Macau (or Macao) was established as a Special Administrative Region ("SAR") of the People's Republic of China on December 20, 1999, after 442 years of Portuguese rule. Since then, Macau has enjoyed a high degree of autonomy following the "One Country, Two Systems" formula - guaranteed until 2049 both under the Sino Portuguese Joint Declaration and the Basic Law, Macau's constitutional agreement with Beijing. Macau has its own currency (the "Pataca" or "MOP") and its own borders.

The driving forces of Macau's economy, one of the most rapidly growing economies in Asia, are the tourism and gaming industries. In 2005, its status as a tourist destination was enhanced by the 29th session of the World Heritage Committee of the UN Educational, Scientific and Cultural Organization (UNESCO), which classified the historic centre of Macau as a World Heritage Site.

Macau has hosted a number of major international sporting events, notably the 2005 East Asian Games, as well as various Olympic teams during their preparation for the Beijing Olympic Games 2008 due to its geographic location and also to its widely recognized excellent sporting facilities.

The long established gambling industry is another lifeline of the economy, accounting for more than 40% of Macau's gross domestic product over the past decade. The gaming monopoly ended on 31st March 2002, when, following an international public tender, the Macau Government granted three new gaming concessions - to Sociedade de Jogos de Macau, Galaxy Casino and Wynn Resorts, all of which have undertaken large investments, a few of them being still under development. Each of the concessionaires has subsequently granted one sub-concession, resulting in a total of six gaming licences (Sociedade de Jogos de Macau to MGM Grand Paradise Limited, Galaxy Casino to Venetian (Las Vegas Sands), and Wynn Resorts to the Melco Crown joint venture).

The robust performance of Macau’s tourism has continued throughout the past years following the opening of a number of key entertainment and gaming attractions, such as Phase 1 of Wynn Resorts Casino (Sep 2006), Grand Lisboa Casino (Feb 2007) and Hotel (Dec 2008)), Crown Macau (May 2007), Venetian Macau Resort on the so-called Cotai strip (August 2007),MGM Grand (December 2007), Ponte 16 Complex (February 2008), and the City of Dreams located on the Cotai Strip (June 2009) to name but a few.

With the conclusion of additional convention facilities, Macau is also gaining an increasingly active role in the MICE industry.

Gaming revenue grew continuously and overtook that of Las Vegas in 2007. In the beginning of 2009, gaming revenues stood at just over MOP 7.42 bn (down by 30% compared to January 2008 - MOP10.43 bn); in 4Q of 2009 the figure had rebounded to just over MOP11 bn. Record numbers are again expected for 2010, following signs of recovery from the global economic crisis.

Macau’s legal system may be characterized as a civil law system, based upon statutory law. Case law does not establish binding precedents, albeit generally respected. The main principles and provisions contained in Macau codes, rules and regulations set out the legal framework to observe in private relationships. Doctrine also holds an important role in the interpretation of Macau statutes and their application to practical situations.

The Macau legal system is bilingual. Both Chinese and Portuguese are official languages and all laws are equally drafted in bilingual versions. Whilst Chinese is increasingly used in the public administration, Portuguese language is still widely used in judicial proceedings, where the influence of the Portuguese legal system and principles are greatly reflected. The Judiciary system is widely regarded as independent and reliable.

The robust economic performance in Macau has been benefiting from the Closer Economic Partnership Arrangement established with China in October 2003. Goods from Macau enjoy zero tariffs when exported to the Mainland ("CEPA"). Supplement III of the Implementation Measures was announced in June 2006; which offers relaxed measures to Macau-based enterprises and professionals in services sectors (such as legal, construction, audiovisual, distribution, tourism, transport, individually owned stores, convention and exhibition) when entering markets in the Mainland.

The Arrangement between Mainland China and the Macao SAR on the Mutual Recognition and Enforcement of Civil and Commercial Judgments came into effect in April 2006. Meanwhile, in respect of the enforcement of arbitration awards, the same governments signed an Agreement for the Reciprocal Confirmation and Enforcement of Arbitral Awards, which became effective on January 1, 2008. There are now few grounds on which the courts of one jurisdiction may decline to enforce the judgments or arbitral awards of the other; no review of the merits of the judgment is permitted, but exceptions on grounds of public policy are allowed.

The most significant recent legislative enactments were mainly in the field of Employment Policies and a law revising the Macau Commercial Code enacted in 1999.

The much debated new Employment Law was approved, to become effective on 1st January 2009..

A law amending the Macau Commercial Code, introducing changes aimed at simplifying Companies’ procedures was published on 10 August 2009 to enter into force on 10 October 2009

A new law on the employment of non-resident labour was published was published October 2009 and became effective on 26 April 2010.

You may check our news section for more details on legal and regulatory developments.

[1] Information of the Macau Economic Services