CEPA Hong Kong Agreement

Hongkong

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.