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On May 27, 2010 Hong Kong and mainland China signed the seventh supplement to the Closer Economic Partnership Arrangement (CEPA) further facilitating access of Hong Kong firms to the mainland market. The Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA) is a bilateral free trade agreement between mainland China and Hong Kong, which came into effect in January 2004. Under CEPA, Hong Kong based companies and Hong Kong made products gain preferential access to the mainland China market.
The seventh supplement further relaxes the market access conditions in 14 sectors and enhances trade and investment facilitation by increasing cooperation in the cultural, environmental, education, innovation and technology industries. Some of the specific facilitation measures include the following:
1. Hong kong registered health-care professionals can provide short-term services in the mainland.
2. Hong Kong service suppliers (HKSS) can set up wholly-owned hospitals or hospitals based on an equity joint venture or contractual joint venture in certain mainland provinces.
3. Hong Kong travel agents established on a wholly-owned or joint venture basis in Beijing and Shanghai can arrange for group tours from those cities to Hong Kong and Macau.
4. Hong Kong banks that have established foreign banking institutions in the mainland can establish specialized institutions to provide financial services to small enterprises.
5. A Hong Kong bank with a representative office in the mainland for more than year can set up a wholly foreign-funded bank or a foreign bank branch in the mainland.
6. Mainland branches of Hong Kong banks that have been in operation for more than two years and profitable for at least a year can conduct yuan business.
7. Hong Kong professionals who have obtained mainland qualifications in the construction sector can act as partners to set up construction and engineering design offices in the mainland.
8. Hong air transport sales agencies that are setup in the mainland can operate air transport sales agency services in the domestic routes in the mainland.
9. Hong Kong distributors that have setup operations in the mainland can sell Hong Kong publications.
10. Testing organizations in Hong Kong can undertake technical testing, analysis and product testing services in collaboration with designated mainland organizations.
11. Hong Kong audio-visual enterprises can set up mainland operations to produce video and sound recording products.
12. Hong Kong companies can provide specialty design services by setting up wholly owned subsidiaries in the mainland.
13. Hong Kong residents with Chinese citizenship can setup certain individually-
Hong Kong companies are sure to receive a boost with the enhanced framework, especially companies in the services sector. As China's influence in the world continues to grow, increasing number of foreign enterprises are moving to the East. Hong Kong's proximity to China and the close ties it shares with the mainland through CEPA, makes it natural platform for companies that wish to enter the China market.
Foreign investors and entrepreneurs who wish to access mainland China and do business in the region find it advantageous to register a company in Hong Kong (http://www.guidemehongkong.com/
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