On 8 of April, entering into force the following day, the new Financial Leasing Companies Regime was published in the Macau Official Gazette, revoking the existing and obsolete law 51/93/M dated 20 September 1993.
Relevant changes were introduced by Law 6/2019, establishing a specific regime for the licensing and incorporation of Financial Leasing Companies as well as providing for the exclusive business purposes of such financial companies.
While previous legislation was limited and restricted, applying the general financial system act to the financial leasing companies, the new Law foresees specific legal requirements for these companies providing for the mandatory prior authorization and license, to be granted by Macau Chief Executive, upon opinion from Macau Monetary Authority (“AMCM”).
Among the most relevant changes, Law 6/2019 provides that a financial leasing company may be incorporated either as a public company by shares or a company incorporated by quotas, establishing, notwithstanding, a minimum share capital of 10 million MOP to be paid up at the moment of its incorporation.
The new Macau Law also provides for the possibility of incorporating branches, in or outside the Macau SAR, with financial leasing purposes, whose capital shall be entirely held by banks or financial leasing companies authorized to operate in Macau, for the specific purpose of holding and managing a specific project of financial leasing.
The purposes of these entities is exclusively limited to financial leasing services which includes the sale and purchase of the leased asset, its management, exchange operations, including interests and currency swaps whenever required for the purposes of its main business. It is forbidden to these newly regulated financial institutions to receive deposits or other reimbursable funds from the public.
Likewise credit institutions or insurance companies, financial leasing companies are subject to special registration with AMCM, which must be completed within 3 months from the date of incorporation of the company and includes, besides any other information that may be required by the Regulator, the name of the company, incorporation date and date of beginning of operations, headquarters’ address, share capital, qualified shareholders and respective shareholdings, members of corporate bodies, such as board of directors, supervisory board, general meeting board as well as the identification of any representative or attorney with managing powers and, finally, the audit company.
Any amendments made to the information under the special registration is subject to mandatory update with AMCM within one month.
It is also provided that prior authorization from the Regulator is required in cases involving qualified shareholdings, established at 10% of the Company’s share capital or voting rights, as well as whenever the Company intends to amend or change its articles of association.
Law 6/2019 foresees that at least one member of the board of directors of the company must have regular residence in Macau and be granted with enough powers to effectively manage the Company.
Herein you find a general overview provided by the new Law, which comes with great effect and due application for the Macau financial system, granting more certainty and legal assurance of all procedures when facing the incorporation or operation of financial leasing companies.
We are certain that this new legal regime will be welcomed and will help Macau financial and credit institutions, providing tools to banking and finance legal advisors to better assist their clients, and stimulating the financial leasing market in Macau.