The new Arbitration Bill was approved in general terms by the Legislative Assembly in 2018 and voted into law in November 2019. Once the New Arbitration Law enters into force in May 2020, Macau's dual arbitration system will cease to exist. This legislative cohesion is likely to encourage foreign investors and partners to choose Macau as their jurisdiction for disputes and strengthen its arbitration credentials internationally.
Economic diversification cannot be achieved overnight; nonetheless, the government regularly promotes it in public announcements. However, can Macau really have a diversified economy, given its existing dependence on gaming? Arguably, in order to diversify its economy, Macau must establish clear rules and enforced compliance in this sector.
Macau's offshore regime will be revoked on 1 January 2021. While the main reason for establishing an offshore company is to take advantage of an offshore regime, primarily for tax benefits, in light of this impending revocation, such advantages will soon be inapplicable to offshore companies established in Macau.
Since 1 November 1999, hundreds of companies have been incorporated under Macau's offshore regime. However, following the Legislative Assembly's recent approval of Law 15/2018, the offshore regime and its associated companies' days are numbered. Until 1 January 2021, some economic activities relating to foreign markets will continue to benefit from the offshore regime, including those performed exclusively by non-resident institutions authorised to operate in Macau.
In 2018 and 2019 the legislature approved numerous laws to reinforce Macau's economic stability and international fiscal cooperation. Further, the government put forth for discussion numerous draft laws to stimulate diversification in the economy and encourage the development of the financial leasing industry. Additional measures are expected in 2019 and 2020 to develop the Guangdong-Hong Kong-Macao Greater Bay Area and overcome the challenges presented by today's cross-border financial activities.
A new draft law proposes to reformulate the legal framework regulating Macau's taxi services. According to public opinion, taxi services are neither fulfilling customers' needs nor responding to the high demand caused by increased tourism. As the existing legal regime governing this sector has been in force for more than 18 years, reforms are long overdue. However, the new draft law has failed to satisfy public expectations as it provides no space for the use of app-based ride-hailing services.
The government recently introduced two new draft laws to increase financial leasing activities in Macau. Replacing legislation that has been in force for over 20 years and considered a necessary condition for developing financial activity in Macau, the new legal regime will reclassify financial leasing entities as 'non-depository institutions', make the supervision of these entities more flexible and allow for the creation of special financial vehicles in Macau.
Some critics have labelled Macau's functioning legal and financial framework as a legal impediment to financial innovation and change; however, it could be suggested that a number of recent actions – including the authorisation of one public company limited by shares to provide payment services in relation to bank cards and another to provide payment services via the Internet and mobile phones – may result in innovation in the industry as a result of the Financial System Act.
Following the end of Macau's gaming industry monopoly, dealer-operated electronic table games have assumed an important and decisive role in the Macau gaming market. Considering the development and increasing importance of this type of gaming product, the Macau Gaming Inspection and Coordination Bureau recently decided that it was necessary to advance a new set of technical standards.
Macau was previously bestowed with an offshore regime boasting a comprehensive list of 20 offshore activities. This initially attracted many businesses, but the allure was greatly reduced after the removal of 12 activities from the list. Just as many began to believe that offshore activity was over, Macau's mandate to become a commercial and trade cooperation service platform between China and Portuguese-speaking countries came into play.
The Legislative Assembly recently approved the legal framework for the exchange of fiscal information in order to align Macau with G20 and EU standards. Law 5/2017 expressly revokes Law 20/2009 and has standardised the exchange of fiscal information within the countries which are parties to the international conventions and treaties to which Macau is also a party. The law therefore aims to avoid double taxation and tax evasion.
Macau's legal regime for real estate rentals is set out in the Civil Code, with specific rules on rental prices. These terms are expected to be improved to cope with the reality of the market. According to the Legislative Assembly, the leasing regime reform provides for further protection and control based on the Civil Code and intends to enhance the local lease market with affordable rental prices.
After its initial introduction to the Macau Legislative Assembly in 2013, the Regime Jurídico do Erro Médico (RJEM) will soon enter into force. The driving forces behind the RJEM's enactment include a lack of knowledge about the occurrence of medical error and the consistency of the liability rules and competent courts. The RJEM is a sensible reaction to the problems and injustice caused by medical error and how it is handled. Hopefully its effectiveness can be proven with experience.
The chief executive of the Macau Special Administrative Region recently delivered the policy address for the 2017 fiscal year. He stated that Macau's economy is developing healthily, public finances are stable and public accounts are continuing to register a surplus. Plans include improvements to social welfare, further investment in the 'one belt, one road' initiative and the establishment of a renminbi settlement platform for trade between China and Portuguese-speaking countries.
Players in Macau are free to access overseas gaming websites on a passive basis; however, betting companies are subject to no regulation and therefore cannot operate within the Macau jurisdiction. While there are no specific penalties concerning remote gambling, there is a risk that the government will consider remote gambling to be an illegal activity in light of new laws.
The government has revamped its regulatory measures regarding the prevention of money laundering and the financing of terrorism. This regulatory trend originated from the mandate of Administrative Regulation 7/2006. The government is sending a clear signal that Macau has renewed its commitment to the prevention of money laundering and the financing of terrorism in line with the Asia Pacific Group on Money Laundering, which will issue a report later in 2016.
The 2007 Mutual Evaluation Report on Macao, China highlighted the absence of asset-freezing mechanisms in the Macau legal system, which were required for compliance with Macau's obligations under resolutions adopted by the UN Security Council in the context of fighting terrorism. The government has now presented a draft law on a legal regime for the freezing of assets to the Legislative Assembly.
The recent rapid growth of Macau's economy, largely based on the gaming industry, has resulted in the highest income per capita in the world. However, the same economic developments have put enormous pressure on the human and social fabric of Macau. The consequences of these economic and social changes have been tentatively remedied by measures announced by Macau's secretary for security.
The new Land Law recently entered into force, revoking and replacing the previous Law 6/80/M. Under the new law, the concession of land is given on a provisional basis and becomes permanent with the use of the land. It is expressly stated that provisional concessions cannot be renewed, except when the land concession is attached to a definitive land concession and both lands are utilised together.
The Macau Economic Department recently issued a set of instructions regarding what should be considered illegal in ads for games of fortune and chance. It remains to be seen whether the instructions will form the basis of a new law or a revision of the existing law. For now, gaming operators may disregard the instructions and continue to develop ads pertaining to their activities.