A Macao Offshore Commercial Company (OCC) is similar to other countries’ “International Business Companies” (IBC). OCC’s cannot engage in any business within Macao’s borders or do business with its residents. Any type of business can be engaged in outside of its borders like a typical IBC. Foreigners can own all of the OCC’ shares. The OCC’s profits are completely tax free.
Another type of offshore company is called the “Macao Offshore Auxiliary Company” (OAC) which can only act as a holding company and not engage in any active international business.
The Offshore Regime Law of 1999 (SAR) regulates offshore companies in Macao including both the OCC’s and the OAC’s. They are known as “Macao Offshore Service Companies” (MOC). Tax exempt offshore companies according to the SAR requires following these rules:
• Focus only on non-Macao markets; and
• Targets only non-Macao residents as customers; and
• Only used non-Macao currency when conducting business.
OCC’s are regulated and supervised by the Macao Trade and Investment Promotion Institute (hereinafter “IPIM”).
Background
Macao (also called “Macau” in Portuguese) is officially called the “Macao Special Administrative Region of the People’s Republic of China”. It is an autonomous territory of mainland China.
Macao used to be a Portuguese colony from the middle 16th century until 1999 when it ceded to mainland China. In 2001 the Macao government enacted a law legalizing gambling. In 2002, onshore and offshore gambling casinos opened for business. In 2003, the government enacted another law regulating internet gambling. As a result, Macao became the gambling center of Asia which provides a big boost to its economy.
Offshore Commercial Company (OCC) Benefits
A Macao Offshore Commercial Company (OCC) offers these benefits:
• Complete Foreign Ownership: The OCC’s shares can be owned by foreigners.
• Privacy: Neither the names of the shareholders or the beneficial owners are not included in any public records.
• Tax Exemption: OCC’s are exempt from all taxes. However, U.S. taxpayers and all others subject to global income taxation must report all income to their governments.
• Low Capital: Currently, the minimum authorized capital is only around $2,500 USD.
• One Shareholder/Director: Only one shareholder is required who can also be the only director for better control.
• English: While not an official language, company name and documents in English are allowed.
Offshore Commercial Company (OCC) Name
An OCC must choose a company name not alike or similar to another legal entity in Macao. Company names may be in Chinese, Portuguese, or English.
The company name must include the words “Macao Offshore Commercial” or use its abbreviation of “OCC”.
Registration
File an application and an investment plan with the IPIM. Upon approval, the IPIM incorporates the OCC by issuing an Offshore Service Permit.
The registration and processing time can take up to one month depending on the complexity of the type of business, investment plan, and supporting documents.
While the beneficial owner is disclosed to the IPIM, details are not available to the public.
Shareholder
Only one shareholder is required to form an OCC. Shareholders can be citizens of any country and reside anywhere. If a shareholder becomes a resident of Macao, he or she must file a notice of residency change.
Director
Only one director is required for an OCC. The sole shareholder may become the only director for better control of the OCC. Directors may be citizens from any country and are not required to reside in Macao. Natural persons or corporate entities may be appointed as directors.
Officers
The appointment of officers such as a president, secretary, or treasurer are optional.
Registered Agent and Address
OCC’s must appoint a local registered agent whose address may be the registered address.
Minimum Capital
The required minimum authorized capital is 25,000 MOP (approximately $2,500 USD as of July, 2017).
Taxes
Typical Macao companies pay a corporate (called a “profit”) tax where the first 200,000 MOP “Macanese Pataca” is tax exempt. This amounts to just under $25,000 USD as of July, 2017. After that amount, the next 100,000 MOP is taxed at a 9% rate. Then, the following amount is taxes at a 12% rate. Unlike most countries, income is not based on “territorial” sources, but worldwide income is taxed.
However, an OCC is completely tax exempt on all profits as long as they do not use MOP currency, do not do business with local residents or other local companies.
There are no capital gains tax, sales tax, stamp duty, inheritance tax, or gift tax in Macau. The business registration tax normally paid by companies is exempt for OCC’s.
Residents are liable for income tax on their salaries if employed in Macau or their wages are paid inside Macau. However, if they work remotely for an OCC no income tax will be owed.
Non-resident management and specialists employed by an OCC obtain automatic professional tax (tax on salaries) exemptions for the initial 3 years of employment if they obtain Macao residency permits.
Note: U.S. residents and all others subject to worldwide income taxation must report all income to their tax agencies.
Accounting
Every company must file annual financial statements. As long as the OCC’s financial statements verify that all income sourced from outside of Macao, no taxes will be due.
Public Records
Although the names of the beneficial owners are disclosed to the IPIM, those details are not available to the public.
Time for Formation
The entire registration process and approval may take up to one month.
Shelf Companies
Shelf companies are not available to purchase in Macao.
Conclusion
A Macao Offshore Commercial Company (OCC) has these benefits: 100% foreign owners, no taxes, privacy, one shareholder required who can be the sole director, low minimum capital, and English documents allowed.
