MACAU SAR, CHINA Trends and Developments Contributed by: João Nuno Riquito, Bruno Almeida, Belmiro Leong and Kimberley Cheong, Riquito Advogados
Moreover, an even greater number of companies are also not subject to the statutory obligation of having a single supervisor or supervisory board – pursuant to the Commercial Code, only public limited com - pany ( société anonyme ; SA) – companies are under such obligation. In other words, more than 90% of the companies incorporated and in business in Macau are not required to have their accounts and financial statements approved by an in-house supervisor (who must a certified auditor), or reviewed by an independ - ent external auditor, nor published for the purposes of public knowledge and scrutiny. One of the reasons that may be behind the delay in modernising the Macau Commercial Code is the fact that there is no stock market in the MSAR, and hence no publicly traded companies and no securities issued and negotiated locally. Also, for various reasons of a different nature, the number of limited liability compa - nies by shares (also designated as SA companies) is relatively insignificant as compared to quota compa - nies. The latter are traditionally viewed as more intui - tus personae and less prone to being legally subject to more complex governance structures or disclosure rules. Notwithstanding the above, the overall CG framework has seen significant progress in Macau at various lev - els. The Turning Point In line with the goals of international integration and economic diversification, Macau’s CG system has undergone an ambitious institutional transformation since 2020, with the SAR government strategically targeting specific industries and regulatory practices. This transformation began with a focus on fiscal trans - parency and has gradually extended to core sectors of MSAR such as gambling, finance and public capital operations. In 2020, an amendment to the Corporate Tax Regu - lation introduced the concept of the ultimate parent company. Rather than merely a technical adjustment, this represents a veritable milestone insofar as the law began to take the necessary steps to unveil the cor - porate structure that had previously obscured internal power dynamics. With this innovation, as well as with
the approval of transfer pricing regulations, CG shifted towards early warning and compliance in accordance with international standards, through the elimination of intentional profit manipulation by related entities. The approach also forced companies to restructure their internal accounting and management to ensure a standard of objective transparency previously unseen in the Macau legal system. Version 2.0 of the Macau Gaming Law The 2022 amendment to the Gaming Law (Law No 16/2001, as amended by Law No 7/2022) serves as one of the most prominent examples of the new gov - ernance scheme. The new law imposes certain restric - tions on capital and dividend distribution, ensuring that companies can maintain the financial stability necessary to fulfil their long-term commitments to the MSAR. Furthermore, by creating a model of corporate social responsibility, the Gaming Law expanded the scope of directors’ duties beyond mere profit margins by requiring concessionaires to focus on the interests of the community and the future development of the MSAR. Publicly Owned Enterprises as Part of Modernisation Efforts Subsequently, the approval of the Legal Framework for Publicly Owned Enterprises (Law No 18/2023) in 2023 addressed a critical problem of this type of enterprise. For decades, public enterprises in Macau have been regarded as extensions of the government rather than as market operators, and public account - ability was limited. However, the new law effectively solved this issue by mandating external audits, per - formance evaluations and rigorous financial disclo - sure systems. Public enterprises now follow modern governance standards and are subjected to the same levels of efficiency and transparency as those in the private sector. The Legal Framework for Publicly Owned Enterpris - es officially entered into force on 1 November 2023. As Macau’s first piece of legislation of its kind, the law’s core objective is consolidating previously frag - mented regulatory models and ensuring the prudent use of public funds. It establishes a comprehensive oversight mechanism covering pre-emptive, concur - rent and post-event stages, effectively enhancing the
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