The Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA) is a free trade agreement signed between the Mainland and Hong Kong in 2003. Adopting a building block approach, CEPA has continued to expand in content and scope over the years.
- On trade in goods, the Mainland has fully implemented zero tariff on imported goods of Hong Kong origin1. To deepen the liberalisation and facilitation of trade in goods between the two sides, the Agreement on Trade in Goods has included four dedicated Chapters on "Customs Procedures and Trade Facilitation", "Sanitary and Phytosanitary Measures", "Technical Barriers to Trade" and "Trade Facilitation Measures in the Guangdong-Hong Kong-Macao Greater Bay Area".
- On trade in services, the two sides have basically achieved liberalisation. Hong Kong service suppliers can enjoy preferential access to the Mainland market in most service sectors. The preferential treatment of the liberalisation measures takes various forms, including allowing wholly-owned operations, relaxing equity share restrictions, reducing registered capital requirements, as well as relaxing restrictions over geographical location and business scope, etc. The Agreement Concerning Amendment to the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA) Agreement on Trade in Services was signed on 21 November 2019. It has further lowered the market access thresholds and provided for more facilitating measures for Hong Kong enterprises and professional sectors to tap into the Mainland market. The Amendment Agreement will be implemented on 1 June 2020.
- Eligible Hong Kong professionals such as architects, structural engineers, lawyers, doctors etc., might acquire the corresponding Mainland's professional qualifications through mutual recognition or examinations. Besides, if such architects or structural engineers are engaged or employed by relevant enterprises in the Mainland, they are allowed to register for practice in designated provinces and cities and establish architectural design, structural engineering or other related firms or operate those firms in the form of partnership or association with their Mainland partners. Law firms in the form of association with Mainland partners can provide one-stop cross-border legal services, and share operating costs and profits with their Mainland partners.
- The Central Government announced on 6 November 2019 to further extend the scope of mutual recognition of qualifications for construction professionals to facilitate the renewal of construction professionals' qualifications, and enable architects and structural engineers who are members of relevant professional institutes in Hong Kong to commence work on the mutual recognition of membership with corresponding institutes on the Mainland. Also, Hong Kong construction and related engineering professionals who have obtained relevant professional qualifications are allowed to extend their areas of services from Guangdong, Guangxi and Fujian to all provinces of the Mainland.
Video on CEPA
CEPA Promotional Leaflet on the Agreement on Trade in Services
- As to the legal profession, currently eligible Hong Kong permanent residents may sit the National Unified Legal Professional Qualification Examination (formerly known as the National Judicial Examination). Candidates who pass the examination will be granted a Certificate of Legal Professional Qualification. In 2018, a total of 108 Hong Kong residents passed the examination.
- Starting from March 2019, the geographical scope of setting up partnership associations by Hong Kong and Mainland law firms has been extended from Guangzhou, Shenzhen and Zhuhai to the entire Mainland. As of October 2019, 11 partnership associations between Hong Kong and Mainland law firms have been set up, with seven in Shenzhen, two in Zhuhai and two in Guangzhou, and there are 39 Hong Kong lawyers being seconded to the partnership associations. Hong Kong barristers and solicitors have also been retained as legal consultants by Guangdong law firms.
- The Ministry of Justice and the Department of Justice signed a record of meeting in January 2019, agreeing in principle to further expand the liberalisation measures relevant to partnership associations and legal consultants. In particular, the "Trial Measures of the Department of Justice of Guangdong Province on Hong Kong Law Firms and Macao Law Firms Operating in the Form of Partnership Association with Mainland Law Firms in Guangdong Province (2019 Revision)" took effect on 1 August 2019 and will last for three years. Measures include removing the minimum capital input ratio requirement of 30% by Hong Kong partner firms in the partnership associations set up by Hong Kong and Mainland law firms in Guangdong Province, allowing the employment of Hong Kong, Macao and Mainland lawyers in the name of the partnership associations and allowing partnership associations to handle legal matters on administrative litigation, etc.
- The Central Government announced on 6 November 2019 that Hong Kong legal practitioners can be employed as legal consultants by one to three Mainland law firms simultaneously. The approval requirement for the employment of Hong Kong legal practitioners as legal consultants is changed to filing procedures, and annual registration is no longer required. Moreover, eligible Hong Kong legal practitioners, upon passing a special examination, will be qualified to practise in specific areas of Mainland law in the nine Mainland cities of the Greater Bay Area. The details and the commencement date of the measures on legal consultants and special examination are pending from the Mainland side.
- On investment, Hong Kong investors can enjoy investment protection and facilitation in the Mainland.
- On testing and certification, the Agreement Concerning Amendment to the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA) Agreement on Trade in Services was signed on 21 November 2019 to expand the scope of testing of products under the China Compulsory Certification (CCC) System that can be undertaken by qualified testing organisations in Hong Kong in co-operation with designated Mainland organisations from those processed or manufactured in the Mainland or processed in Hong Kong to CCC products processed or manufactured in any place. The measure will enable testing organisations in Hong Kong to provide quality testing services for the huge Mainland consumer goods market (including products imported from other places).
- On economic and technical cooperation, the two sides have agreed to enhance cooperation in 22 areas to meet the development trends and needs of Hong Kong and the Mainland, and promote the Belt and Road Initiative as well as economic and trade cooperation for the Guangdong-Hong Kong-Macao Greater Bay Area, providing new directions for closer cooperation.
1 Not including those prohibited by the Mainland's rules and regulations and those prohibited as a result of the implementation of international treaties by the Mainland, as well as products that the Mainland has made special commitments in relevant international agreements.