Macau Special Administrative Region of People’s Republic of China Jurisdiction

By Raquel Ferreira Alves

Raquel Ferreira Alves earned LL.B. from the Faculty of Law at Universidade Nova de Lisboa, Portugal (1998-2003) and Advanced LL.M. in International Business Law from Católica Global School of Law, Portugal and Duke University School of Law, United States (2015/2016). She is an Associate Lawyer at Abecasis, Moura Marques, Alves Pereira & Associates (AAMM), a law firm in Lisbon, Portugal where she works mainly in the areas of administrative and public law, procurement law and litigation.

Raquel’s research interests include primarily medical law and life sciences. She is now taking a Post-grade course of Health & the Law in the Institute for Criminal Law and Criminal Sciences of the University of Lisbon School of Law for master thesis research purposes. From 2007 to 2015, Raquel had lived and worked in the Macao Special Administrative Region (Macao) of the People’s Republic of China, firstly as a local Lawyer in a Luso-Chinese law firm, and afterwards as a Legal Consultant/Adviser at the Macau Government Health Bureau. Raquel is a permanent resident of Macao and is registered at the Macao Lawyers Association.

Published May/June 2017
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1. Introduction and General Background

The Portuguese arrived in Macau in the year of 1557 and settled in the territory for nearly 500 years. After an initial period, from 1557 to 1849, of mixed Chinese-Portuguese jurisdiction, there was a colonial period between 1849 and 1974. It followed a post-colonial period in which Macau was under the Portuguese administration until the end of 1999, year of its transfer of sovereignty to the People’s Republic of China (PRC). Since December 20, 1999, Macau is a Special Administrative Region (MSAR) of the PRC. According to Article 31 of the PRC Constitution, “The State may establish special administrative regions when necessary.” Similar to Hong Kong, Macau enjoys a high degree of autonomy from Mainland China under the so-called principle of “One Country, Two Systems”.

Macau is endowed with a Basic Law[1], adopted by the Eighth National People’s Congress at its First Session on March 31, 1993, the main legal document of the Special Region, which defines the social and economic system applicable to the SAR, its administration, legislation and justice. It also provides a constitutional framework for the Special Region establishing a list of fundamental freedoms, rights, and guarantees for its residents. According to this legal document, private ownership was safeguarded, and that the liberal capitalism system inherited from the Portuguese system remained in place.

Geographically situated in the Guangdong province, Macau is a very small region with approximately 31 square kilometres, being also the most densely populated city in the world. It is comprised by a peninsula, named Macau, and two islands, Taipa and Coloane, both linked by the Cotai causeway, a piece of land (named the Cotai strip) reclaimed from the sea, nowadays full of hotels, casinos and entertainment venues. According to the Macau Statistics and Census Service Bureau, the 2016 population by-census results showed that the population of the Region reached 650,900 in August 2016, and that the population density stood at 21,400 persons per km2.

With particular characteristics, Macau is a bilingual region in China, with two official languages: Chinese (in its Cantonese variant) and Portuguese. Both languages are used in all government departments, including the local Courts and the Legislative Assembly, as well as in all official documents.

Macau is a Region that has long been characterized for its mix of Chinese, Portuguese and Macanese culture. It has been regarded as an important historical gateway by which the Western civilization entered in China. In 2005, the historical center of Macau, comprised by a unique blend of Portuguese and Chinese ancient and historical buildings, was recognized as UNESCO World Heritage Site.

2. Macau as an “Autonomous” Region: Legal and Economic Features

Per the Joint Declaration [2] of the Government of the PRC and the Government of the Republic of Portugal on the question of Macau, signed on April 13, 1987, for a period of fifty years from the handover (until 2049), Macau enjoys of a high degree of autonomy except in foreign and defense affairs (matters of the responsibility of the Central People’s Government). This means that Macau is vested with its own executive, legislative and independent judicial powers, including that of final adjudication. Macau also benefits from financial and monetary autonomy with its own currency the Macanese pataca (MOP) that continues to circulate and remains freely convertible. The pataca is linked to the Hong Kong dollar (HKD), being the exchange rate usually quoted in Macau as 1.03 MOP.

