Marc Cormack-Bissett
Director, Head of Operations - Asia
Unlocking Mainland China's Market: New CEPA Reforms for Foreign Businesses
Hong Kong has long been the gateway to China, offering a stable legal system, low taxes, and free capital flow. The latest amendment to the Closer Economic Partnership Arrangement (CEPA) - effective 1 March 2025 - makes it even more attractive, especially for businesses without an existing Hong Kong presence.
What's Changed?
The new CEPA amendment introduces sweeping liberalisation across key sectors, removing barriers for international companies looking to enter Mainland China via Hong Kong. Notably:
- Financial Services: Relaxed rules for investment in insurance and banking services, plus potential expansion of cross-border investment schemes.
- Construction & Engineering: Easier access to projects in the Greater Bay Area (GBA).
- Media & Entertainment: Fewer restrictions on Hong Kong-led film production and broadcasting in China.
- Tourism: Streamlined visa policies and enhanced access to Mainland cruise and travel markets.
- Legal & Arbitration: Hong Kong businesses can now apply Hong Kong law and seat arbitrations in Hong Kong when operating in China - an advantage for risk management and dispute resolution.
Why It Matters?
For foreign companies, these changes offer a fast-track route into China without the complexities of direct market entry. Setting up in Hong Kong under CEPA gives businesses unparalleled preferential access, reducing costs and regulatory hurdles. Additionally, the removal of the three-year operating requirement for Hong Kong service suppliers makes it easier for new entrants to qualify for CEPA benefits.
What Next?
If your business is considering expansion into China, Hong Kong is now an even more strategic entry point. We'd be happy to discuss how CEPA's new provisions can support your market strategy.
Chris McComb
Director of Strategic Engagement, APAC