1. Countries
  2. Residence
  3. Hong Kong
  4. CEPA Hong Kong Agreement

Hong Kong

Hong Kong is one of the world’s leading business hubs, combining a free-market economy, low taxation, and world-class infrastructure. As an international finance and trade center, it offers investors strategic access to mainland China and global markets.

Overview of the CEPA Hong Kong Agreement

The Closer Economic Partnership Arrangement (CEPA), signed in 2004 between Hong Kong and mainland China, is a free trade agreement that enhances market access for Hong Kong companies. CEPA covers three main areas:

  • Trade in goods
  • Trade in services
  • Trade and investment facilitation

Through CEPA, Hong Kong-based companies gain preferential treatment in the mainland market, often enjoying advantages beyond China’s WTO commitments.

Goods Trade Framework

  • Zero tariffs: 273 Hong Kong-made goods categories can be exported tariff-free to mainland China.
  • Expansion: Since 2006, additional categories can qualify upon manufacturer application.
  • Rules of origin (ROO): Products must meet CEPA’s origin rules (principal process rule, change in tariff heading, or 30% value-added requirement).
  • Certification: Manufacturers must obtain a Certificate of Hong Kong Origin – CEPA to claim tariff benefits.

This framework strengthens Hong Kong’s role as a manufacturing and innovation hub, especially for products with high intellectual property value.

Services Trade Framework

CEPA grants Hong Kong companies early and preferential access to 18 service sectors, including:

  • Banking, insurance, and securities
  • Legal, accountancy, and consulting
  • Construction, logistics, and transport
  • Tourism, healthcare, and audiovisual industries

To qualify, a company must be incorporated in Hong Kong, pay profits tax locally, employ at least 50% of its staff in Hong Kong, and have operated for three to five years depending on the sector.

Measures to Facilitate Trade and Investment

Both sides agreed to enhance cooperation in key areas to improve trade and business opportunities:

  • Simplified customs clearance
  • Quarantine and inspection of goods
  • Food safety and quality assurance
  • Development of small- and medium-sized enterprises
  • Promotion of Chinese medicine and medical products
  • Support for e-commerce and digital trade
  • Trade promotion and investment cooperation
  • Transparency in laws and regulations