The SMEs are propelling growth in Macau’s Economy. Read the blog to know how you can help SMEs and enter the logistics market at the same time.
Known for its booming hospitality and tourism industry, Macau has one of the top 3 GDP per capita in the world (expected to reach USD $115,000 by the end of 2022) as well as one of the most business-friendly economies in the world. With the growing strength of its SMEs and multiple recent initiatives and projects aimed at increasing the integration and economic strength of the area, Macau presents a strong business opportunity within the logistics industry with few threats and a large and wealthy customer base.
Since becoming a Special Administrative Region under China in 1999, the number of tourists visiting Macau has grown over 400%. The economy is heavily dependent on the gaming sector and tourism, which is responsible for 85% of the region’s GDP and 80% of their tax revenue. As such, the vast majority of SMEs within the city are in the hospitality and tourism sector. The strength of SMEs within this industry is expected to grow in the coming years, and with it a need for logistics and infrastructure support. Over 99% of enterprises in Macau are SMEs, but they currently only contribute to 20-25% of the region’s GDP.
According to the Macau Doctoral Think Tank forecast, with initiatives designed to support the growth of small and medium-sized enterprises, the contribution rate of SMEs to GDP is expected to rise to 50% by 2030. Since the issuing of e-visas and package tours from mainland China were resumed in September 2022, Macau’s tourism economy has been rapidly recovering from the pandemic. The vice president of the Federal General Commercial Association of Macau Small and Medium Enterprises stated that these measures are expected to increase sales figures in local enterprises by 30-40% and double the number of tourists visiting daily. This package tour arrangement includes visitors from Shanghai, Guangdong, Fujian, Jiangsu, and Zhejiang, all of which are wealthy cities with high consumption ability. As the primary consumers of MBE services, this presents an opportunity to enter the logistics industry, the need for which will be growing alongside SMEs in the coming years.
Macau is one of the 11 cities in the Great Bay Area, which is one of the most developed and populous regions in the world. The area’s GDP reached USD $2 trillion in 2021, and mainland China’s government is working on projects to further expand infrastructure connectivity, integration, and economic strength in the region. The completion of the Hong Kong-Zhuhai-Macau Bridge in 2019, which is the longest sea crossing in the world, further integrated this region and facilitates easier travel to Macau from nearby wealthy areas.
The development of the Hengqin New Area, a tourism island in Zhuhai designed to support Macau’s tourism industry, has support from the Chinese government to develop finance, logistics, and cross-border e-commerce support in the region. It has also succeeded in improving the investment climate and simplifying procedures for companies to operate businesses in the area. Several other recent high-profile projects and initiatives, such as the China-Portuguese Speaking Countries Cooperation and Development Fund and the Pan-Pearl River Delta Regional Cooperation Framework Agreement, will further open the economy in this area and promote joint prosperity.
Macau is home to a very open and business-friendly economy, ranked 32nd out of 180 on the list of freest economies in the world and 8th in the Asia-Pacific region. The government promotes an open market with its simple and low taxation system, free port policy within a separate customs territory, efficient legal system for business making, and political stability. The region has free trade and no foreign exchange controls and is ideally positioned a maximum of four hours away from all of Asia’s key markets. Starting and operating a business is relatively simple; it takes 12 days for a company to be registered in Macau, and there are no restrictions or constraints towards investors looking to open a business. In addition, there is a very low corporate tax rate of 12%, and the first $75,000 of revenues is exempt from taxes. There are currently few logistics and service providers within Macau, but the need for the industry is expected to grow rapidly in the coming years.
Start a New Business in Macau With MBE
MBE provides very good business opportunities for Macau. To learn more about the opportunity, contact us and we will provide you with more details on the opportunity.