The Macao citizen and the visitors go through the island of Hengqin in south China's Guangdong province. (PARKER ZHENG / CHINA DAILY)

The new “closed-loop” arrangement in the Guangdong-Macao In-Depth Cooperation Zone in Hengqin, Zhuhai, has enhanced operational efficiency and saved costs for businesses while creating more convenience for Macao residents, and is playing an active role in promoting the special administrative region’s integration with the Chinese mainland, China Daily learnt during a media tour organized by the Hengqin authorities on Wednesday.

The arrangement, which has been in effect since March 1, designates the border between Hengqin and Macao SAR as the “first line”, and the border between Hengqin and other parts of the Chinese mainland as the “second line”.

The export tax refunds can be processed through online channels, and the processing time has been reduced to five working days, according to the cooperation zone’s tax authority 

Goods entering the zone from the Chinese mainland through the “second line” are now treated as exports, making them eligible for value-added tax (VAT) and consumption tax refunds, with the scope of goods eligible for tax refunds expanded to include items other than those that are production-related.

READ MORE: China's Hengqin lifts tariffs for most imports from Macao

Enterprises in the cooperation zone can now apply for VAT and consumption tax refunds at the point of purchase when importing goods via the “second line”, which allows them to retrieve their expenses more quickly, said Zhu Zhenyu, general manager of Guangyao (Zhuhai Hengqin) Pharmaceuticals Import and Export.

“Cash flow is the lifeblood of any enterprise. Both preferential tax policies under the ‘second line’ and the ‘first line’ will alleviate our financial burdens,” Zhu added.

The export tax refunds can be processed through online channels, and the processing time has been reduced to five working days, according to the cooperation zone’s tax authority. 

“We provide personalized guidance and tracking services, particularly for first-time applicants, in a bid to ensure a smooth process for businesses to enjoy export tax refunds,” said Wang Chengyu, a deputy section chief at the tax authority of the cooperation zone.

Meanwhile, eligible enterprises in the zone importing machinery, equipment, molds, and spare parts for maintenance through the “first line” will enjoy exemptions from import tariffs, value-added tax, and consumption tax.

The Macao citizen and the visitors go through the island of Hengqin in south China's Guangdong province. (PARKER ZHENG / CHINA DAILY)

As of early on March 13, a total of 33 enterprises and institutions had obtained the qualification for tax-exempt imports.

According to the customs, as of March 13, more than 600,000 passages have been made through the Hengqin Port, 280,000 of which have been made via the streamlined inspection

“Enabling firms to apply for tax-free imports of cutting-edge research equipment, the policy is expected to help reduce costs, and is particularly beneficial for startups,” said Li Shilei, director of communication and public affairs of Wisewave, a Hengqin-based company focused on integrated circuit design. 

Under the new tax regulations, goods produced in the cooperation zone that achieve an added value of 30 percent or more and contain imported materials will be exempt from import duties when entering other parts of the mainland. 

In addition to cost savings for high-tech companies that import equipment and reagents from abroad, this tax incentive will create opportunities for the development of the exhibition industry, said Zhu Yun, chairman of Nam Kwong International Convention and Exhibition.

Closer ties and enhanced convenience in the exchanges between Hengqin and Macao can help expand the market for Macao’s exhibition industry, and enable the SAR’s exhibition organizers to leverage more cost-effective resources in Hengqin to lower their overheads.

READ MORE: China adjusts tariff policies for Hengqin cooperation zone

Macao residents are also benefiting from the “closed-loop” arrangement, as they can now enjoy an expanded range of permissible items that can be brought to Hengqin after customs declaration, including vegetables, fruits and cooked meats.  

The new office of the Guangyao (Zhuhai Hengqin) pharmaceuticals Import and Export Company Limited locate at the island of Hengqin in south China's Guangdong province. (PARKER ZHENG / CHINA DAILY)

“The accelerated integration of Hengqin and Macao has fostered a sense of belonging for many SAR residents in Hengqin. This positive sentiment can drive more Macao youth to explore opportunities in the cooperation zone,” Yu Chiu-bun, a Macao resident who now lives in Hengqin, said.

According to the customs, as of March 13, more than 600,000 passages have been made through the Hengqin Port, 280,000 of which have been made via the streamlined inspection. Over 2,174 Macao residents have been able to bring animal and plant products into the cooperation zone. 

Contact the writer at irisli@chinadailyhk.com