for structural engineers. For details, please contact HKIE

  • General Practice Surveyors 
    The Hong Kong Institute of Surveyors (HKIS) and the China Institute of Real Estate Appraisers signed a reciprocity agreement on 4 November 2003 for general practice surveyors in Hong Kong and real estate appraisers in the Mainland. The first training and test session under the agreement was held in March 2004. The qualification certificates were presented to the first batch of successful candidates on 20 August 2004. For details, please contact HKIS

  • Planners 
    The Hong Kong Institute of Planners (HKIP) and the National Administration Board (NAB) of Professional Planners System of the Ministry of Construction signed an agreement on mutual recognition of professional planning qualifications between Hong Kong and the Mainland on 24 May 2005. For details, please contact HKIP

  • Quantity Surveyors 
    The Hong Kong Institute of Surveyors (HKIS) and the China Engineering Cost Association signed on 24 May 2005 a mutual recognition agreement for quantity surveyors in Hong Kong and cost engineers in the Mainland. The first training and test session under the agreement was held from 28 November to 1 December 2005. The qualification certificates were presented to the successful candidates on 11 May 2006. On the basis of the mutual recognition agreement, supplementary agreements were signed on 22 June 2009, 15 October 2015 and 25 July 2017. For details, please contact HKIS

  •  Building Surveyors 
    The Hong Kong Institute of Surveyors (HKIS) and the China Association of Engineering Consultants (CAEC) signed on 27 June 2006 a mutual recognition agreement for building surveyors in Hong Kong and engineering consultants of the CAEC in the Mainland. For details, please contact HKIS

 Securities and Futures Services 

  • The Securities and Futures Commission (SFC) and the China Securities Regulatory Commission signed in December 2003 the "Mainland/Hong Kong Closer Economic Partnership Arrangement - Arrangements relating to Qualifications of Securities and Futures Industry Practitioners". For details of the arrangement for mutual recognition of professional qualification of CEPA, please refer to parts 3.5 and 3.15 of the "Related Frequently Asked Questions", which is accessible at the hyperlink below.  

  • Related Frequently Asked Questions 

  • For further enquiries, please contact SFC

Patent Agents Services 

  • Starting from 2004, Hong Kong residents are able to take the "National Qualification Examination for Patent Agents" administered by the State Intellectual Property Office and seek to qualify as patent agents in the Mainland after having completed a period of apprenticeship and complied with other related procedures . For details, please visit the web site of Intellectual Property Department, Hong Kong Special Administrative Region Government

  • Related press release (pdf format) 

Professional Accountants Services 

Estate Agents 

Source: Trade and Industry Department 
https://www.tid.gov.hk/english/cepa/mutual/mutual.html 

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