Goods for export must qualify as 'made in Hong Kong' - even though the company may not necessarily be based in Hong Kong. To qualify, goods must be 'substantially transformed'. That is, 30 per cent of value must be added in Hong Kong, including development and design costs.
For service providers, the company must be incorporated in Hong Kong, have been in business in Hong Kong for at least three years, be liable for Hong Kong profits tax and employ half its staff locally.
To claim zero tariffs, Hong Kong-origin goods exported to the mainland must be supported by a Certificate of Hong Kong Origin - Cepa, that the Trade and Industry Department or one of five government-approved certification groups can issue.
Under the outward processing arrangement, manufacturers can continue to subcontract outside Hong Kong for minor finishing processes of goods intended for export to the mainland. After outward processing, the finished goods must be returned to Hong Kong before applying for a Certificate of Origin - Cepa.
New investors in the local manufacturing industry can enjoy zero tariffs under Cepa provided their products qualify and they are able to meet the agreed rules of origin.
