According to Xinhua News Agency, the Guangdong-Macao In-Depth Cooperation Zone in Hengqin (hereinafter referred to as the "In-depth Cooperation Zone") has officially implemented customs closure and operation at 0:00 on March 1, 2024.
So? What does it mean to be closed? What is the seal? What is my business?
Today, Mu Qijun will break it up and tell you about it - what kind of substantive impact will the closure of Hengqin bring to our enterprises? What are the changes in the policy that are conducive to us before and after the closure, and what type of enterprises can benefit more from it?
After Mu Qijun's careful study, in the policies released intensively in March and April, today I will first bring the first article in the Hengqin series: foreign exchange.
In fact, the support policies for the development of Hengqin have been continuously introduced before the closure: for example, the preferential policy of 15% of the enterprise income tax, the exemption of the part of the individual income tax burden of high-end talents and talents in short supply at home and abroad exceeding 15%, and the incentive policy for special talents in Hengqin, etc.
However, since the closure of the "In-depth Cooperation Zone", many new policies and measures have been introduced. Compared with the previous incentive policies in the form of capital subsidies, more emphasis is placed on attracting Macao people and overseas capital to truly settle in Hengqin and promote the integration of Macao, Hengqin and Macao, rather than just subsidizing the wool of the policy, and the same is true of the foreign exchange policies that will be introduced in this article.
Hengqin "Development History"
In order to better understand the breakthrough of foreign exchange control in the "In-depth Cooperation Zone" and interpret the development orientation of the "In-depth Cooperation Zone", we first need to start with the development history of Hengqin:
From the "Hengqin New Area" in 2008, to the "Hengqin Free Trade Zone" in 2015, to the "Hengqin Guangdong-Macao In-Depth Cooperation Zone" in 21 years, and now to the official closure and operation of the Guangdong-Macao In-Depth Cooperation Zone in Hengqin. The change of name actually means that in the national layout, the development status of Hengqin is constantly rising.
Today, the status and determination of the Guangdong-Macao In-Depth Cooperation Zone in Hengqin can be glimpsed by the leadership team of the Administrative Committee of the In-depth Cooperation Zone:
The Administrative Committee of the "In-depth Cooperation Zone" adopts the "system of joint consultation, joint construction, co-management and sharing between the two places" of the Governor of Guangdong Province + the Chief Executive of Macao, and the Administrative Committee of the "In-depth Cooperation Zone" is responsible for the overall planning and decision-making of major plans, major policies, major projects and the appointment and dismissal of important personnel in the Co-operation Zone, and the Executive Committee is responsible for specific development and construction work such as international promotion, investment promotion, industrial introduction and land development. The co-management of the two places can also maintain the stability of various policies to a certain extent.
The reason why the "two places jointly managed" was chosen was not to simply assign Hengqin directly to Macao. This is because we must not only benefit Macao, but also adhere to the principle of "one country, two systems". By co-ordinating the resources of the two places and leaning towards Hengqin, Hengqin will serve as a bridge between Macao and the Mainland, and ultimately achieve the core goal of promoting Macao's economic diversification.
Mu Qijun explained: The "Deep Cooperation Zone" is jointly managed by Guangdong and Macao, but in reality, it may be biased towards the Macao administration. In the future, this "cross-administrative cooperation mechanism" may become the most popular development model.
The core idea of customs closure: "the first line is released, and the second line is controlled"
First of all, it is necessary to explain what the customs closure is, so as to better understand the subsequent policy - the "first line" between Hengqin and the Macao Special Administrative Region, and the "second line" between Hengqin and the mainland (as shown below).
In summary, there are two points:
1. The "second line" will not restrict the entry and exit of personnel.
2. The "first line" of goods is released and the "second line" is controlled.
The new foreign exchange policy of the "Guangdong-Macao In-depth Cooperation Zone".
And what about funding?
In fact, as early as 2021, the Master Plan for the Development of the Guangdong-Macao In-Depth Cooperation Zone in Hengqin proposed to "explore the free inflow and outflow of cross-border capital and promote the convertibility of capital accounts in the Cooperation Zone." ".
In Mu Qijun's view, this short sentence contains a wealth of information, which is also the first time that the term "free flow of capital" has appeared.
However, it has to be said that once the restrictions of foreign exchange control are lifted, the follow-up management is extremely difficult, and it is basically faced with the situation of "there is no turning back when the bow is opened".
How to strike a balance between mobility and control, what policy innovations will the Administrative Committee of the "In-depth Cooperation Zone" make in terms of foreign exchange, and how will relevant measures be formulated to achieve follow-up supervision?
