MACAU SAR, CHINA Law and Practice Contributed by: João Nuno Riquito, Nelson de Azevedo, Belmiro Leong and Kimberley Cheong, Riquito Advogados
1. Corporate Governance Requirements 1.1 Corporate Forms and Governance Requirements Corporate Structures Business activities in Macau may be carried out through several routes: • operating as an individual entrepreneur; • incorporating a Macau company; • establishing a branch or representative office of a foreign company; or • forming a joint venture between individuals or enti - ties. Incorporating a local company is the most common option because a company is a legal entity separate from its shareholders. As a result, shareholders are generally not personally liable for the company’s debts, except in cases provided by law. Under Article 174 of the Macau Commercial Code (MCC), local companies are classified as general partnerships ( sociedades em nome colectivo ), lim - ited partnerships ( sociedades em comandita ), limited liability companies by quotas ( sociedades por quotas ) or limited liability companies by shares ( sociedades anónimas ). In practice, the last two forms are the most common because they offer the greatest protection against personal liability for corporate obligations. Although many investors incorporate a local company, foreign enterprises often choose to operate through a branch or representative office in Macau. This may reflect accounting considerations at the parent-com - pany level, regulatory or tax factors, or the limited scope of activity involved, which does not justify the resources required to set up a headquarters. Many well-known international financial institutions estab - lish branches or representative offices in Macau to conduct financial activities. In some sectors, for specific commercial or regula - tory reasons, business is also carried out by individual natural persons. A notable example is gaming col - laborators, commonly known as “sub-junkets”, which require special authorisation from the Gaming Inspec -
tion and Coordination Bureau ( Direcção de Inspecção e Coordenação de Jogos – DICJ) under Article 21 of Law 16/2022 Legal Regime for Operating Games of Chance in Casinos, because the collaborators are personally liable for the gambling debts of their client, vis-à-vis the promoters with whom they collaborate. For certain large-scale infrastructure projects, such as the light rapid transit (LRT) and cross-sea bridge construction, many companies choose to operate in the form of a joint venture during the procurement or construction phases, particularly where the technical complexity and capital requirements are substantial. This structure allows the parties to divide responsibili - ties and spread risk. Corporate Governance Requirements Macau has not adopted a unified Corporate Govern - ance Code applicable to all companies. Corporate governance in Macau is primarily established on the legal foundation of the MCC. All entities registered in Macau must comply with the MCC, which stipulates directors’ liabilities, shareholders’ rights and the fun - damental operational structure of a company. In regu - lated sectors such as gaming and finance, additional governance obligations apply under sector-specific legislation and regulatory guidance. Further details are set out in 1.2 Corporate Governance Legislation and Regulation , 1.3 Companies With Publicly Trad- ed Shares and 1.4 Stock Exchange Requirements Developments . 1.2 Corporate Governance Legislation and Regulation The principal source of corporate governance in Macao is the MCC, which applies to commercial entities registered in Macau. Its rules cover four main areas: management structure, directors’ responsibili - ties, shareholders’ rights and creditor protection. Management Structure The mandatory corporate organs depend on the type of company. In limited liability companies by quotas, the management body may consist of one or more directors, while a supervisory body is not mandatory unless the company has more than ten shareholders or its assets exceed the relevant threshold. In limited liability companies by shares, a Board of Directors
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