While Macau is widely based in the Portuguese law, thus belonging to the civil law tradition, with its major codes, the Civil Code, Civil Procedure Code, Criminal Code, and Criminal Procedure Code, drafted originally in Portuguese and equivalent to the ones that exist in Portugal, in terms of commercial law, the Code includes some legal instruments typical from the common law, which makes it a type of hybrid law. Due to the proximity of other Regions, like Hong Kong, and countries, like Singapore, the two major financial centers in Asia, from a different legal system, there was a need to adapt the Commercial Code to the specific needs of this Special Region. Example of that was the introduction of the floating charge.

Moreover, Macau has a special tax regime making it very attractive for foreign investors. In terms of corporate income tax, taxable profits accrued on the companies’ annual account in the year of 2015 were fully exempted of tax up to MOP 600,000 (that correspondents approximately to USD 75,000). Over this threshold, the taxable profits are subject to tax at a flat rate of 12%. Companies have been exempted of the industrial tax for many years now. In relation to personal taxation, as established by the 2017 Macau Government Budget, the first MOP 144,000 of annual assessable income is exempted from professional tax. The highest professional tax rate is 12% for local residents.

Economically speaking, Macau has executed in 1992 (still under the Portuguese Administration) an agreement for trade and cooperation with the former European Economic Community mainly to extend and deepen economic and trade relations or exports between the parties. Internationally, Macau is known for its good relations worldwide, including Portugal, and it is a member of the World Trade Organization. The Governments of Macau and PRC also signed in 2003 a Closer Economic Partnership Agreement (“CEPA”) to promote the economic and trade exchange cooperation among them. Under this Agreement, Macau goods exported to Mainland China are not subject to customs tariffs. Moreover, companies incorporated in Macau and professionals of service industries enjoy some relevant benefits to enter and invest in Mainland markets.

Notwithstanding the aforesaid, the main components of Macau economy are both tourism and gambling. With the liberalization of Macau’s gaming industry in 2002, it was over the monopoly that lasted for several decades, since 1962, which belonged to the Tourism and Entertainment Company of Macau Limited (also known as “STDM”), a company owned by Stanley Ho and his family. The Macau Gaming Law (Law no. 16/2001) enabled a competitive gambling industry environment in the Region by establishing that three new gaming concessions would be granted through an international tender process. Since 2002, there are three casino gaming concessions operating: Wynn Resorts (Macau), S.A., Galaxy Casino, S.A., and Sociedade de Jogos de Macau (SJM), this last one with its major shareholders being STDM and Stanley Ho. Later on, three additional sub-concessions were authorized to operate in the Region. The Macau Government granted sub-concessions from Galaxy to Las Vegas Sands (the Venetian Macau, S.A.), from SJM to a joint venture between MGM and Pansy Ho, and from Wynn Resorts to a joint venture between Melco and Crown.

From a fishing and trading port in the mid-16th century, strategically located in the Southeast coast of China in the west of the Pearl River Delta, Macau as evolved in the beginning of the XXI century to the world’s biggest gambling hub superseding Las Vegas revenue. Just to have an idea, in 2012, the total gross revenue of the gaming industry increased to more than three hundred billion patacas. Macau is nowadays frequently named as “Las Vegas of Asia”. At the end of 2015, there were 36 casinos operating in the Region. The Parisian, owned by the Las Vegas Sands, is the most recent casino opened in September of 2016.

3. Executive Power

Chief Executive
The Government of Macau is the executive authority of the Region led by a Chief Executive (Gabinete do Chefe do Executivo Governo da Região Administrative Especial de Macau) with broad policymaking and executive powers (although accountable to the Central People's Government and the MSAR in accordance with the provisions of the Basic Law). Per Article 47 of the Macau Basic Law (the constitutional document of the MSAR), “The Chief Executive of the Macau Special Administrative Region shall be selected by election or through consultations held locally and be appointed by the Central People's Government.” The Chief Executive shall be elected by an Election Committee composed by three hundred members of industrial, commercial and financial sectors, as well as of cultural and educational, labour, social and religious sectors, and it is appointed by the Central People’s Government. The specific method for selecting the Chief Executive is established in Annex I of the Macau Basic Law. The Chief Executive shall be a Chinese citizen and a permanent resident of the Region that has ordinarily resided in Macau for a continuous period of not fewer than twenty years. The term of office is five years and no individual may serve for more than two consecutive terms.

