HKETO - Closer Economic Partnership Arrangement (CEPA) - Hong Kong Economic and Trade Office (Canada)

Closer Economic Partnership Arrangement (CEPA)

Getting ahead in China

The Closer Economic Partnership Arrangement, or CEPA, is a free trade deal signed between Hong Kong and Mainland China. It offers favorable trading and investment conditions to Hong Kong-based companies interested in exporting goods, or expanding business, into Mainland China.

Importantly, CEPA is non-nationality specific. As long as you satisfy the CEPA criteria your company can benefit. This has made Hong Kong an attractive location for overseas companies interested in expanding into China in sectors that may otherwise have restrictions.

CEPA provisions cover three broad areas:

Trade in Goods

Almost all goods (1,047 product categories) which qualify as 'Made in Hong Kong' can be exported duty-free to Mainland China. Non-Hong Kong companies can benefit by outsourcing production or partnering with a manufacturer whose products satisfy the CEPA 'Rules of Origin'.

Trade in Services

CEPA covers a broad range of service sectors and reduces, or removes, geographical, financial and ownership restraints. This applies to a company of any nationality which satisfies the following criteria:
- Is incorporated in Hong Kong
- Has a three to five year operating history (depending on the sector)
- Is liable to pay Hong Kong tax
- Employs 50% of its staff locally

To fast-track your CEPA status, you may consider partnering with, or investing in, a company which is already CEPA qualified.

Trade & Investment Facilitation

Hong Kong and the Mainland China governments have agreed on a series of measures to make business between the two economies easier and more efficient. Measures cover customs clearance, inspections and quality standardization, e-business, transparency in legal issues and improving intellectual property protection