In 2024, after the closure of Hengqin, this plan ushered in more specific implementation measures:
1. Multi-functional free trade account
This is also the most distinctive point in foreign exchange, the banks in the cooperation zone under the supervision of the "electronic fence", launched the business of opening "multi-functional free trade accounts".
The biggest feature of this "multi-functional free trade account" can be summarized as follows: it can realize the free inflow and outflow of foreign funds and the in-depth cooperation zone, and realize the unlimited exchange of foreign currencies (i.e., the freedom of the first line). Funds flowing in and out of the zone will be subject to a certain amount of "infiltration" – relatively free flow within the quota (i.e., second-tier control).
In summary:
1. There is no restriction on the outflow and inflow of foreign exchange funds between the "first-line" (in-depth cooperation zone and overseas).
2. The outflow and inflow of foreign exchange funds between the "second tier" (the In-depth Cooperation Zone and the Mainland) will be relaxed between the accounts of the same name in the two places
Mu Qijun's interpretation: In short, "the first line is liberalized, and the second line is still managed according to cross-border, but accounts with the same name are given a certain penetration quota across the second line". The outflow and inflow of relevant funds will still be regulated by the relevant authorities, but in general, restrictions on foreign exchange funds have been relaxed.
2. Overseas funds come in
Accounts under the supervision of "electronic fence": (electronic fence refers to the innovative cross-border financial management system within the scope of the "in-depth cooperation zone", that is, the first and second lines)
1. In the case of real trade background and trade demand, RMB and foreign currencies can be exchanged and settled quickly. Different from the usual foreign exchange settlement that can only be processed after passing the bank's business review, the relevant registration and filing procedures for cross-border fund transfer are comprehensively simplified.
2. Enterprises in the cooperation zone do not need to go to the foreign exchange administration department to carry out pre-business registration, filing or opening special accounts to carry out business under the capital account other than securities investment.
In Mu Qijun's view, these foreign exchange policies are very good for the current hot cross-border e-commerce industry, the traditional import and export trade industry, and the import and export material processing industry!
In the past, many companies involved in cross-border import and export business, including cross-border e-commerce, would choose to open more than one company in Hong Kong or overseas in order to simplify the complex foreign exchange control in Hong Kong to facilitate trade settlement and communication. Under the condition that the "multi-functional free trade account" function is realized in the in-depth cooperation zone, it can be considered to transfer these overseas transfer functions to the in-depth cooperation zone.
It can achieve the same purpose, compared with the "international financial center" Hong Kong's banks have extremely high guarantee costs, high rent costs, and labor costs. Hengqin Bank's rate is only about one-tenth, and Hengqin's labor cost and rent cost can also be reduced to about 30% and 10% respectively. The company's maintenance cost will be greatly reduced~ coupled with the penetration quota policy of the second-tier and the mainland, it may be more convenient than the company to set up in Hong Kong in terms of remittance entry.
3: Other highlights
In other respects, while the "hard border" between Hengqin and Macao remains, the nature of the border remains the same. However, at a press conference held by the Macao SAR government at the Government Headquarters, Macao Chief Executive Ho Iat Seng personally confirmed that the websites that can be received in Macao can be used in the In-depth Cooperation Zone, and there is no need to "flip walls", except for political websites with extreme colors. Normal network communication will not be restricted, so as to facilitate the collection of data by researchers.
To sum up the above three points, it has to be said that the "In-depth Cooperation Zone" is really an innate holy body for cross-border trade business. In addition to the foreign exchange policy, there are also preferential policies related to import and export this time, due to the priority of space, Mu Qijun will be introduced in the next column, you can continue to pay attention to ~
Looking forward to the development of the Guangdong-Macao In-depth Cooperation Zone
In Mu Qijun's view, the two biggest points of the current foreign exchange policy are the creation of first-line and second-line and multi-functional free trade accounts, which are good for cross-border e-commerce and related platform enterprises. Of course, the function of this account is still a little limited at present, and in the continuous development and policy update of the "In-depth Cooperation Zone" in the future, will the foreign exchange under the capital account be given a higher degree of freedom? Will the second-tier flow projects in China be broadened? It is believed that the In-depth Cooperation Zone will carry out more explorations.
Mu Qijun will also continue to update a series of tweets on the Hengqin topic, and will continue to share policy information such as preferential import and export taxes, talent subsidies, and innovation funding. Welcome to stay tuned~
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