Besides leading the Governmentof the Region, the Chief Executive is responsible for:

Chui Sai On is currently the Chief Executive of Macau. Now in its second term of office, he was re-elected in 2014. He is a non-partisan Chief Executive.

General Secretariats
The Government of Macau also comprises five General Secretariats:

  1. Security
  2. Administration and Justice
  3. Economy and Finance
  4. Social Affairs and Culture
  5. Transports and Public Works.

Moreover, it is composed by directorates of services, departments and several divisions. The principal officials of the MSAR shall be Chinese citizens who are permanent residents of the Region and have ordinarily resided in Macao for a continuous period of not fewer than fifteen years. At the time of assuming office, all shall declare their property to the President of the Court of Final Appeal of the MSAR for the record purposes.

In general, the Government has the following powers and functions: to formulate and implement policies; to conduct administrative affairs; to conduct external affairs as authorised by the Central People’s Government under the Basic Law; to draw up and introduce budgets and final accounts; to introduce bills and motions and to draft administrative regulations; and to designate officials to sit in on the meetings of the Legislative Assembly to hear opinions or speak on behalf of the Government. It must abide by the law and it is accountable to the Legislative Assembly of the Region. It shall implement laws passed by the Assembly and already in force; it shall present regular policy addressed to the Assembly; and it shall answer questions raised by the deputies of the Assembly.

Executive Council
The executive structure also includes the Executive Council, an organ that assists the Chief Executive in policymaking. Members of the Executive Council shall be appointed by the Chief Executive from among the principal officials of the executive authorities, members of the Legislative Council and public figures.

Its members shall be Chinese citizens who are permanent residents [3] of the Region and it shall be composed of seven to eleven persons. The Chief Executive may, as he or she deems necessary, invite other persons concerned to sit in on meetings of the Council. The Executive Council shall be presided over by the Chief Executive. The meetings of the Executive Council shall be held at least once a month. Except for the appointment, removal and disciplining of officials and the adoption of measures in emergencies, the Chief Executive shall consult the Executive Council before making important policy decisions, introducing bills to the Legislative Assembly, formulating administrative regulations, or dissolving the Legislative Assembly.

At the level of the executive power, there are other official Officers that play an important role in Macau. On the one hand, the Commission against Corruption, among other functions, carries out preventive actions against acts of corruption or fraud in the Special Region. On the other hand, a Commission of Audit was also established as an autonomous and independent government body, having as its main duties to audit the Macau Government’s general accounts and the financial operations of government departments and entities, as well as government-funded projects and organizations. Both Commissions are accountable to the Chief Executive.

4. Legislative Power

Legislative Assembly
Macau enjoys legislative power, and, per Article 67 of the Basic Law, the Legislative Assembly shall be the legislature of the Region. The Legislative Assembly shall be composed of permanent residents of the Region. The majority of its members shall be elected. The method for forming the Assembly is established in Annex II of the Basic Law. In the first term, the Legislative Council shall be formed in accordance with the decision of the National People’s Congress of the PRC. If there is a need to change the method for forming the Legislative Assembly in and after 2009, such amendments must be made with the endorsement of a two-thirds majority of all the members of the Assembly and the consent of the Chief Executive, and they shall be reported to the Standing Committee of the National People’s Congress for record. The method for electing members of the Legislative Council shall be specified by an electoral law introduced by the Government of Macau and passed by the Legislative Assembly. The Election System of the Legislative Assembly of the MSAR was established by Law no. 3/2001.

Upon assuming their office, the members of the Legislative Assembly shall declare their financial situation. The term of office of the Legislative Assembly shall be four years, except for the first term of office that ended on October 15, 2001. The Chief Executive has the power to dissolve the Legislative Assembly in accordance with the provisions of the Basic Law.

The Assembly has the following powers and functions:

If a motion initiated jointly by one-third of all members of the Legislative Assembly charges the Chief Executive with serious breach of law or neglect of duty, and if he or she refuses to resign, the Assembly may, by a resolution, give a mandate to the President of the Court of Final Appeal to form an independent investigation committee to carry out an investigation. If such committee considers that the evidence is sufficient to substantiate such charges, the Council may pass a motion of impeachment by two-thirds majority of all its members and report it to the Central People’s Government for decision. It can summon persons concerned to testify or give evidence as required when exercising the above-mentioned powers and functions.

