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CEPA Between China (mainland) and Hong Kong

 Ø Trade and investment facilitations in various areas, including trade and investment promotion customs clearance, quarantine and commodities inspection, quality assurance, food safety, small and medium size enterprises, electronic commerce and legal transparency.
 The first two areas appear to benefiting Hong Kong without China receiving anything in return. However, Hong Kong is bound to its existing regime of zero tariffs on importation of goods from China.
 
 4. What companies in Hong Kong can get benefits from CEPA?
 
 The CEPA definition of a Hong Kong company has got the qualification to enjoy the liberalization measure related to trade in service. However, the qualification to enjoying zero tariff on goods (i.e. requirement that meet the ‘rule or origin’ conditions of Annex 2) is still in the course of consultation. The current only beneficiaries of CEPA’s services liberalization measures apply not only to Hong Kong companies but also apply to various individuals in Hong Kong including Hong Kong residents with Chinese citizenship, subject to qualifications listed in Annex 4.
 
 5. What is the definition of a CEPA Hong Kong Company?
 
 A CEPA definition of a HK company is that a company or an existing company, established and registered under the Companies Ordinance, undertakes substantive business operations for the required minimum period.
 Annex 5 provides four categories of definition of Hong Kong companies for four groups of service sectors. They are (a) banks, (b) insurance companies, (c) law firms, and (d) a general category of miscellaneous service sectors including consultancy, transportation, distribution, freight forwarding, logistics, real estate and construction. To a CEPA HK company whatever category it falls in, it has to meet two general conditions: (a) registration and establishment under the Hong Kong law and (b) engagement in substantive business operations in Hong Kong for the period (3-5 years), stipulated for the relevant service sectors.


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