Calvin Tinlop Chui Sio Pui Teng, Lúcia November 1 2022 New legal regime proposed for public capital enterprises in Macau Rato, Ling, Lei & Cortés Advogados | Banking & Financial Services - Macau Calvin Tinlop Chui, Sio Pui Teng, Lúcia Banking & Financial Services IntroductionKey pointsCommentIntroductionFor a long time, no legal regime has specifically governed the operation of public capital enterprises. Currently, the establishment and operation of public capital enterprises are mainly regulated by the Commercial Code of Macau, and since the Commercial Code applies to all types of companies and is not designed for public capital enterprises, the special requirements for such enterprises cannot be comprehensively addressed.To this end, the Macau Special Administrative Region (Macau SAR) has proposed a draft bill for public capital enterprises, which was introduced to the Legislative Assembly in May 2022.Key pointsSumming up the views collected during the public consultation, the community generally recognises the importance and legislative direction of establishing a legal regime for public capital enterprises, as well as the fact that it provides the fundamental framework for the regulation and supervision of public capital enterprises.The key points of the draft bill include the following:A clarification of the definition of "public capital enterprise". There are three types of public capital enterprises:Wholly owned public capital enterprises (empresa de capitais integralmente públicos) – a public capital enterprise in which the Macau SAR or other Macau public entities own all of the participations directly (wholly or jointly).Public capital enterprises with majority participation (empresa de capitais públicos com influência dominante) – a public capital enterprise in which the majority of the participations (but not all) are directly held by the Macau SAR or other Macau public entities, with control over the public capital enterprise.Public capital enterprises without majority participation (empresa de capitais públicos sem influência dominante) – a public capital enterprise in which the participations (but not all of them) are directly held by the Macau SAR or other Macau public entities that do not have the control of the public capital enterprise.The fact that with the necessary adaptations, the provisions may also apply to public capital enterprises established outside Macau.The empowerment of the public asset supervision department in order to also be the representative of the public asset contributor. The public asset contributor will not be liable, in subsidiary or jointly and severally, for the debts of public capital enterprises because of the establishment of the public capital enterprise, participation in the establishment of the public capital enterprise, or acquisition of the participation(s).The establishment of a general meeting, the board of directors and the supervisory board or single supervisor a series of special powers – the tasks of the supervisory board or single supervisor include, for example, establishing an internal regime for the supervision of the public capital enterprise.The implementation of a regime for evaluating the performance of business operations – wholly owned public capital enterprises and public capital enterprises with majority participation must be subjected to a periodic assessment of their operating situations by the public asset supervision department.Other regulations on certain aspects of public capital enterprise supervision, such as introducing provisions related to the disclosure of public capital enterprise information.CommentSince the establishment of the Macau SAR, the number of public capital enterprises and their scale have been increasing, and there has been a necessity for the legislation of the legal regime of public capital enterprise. However, one of the main issues that must be considered when establishing the legal regime of public capital enterprises is ensuring the safety of public capital while maintaining operational efficiency.For further information on this topic please contact Calvin Tinlop Chui or Sio Pui Teng, Lúcia at Rato, Ling, Lei & Cortés Advogados by telephone (+853 2856 2322) or email ([email protected] or [email protected]). The Rato, Ling, Lei & Cortés Advogados website can be accessed at www.lektou.com.