President and Vice-President
The Legislative Assembly has a President and a Vice-President elected by and among the members of the Assembly. Both shall be Chinese citizens and permanent residents of Macau that have resided in MSAR for a continuous period of not fewer than fifteen years. The Vice-President substitutes the President in case of its absence. The President shall exercise the following powers and functions:

The Legislative Assembly members may introduce bills. Bills that do not relate to public expenditure or political structure or the operation of the Government may be introduced individually or jointly by members of the Assembly. The written consent of the Chief Executive shall be required before bills relating to Government policies are introduced. A bill passed by the Legislative Assembly may take effect only after it is signed and promulgated by the Chief Executive.

5. Judiciary System

The judicial power belongs to Courts independent from both the legislative and the executive powers (based on the principle of separation of powers). Article 83 of the Basic Law establishes that the Macau Courts shall be subordinated to nothing but the law and shall not be subject to any kind of interference. Paragraph 1 of Article 7 of the Macau Civil Code states that “Courts and judges are independent and are only subject to the law.”

Macau has a three-tier court system composed by the First Instance Courts, the Second Instance Court and the Last Instance Court. This last one, the Court of Final Appeal, has the power of final adjudication, meaning that no appeals from Macau Courts are to be heard at the “Beijing Courts”. Judges shall be appointed by the Chief Executive on the recommendation of an independent commission composed of local judges, lawyers and renowned individuals. Judges shall be chosen on the basis of their professional qualifications. Qualified judges of foreign nationality may also be appointed. The President of the Last Instance Court shall be a Chinese citizen who is a permanent resident of the Region. Trial by jury is never used in practice.

Per the Law of Judicial Organisation (Law no. 9/1999), the judicial system structure in Macau is organized as follows:

The Judicial Base Court and the Administrative Court are both Courts of First Instance, where cases must be initiated. The Judicial Base Courts are divided into a number of several specialized sections. The Judicial Base Court comprises sections with competence in relation to civil, criminal, small causes, labour, family and minors’ disputes. The Administrative Court has jurisdiction over administrative, tax and customs duties cases. The First Instance Courts may operate with a single judge or with a collegial panel. The President of the Courts of First Instance is currently Io Weng San.

The Second Instance Court decides appeals from the first levels Courts, as well as voluntary arbitration proceedings that may be challenged according to the law. Moreover, it is also the Court in which certain proceedings should be initiated. This means that it also judges at first instance as per paragraph 2) of Article 36 of Law no. 9/1999. It is composed of nine judges. The President of the Second Instance Court is currently Lai Kin Hong.

The Last Instance Court is at the top of the courts’ hierarchy and it is composed of three judges. Besides deciding appeals from the Second Instance Court, it has the important function of the uniformization of Macau Court’s decisions. It is also the Court in which a very restricting number of proceedings should be initiated, such as legal actions against the Chief Executive due to exercise of his functions. The President of the Court of Final Appeal is presently Sam Hou Fai.

Public Prosecutions Office
The Public Prosecutions Office is a separate body of magistrates whose main functions are to pursue criminal investigations and to initiate and ensure criminal proceedings, as well as to represent the Special Region and public interests in general, protecting legitimate civil rights and interests and monitoring the application of the law (Article 56 of the Law no. 9/1999). Article 90 establishes that these magistrates shall exercise prosecutorial functions as vested by law, independently and free from any interference.

To have a better idea of the Government Structure of Macau, please have a look on the following chart:

6. Sources of Law

As Macau is a civil law or a Roman-German legal system of continental Europe tradition, the basis of its legal system are statutes that establish the general rules and principles applicable in the Region. Being the most important source of law, statutes are all codified. Legislation is general and abstract. It does not regulate one single case and it does not give many details as to how to solve a situation.

The most important Codes of Macau that were prepared during the so-called “transition period” (from 1988 until the handover in 1999) are:

This collection is globally also known as the “Five Codes.” Per Law no. 3/1999, these Codes, as well as all legislation [4] in force in the MSAR, are available in the Macau Official Gazette (published weekly, on Monday and Wednesday, and organized in Series I and II) in Portuguese and Chinese. The Codes were all drafted originally in Portuguese and then translated into (traditional) Chinese.

