The recent amendment of the Closer Economic Partnership Arrangement (“CEPA”) between mainland China and Hong Kong will facilitate broader access to markets across the boundary for Hong Kong-based businesses, allowing them to more readily tap into the ample opportunities on offer.
The CEPA, a free trade agreement originally signed between mainland China and Hong Kong in 2003, provides eligible companies and individuals from Hong Kong with preferential access to mainland markets. It covers four main areas: trade in goods, trade in services, investment, and economic and technical cooperation. An amendment in 2019 broadened the scope of the CEPA to encompass 153 service industries.
The Amendment Agreement II is set to take effect on 1 March 2025. The latest revision will bring forth a slew of liberalisation initiatives in industries where Hong Kong traditionally excels, including construction, engineering, financial services, telecommunications, testing and certification, and tourism. Various types of measures will be implemented, such as lifting or easing limits on equity ownership and business scope. Relaxation of restrictions also applies to the criteria for Hong Kong-based professionals offering certain services.
In addition to measures tailored to specific industries, the latest amendment will enable Hong Kong-based enterprises to leverage the city’s premier legal and arbitration services for their business endeavours on the Mainland.
The majority of the initiatives are applicable across the entire Mainland. A select few measures will be targeted specifically for pilot trials in the nine municipalities of the Pearl River Delta region within the Guangdong-Hong Kong-Macao Greater Bay Area – home to a population of over 86 million.