MACAU SAR, CHINA Law and Practice Contributed by: Frederico Rato, Pedro Cortés and Calvin Tinlop Chui, Lektou
3.3 Restrictions and Controls on Foreign Currency Exchange Macau is a free port and there are no general exchange controls or restrictions on, and regarding, foreign cur- rency exchange. 3.4 Restrictions on the Borrower’s Use of Proceeds The use of the proceeds from loans or debt securities is determined by the agreements between the lender and borrower; aside from those contractual terms, there are no statutory restrictions on how borrowers may apply the funds. 3.5 Agent and Trust Concepts The concepts of agent and trust are both recognised in Macau. The agent is commonly referred to as the mandatário and typically appears, in the context of syndicated loans, acting as an administrative figure. At times, a special irrevocable power of attorney arrangement may be considered. Trusts were introduced into the Macau legal system by the enactment of Law No 15/2022 on 1 December 2022, the “Trust Law”. 3.6 Loan Transfer Mechanisms Credit assignment and contractual position assign- ment are the main loan transfer mechanisms that exist under Macau law. Through credit assignment, the lender can assign to any third party, partly or wholly, the credit in question, without the consent of the borrower, unless otherwise stated in the law or by agreement, or unless the credit is, by its very nature, linked to the personal quality of the lender. In the absence of any contrary agreement, credit assignment also transfers the associated secu- rities to the assignee, as long as the securities can be transferred by the assignor. Through contractual position assignment, a party to a particular loan arrangement (in this case, the lender) can transfer its contractual position in its entirety to any third party, but the lender must have the consent of the other party (in this case, the borrower) to do this.
of transactions that the applicant proposes to conduct, including the effectiveness of the capital constraints and replenishment mechanisms; • the appropriateness/alignment of the objectives of the applicants with regard to the economic and financial policies pursued by the official bodies in Macau; • for foreign qualifying shareholders, the economic and financial situation of their residence, the regu- latory capacity of the foreign authorities, as well as the effectiveness of the co-operation between these authorities and the AMCM; and • any other prudential factors that contribute to maintaining the overall stability and effective opera- tion of the financial system of Macau. 3. Structuring and Documentation 3.1 Restrictions on Foreign Lenders Providing Loans Any local or foreign entity in Macau that provides lending on a habitual basis and with a view to profit must abide by the regulations described in 2.1 Pro- viding Financing to a Company . The applicability of the requirements described does not depend on the origin of the entities. Nonetheless, it is common for foreign institutions not registered in Macau to grant loans, including syndi- cated loans. This form of lending is not considered habitual, so it does not contravene the rules estab- lished by the Macau Financial System Act. 3.2 Restrictions on Foreign Lenders Receiving Security There are no prohibitions imposed on granting secu- rity or guarantees to foreign lenders. However, in accordance with the Macau Commercial Code, com- panies cannot provide personal or real guarantees for the obligations of third parties, unless such guaran- tees serve the company’s own interest, which must be expressly declared and reasoned in writing by the company’s administrative body.
350 CHAMBERS.COM
Powered by FlippingBook