The website of the Macau Official Gazette has all legislation for consultation free of charge. A full but non-official English translation of the Commercial Code is also freely available on the website of the Official Gazette. An unofficial English translation of the Macau Basic Law is available on the website of the University of Macau, and a partial translation of the Macau Civil Code is available thanks to the work of Jorge A. F. Godinho, Associate Professor of Law of the University of Macau.

Laws are only compulsory after the publication in the Official Gazette of Macau. Per paragraph 2 of Article 2 of the Civil Code, “A period of time stated by each law shall elapse between the publication and the start of application of laws; in the absence of a stated period, laws shall start to apply on the sixth day subsequent to that of publication.” This time period between the publication date of the law and its entry in force is called, in Latin, vacatio legis. According to the default rule stated, laws enter in force in the sixty day after the day of publication.

The general principle is that the law only provides for the future. And, even if retrospective effect is granted to the law, it shall be presumed that the effects already produced are not affected by the facts that the law intends to regulate. As the majority of laws are not temporary, they remain in force until they are revoked by another law. Paragraph 2 of Article 6 of the Civil Code states that “Revocation may arise from an express declaration, from incompatibility between the new provisions and the preceding rules, or from the circumstance that a new law regulates all matters covered by a preceding law.”

It should be noted that National laws (from PRC) shall not be applied in the MSAR except for those listed in Annex III to the Basic Law, for example:

Customary Law
While laws are the immediate source of law, customary law also plays an important role in the Macau Jurisdiction. Per Article 2 of the Macau Civil Code (Legal value of usage), “Usage not contrary to the principles of good faith are legally admissible when the law so determines”. Nevertheless, customary law, i.e. usages that people consider legally compulsory to follow, over the time has lost its importance in most juridical systems.

Article 3 of the Macau Civil Code, in respect to equity, establishes that

“Courts can only decide in accordance with equity:

a) If there is a legal provision allowing so;

b) If there is an agreement of the parties and the legal relation is not non-negotiable; or

c) If the parties have previously agreed to resort to equity, under the terms applicable to arbitration clauses.”

Case Law
Case law also has a significant role in Macau. However, in contrast to the common law legal system, in which cases are the primary source of law, case law has only a secondary role in the Macau jurisdiction. Moreover, there is no system of binding precedent. While in common law legal systems, including Hong Kong, judicial decisions create new legal norms and the judges are obliged to respect prior decisions in accordance with the stare decisis principle; in the legal system of MSAR, case law serves mainly to interpret the law and only in rare situations cases create new law.

Despite the judicial precedents are not generally binding, they are still quite relevant not only for overall understanding of the law and legal principles, but also because they work as a complement in judges’ reasoning whenever they have to take their decisions. Paragraph 3 of Article 7 of the Macau Civil Code establishes that: “In their decisions, courts shall take into account all cases deserving analogous treatment, in order to obtain uniform interpretation and application of the law.” It is also quite common to see in the lawyers’ arguments quotes from prior precedents, including Portuguese former decisions and decisions by local Courts in Macau.

Case law is available to public for information and research at the Government website of Macau Courts. Access to this database is free of charge. The decisions are available either in Portuguese or Chinese or in both official languages of the Special Region. English and other languages are not used in Macau Courts except in special situations and in which translations are legally required. The website is only available in Portuguese and in Chinese.

Doctrinal Work
The doctrinal work by academics is also influential, especially the Portuguese legal bibliography. It may serve as an instrument to interpret the law when it is not clear. Hence, it is considered a “non-material” source of law.

As for the hierarchy of norms, the “constitution” (the Macau Basic Law), is the norm of the norms followed by the legal rules enacted by the Legislative Assembly, the “parliament” in Macau. Although laws are an immediate source of law, international agreements applicable in Macau shall prevail over ordinary laws. After these ones, and depending on the legal system, may come the judicial decisions, when the law admits the principle of stare decisis. Nevertheless, in Macau, as a rule, judicial decisions serve only to interpret the law. Moreover, as referred above, legal costumes are also a source of law. Doctrine, in the end of the list, is not really a source of law, as it serves merely to help with the interpretation of the law.

7. Legal Education and Professional Organizations

The University of Macau (also referred to as “UM”) is a public university founded in 1991. It substituted the former University of East Asia (first established in 1981). It offers law degrees, as well as masters and PhD programs in law, in Chinese, Portuguese, and English. The University has now a new campus located in Hengqin Island, next to Macau, but in Mainland China territory.

