Premium Lawyers grow on Greater Bay Area

MdME lawyers and Rato, Ling, Lei & Cortés Advogados e Notários opened offices in Hong Kong and mainland China. The goal is to continue the policy of expansion in the Continent.

The development of economic and trade links between Guangdong, Hong Kong and Macau and the continued growth of investments in Portuguese-speaking countries by companies from mainland China and Hong Kong have led several of Macau's law firms to explore new opportunities of development.

MdMe opened in Hong Kong in October, and plans to open another office on Mountain Island next year. If the plan is implemented, the company will be the first law firm from Macau to operate independently in the three regions of the Greater Bay Area simultaneously. Gonçalo Mendes da Maia, from MdME, explains to Plataforma that, despite the "very high" costs the creation of a Hong Kong office represent, it is a "valuable" business experience.

"Right now we have offices in Macau and Hong Kong, and when we open up in Hengqin, next year, we will be the first firm to be active independently in the three Greater Bay Area regions. One of the reasons for this is that we have noticed over the years that Chinese public companies are investing through instruments and financial institutions in Hong Kong. Therefore, it is very important to have a physical presence in Hong Kong and to be considered a reference firm for investments of Chinese companies in Portuguese speaking countries," Mendes da Maia said.

But there is another even more important factor for the lawyer: it helps shorten the distance between the company and clients. "Another medium and long-term objective is to take advantage of the opportunities that the Greater Bay Area has created... Of course, we are still at an early stage to know how the three areas will connect and how investors can benefit from that," he highlighted.

MdME and partner Morais Leitão Legal Circle (ML) were involved in the cases of Chinese companies buying shares of Portuguese companies, as in the case of EDP by China Three Gorges and Fidelidade by Fosun.

In recent years, several Chinese companies have shown an interest in investing in companies from Portuguese-speaking countries, an opportunity now extended to Hong Kong entrepreneurs.

"According to our experience, several Hong Kong investors are also looking for investments in the financial sector, such as private equity funds, and even the creation of venture capital funds and financial institutions in Portugal, using the country as a center for investment in Portuguese-speaking countries or as a way of investing indirectly in these countries."

Gonçalo Mendes da Maia also stressed the fact that Hong Kong also acts as an intermediary between Chinese companies and Portuguese-speaking countries, taking in consideration the investment channels.

Towards the Continent

Rato, Ling, Lei & Cortés Advogados e Notários pioneered the expansion of law firms in mainland China. In partnership with Beijing's Zhong Yin and Hong Kong's Fongs Lawyers, the local law firm set up a joint law firm on Mountain Island, in 2016, ZLF.

Pedro Cortés - from Rato, Ling, Lei & Cortés - told Plataforma that there is interest that more of Macau's law firms look for business opportunities in Ilha da Montanha.

ZLF (Hengqin) mainly deals with legal services related to real estate, intellectual property rights and finance, helping customers from Macau to invest in the area. Pedro Cortés describes the joint project as a "challenge," since the various partners have different origins and clients. The lawyer emphasizes that the activity on Mountain Island "exceeded expectations." "It was a way of exploring new directions. The creation of the Legal Services Center for Sino-Latin American Companies, which ZLF was one of the founders of, was decisive," Cortés said.

The center (, officially opened in November, 2017, provides legal services to 24 countries and regions in Chinese, English, Spanish and Portuguese. It is made up of 114 law firms. ZLF (Hengqin) is responsible for services in China.

"We hope to start new projects with other partners in other regions such as Hong Kong, East Timor and Brazil, after opening our Rato, Ling, Lei & Cortés office last year in Portugal. Regarding China, we are considering opening offices in other locations such as Shenzhen or Shanghai," he said.

The Ministry of Justice of Shanghai announced in October of this year "Measures of implementation of pilot partnerships between Hong Kong and Macau law firms with firms from mainland China." The regulation entered into force on December 1 of this year. Shanghai becomes the second region in the Mainland, after Guangdong, to launch partnerships with Hong Kong and Macau law firms. According to the document, the minimum joint capital invested is five million yuan, and the proportion of total capital invested by Hong Kong companies or Macau can range from 30 to 49 percent - the majority of capital always has to belong to the Continent. The total number of lawyers appointed by each party shall not be less than 10, and the person responsible shall be one of the company's lawyers from mainland China. Pedro Cortés is happy with the changes. Gonçalo Mendes da Maia, from MdME, says he prefers "to wait and see."

"We have a long and strong relationship with a number of Chinese firms, and by choosing to develop a partnership with one of these particular firms, we are running the risk of undermining all of our business with the rest, aren't we? So I do not think it would be a very smart choice," he explained. Gonçalo Mendes da Maia expects MdME to become an intermediary for the Greater Bay Area.

"Other firms in Macau have joint ventures rather than independent offices in Hong Kong or Hengqin, so we feel we have a competitive advantage(...). We hope to serve medium-sized enterprises, entrepreneurs, architectural firms, construction companies, among others, instead of large public companies."

New phase

Within the Government Action for 2019, the Government promised to continue to promote the development of financial activities with its own characteristics. The exemption from the supplementary income tax on income from the investment in bonds of Mainland Chinese authorities and state-owned enterprises traded in Macau, as well as exemption from stamp duty on the issuance and acquisition of these bonds are some of the measures envisaged. The Executive also hopes to complete the review of the "Legal System of the Financial System" and that the changes take effect next year.

Lawyers Gonçalo Mendes da Maia and Pedro Cortés believe that the changes will boost the market of financial technology and securities.

The Government also said that it expects large leasing companies to establish themselves in the region, and that next year the review of the "Interest Subsidized Scheme on Bank Loans to Enterprises" will be finalized, attracting more companies from this sector to the region.

Gonçalo Mendes da Maia believes that Macau will face some challenges, mainly due to the proximity to Hong Kong, which has a "highly developed" financial market. In addition to benefits granted by the Government, the lawyer says that in order to achieve the goal of attracting investment, everything will depend on the application process for the issue of securities, as well as the commercial conditions of the banks themselves. "The direction taken by the Government is also very important. If the central government offers incentives and encourages Chinese companies to use Macau as a platform for such financial activities, the attractive factor of Macau will be stronger," Gonçalo Mendes da Maia believes.

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