Trade in Services

Trade in Services

Under CEPA, service suppliers in Hong Kong enjoy preferential treatment when setting up business in most service sectors in the Mainland. Many of these are sectors in which Hong Kong has competitive advantages. The preferential treatment takes various forms, including allowing wholly-owned operations, relaxing restrictions on equity shareholding, reducing registered capital requirements, relaxing restrictions over geographical location and business scope, etc.

• Legal Text of the Second Agreement Concerning Amendment to the CEPA Agreement on Trade in Services
• Legal Text of the Agreement Concerning Amendment to the CEPA Agreement on Trade in Services
• Legal Text of the Agreement on Trade in Services
• Liberalisation Measures and Relevant Mainland Rules and Regulations (by Service Sector)
• Mutual Recognition of Professional Qualification and Agreements on Mutual Exemption of Examination Papers

Hong Kong Service Supplier (HKSS)

Both "natural persons" and "juridical persons" of Hong Kong can enjoy preferential treatment offered by the Mainland if they fulfil the definition of HKSS under CEPA.

• HKSS as a "natural person" means a Hong Kong permanent resident, whereas HKSS as a "juridical person" means any legal entity duly constituted or organised under applicable laws of Hong Kong (i.e. corporation, partnership, sole proprietorship, etc.) and which has engaged in substantive business operations in Hong Kong.
• HKSS as a juridical person should apply to this Department for an HKSS Certificate, and then apply to relevant Mainland authorities for providing services in the Mainland with CEPA treatment. HKSS who wants to enjoy the CEPA treatment as a natural person is not required to apply for an HKSS Certificate.

• Application for Certificate of Hong Kong Service Supplier

"Allowing Hong Kong-invested enterprises to adopt Hong Kong law" and "Allowing Hong Kong-invested enterprises to choose for arbitration to be seated in Hong Kong"

In October 2024, the Mainland and Hong Kong signed the Second Agreement Concerning Amendment to the Agreement on Trade in Services, which incorporated the measures "allowing Hong Kong-invested enterprises to adopt Hong Kong law" and "allowing Hong Kong-invested enterprises to choose for arbitration to be seated in Hong Kong" into CEPA. The amendments support the expansion of the applicable scope of these two measures in the Guangdong-Hong Kong-Macao Greater Bay Area.

The Mainland has extended the measure of “allowing Hong Kong-invested enterprises to adopt Hong Kong law” from Qianhai, Shenzhen to the municipalities of Shenzhen and Zhuhai. After the extension, where either party or both parties are Hong Kong-invested enterprises established and registered in Shenzhen or Zhuhai, the parties may choose Hong Kong law as the law applicable to the contract, except that it would be contrary to mandatory provisions of the laws of the state or would damage social and public interests.

The measure of “allowing Hong Kong-invested enterprises to choose for arbitration to be seated in Hong Kong” has been further extended from the Pilot Free Trade Zones (FTZs) in the Mainland to include the nine Mainland municipalities in the GBA. After the extension, where either party or both parties are Hong Kong-invested enterprises established and registered in FTZs in the Mainland and the nine Mainland municipalities in the GBA, the parties may choose Hong Kong as the seat of arbitration, even in the absence of any Hong Kong-related elements.

Application scope and details of both measures are set out in:

• "Official Reply on the Issues concerning the Validity of the Adoption of Hong Kong or Macao Law as the Applicable Law of Contracts or the Designation of Hong Kong or Macao as the Seat of Arbitration by Hong Kong or Macao-Invested Enterprises Registered in the Mainland Part of the Guangdong-Hong Kong-Macao Greater Bay Area" (Fa Shi No. 3 [2025]) (Feb 2025) (in Chinese only); and
• "Opinion on Fully Leveraging the Functions of Arbitration to Serve the High-Quality Development of the Guangdong-Hong Kong-Macao Greater Bay Area" (Feb 2025) (in Chinese only).