The Macau Institute for European Studies is a private organization established in 1995 that also offers some legal advanced programs, such as the Master of Arts in European Studies.

Graduates in law, that intend to practice law as lawyers and act on behalf of clients before a Court of law must be duly registered at the Macau Lawyers Association (AAM), a public and autonomous entity, which offers trainee programs for lawyers. In Macau, as in Portugal, there is no difference between barristers and solicitors. The Lawyers Association website has a webpage in English.

To find a Lawyer practicing in Macau, the AAM provides a directory link where one can look for lawyers, trainees, and officers.

The Legal and Judicial Training Center of Macau is in charge of the training program for the judges and public prosecutors magistrates. This Center also provides short intensive legal courses for public servants of the MSAR.

One more note to mention that Rui Cunha Foundation is a non-profit organization that supports the Centre for Reflection, Study and Dissemination of Macau Law, where those interested may participate in conferences and seminars related to current issues of concern and relevance to the legal practice. As an independent organic unit of the Rui Cunha Foundation, there is Centro de Reflexão, Estudo e Difusão do Direito de Macau whose main mandate is the coordination of all resources allocated to the investigation of Macau Law within its uniqueness, in order to contribute to the creation, preservation and dissemination of doctrine and jurisprudence of the Special Region.

8. Health System

After the handover to PRC, the public health care system in Macau has been governed under the aforesaid principle “One Country, Two Systems”, with International Health Regulations from the World Health Organization being applicable directly to the Special Region. The Macau Health Bureau provides hospital care and primary healthcare to all citizens, and is in charge of the implementation of all actions necessary to health promotion and disease prevention in the Region.

Decree-Law no. 24/86/M, of March 15th, 1986, under the principle of gratuity, establishes that health services provided by the Government are fully or partially funded by the General Budget of the Special Region. Thus, all Macau residents are entitled to free services at health care centres and at the public hospitals. The public health system is mainly funded by the Macau Government, which means that it provides primary healthcare and hospital services to all legal residents of the Region free of charge (subject to some statutory requirements), also including medication.

Besides the public hospital, named Centro Hospitalar Conde de São Januário (CHCSJ) in Macau Peninsula, there are also several health centres located in different areas across the Region, including the University Hospital of Science and Technology (MUST hospital), located in Taipa. In addition, there is a non-governmental hospital, the Kiang Wu Hospital, subsidized by the government operating in the Special Region, and many private clinics and laboratories across the Region.

9. Useful Links, Portals and Databases

Major open access sources of legal information:

The laws published in the Official Gazette of Macau are, as a rule, published only in Portuguese and Chinese. Exceptionally, it is possible to find in the Official Gazette, English versions of some diplomas, such as the Commercial Code, which has been translated into English (although it is an unofficial translation). The Government webpage referred above has a list in English of all relevant Government departments in Macau. Generally, the Government departments’ webpages are written in Portuguese and Chinese. Some offer a webpage in English or with some information written in English, such are:

Other Open Access Sources

10. Bibliography and Other Sources

The majority of legal publications written by legal professionals is either in Portuguese or in Chinese.

A list of relevant legal books written by Portuguese authors:

There is also the “Legisiuris Macau Law Journal Magazine”(Doctrine, Jurisprudence and Legislation commented), written by legal professionals residing in Macau, that is for sale in Rui CunhaFoundation.

A bibliography of legal literature written in Chinese or Chinese translations from works written by Portuguese authors: [5]

Some authors have published in English. A bibliography of selective basic legal works in English:

[1] See Macau Basic Law, University of Macau (English translation); Macau Basic Law, WIPO (English translation).

[2] This Joint Declaration defined the process by which Macau would return to Chinese sovereignty as a Special Administrative Region.

[3] That have lived in Macau for a continuous period of seven years.

[4] Legislation includes Laws, Decree-Laws (approved/published before the transfer of sovereignty in 1999 and that still remain in force), Administrative Regulations and Chief Executive Orders and Dispatches.

[5] The author would like to thank her colleague and friend, Wong Soi Sam from Macau, who has kindly provided an invaluable cooperation in preparing this portion of the article.