Table 1: CIT tax rates for small and micro enterprises

Capture article







The above tax treatment, implemented nationwide, would grant investors access to the GBA infrastructure and environment even when the investment volume and operations are limited during the startup period.


Understanding intellectual property rights in China

In 2020, China revised four IP-related laws and regulations (namely the Patent Law, Copyright Law, Criminal Law and the provision on the transfer of suspected criminal cases by administrative law enforcement organs); issued six judicial interpretations (covering commercial secrets infringement, application of laws in infringement disputes, and IP-related criminal cases); implemented more than twenty policies, and set two national standards for IP protection (related to IPR on e-commerce platforms and recommended national standards for patent guidance).

Through these continued efforts, China now ranks 14th among 131 economies according to the World Intellectual Property Organisation’s Global Innovation Index 2020. While ranking highly in patent registrations and total exports of creative products, China still needs to structure further reforms in areas like human capital, infrastructure, and institutional construction.


Navigating the protection of intellectual property in the Greater Bay Area

Among the challenges and opportunities of the GBA for foreign investors, the biggest might be navigating multiple municipal and regional jurisdictions. It is quite common for foreign investors to set up a Hong Kong holding company (under Hong Kong laws) for foreign exchange and tax purposes, and a PRC Wholly Foreign-Owned Enterprise (under PRC laws) 100% owned by the Hong Kong holding company for handling operations and the employment of local staff. While setting up entities in different jurisdictions can be a good strategy at the corporate level, it can create challenges for IP protection.

Beyond contractual or corporate matters, IPR territoriality is decisive. Apart from rare exceptions (such as so-called “well-known marks”), the registration of trademarks, patents or copyrights in one jurisdiction grants little to no other rights in other jurisdictions. Therefore, a rights owner’s IP protection strategy across the GBA must be assessed case by case according to the rights owner’s interests and anticipated use.

The table below outlines the main differences among the three jurisdictions within the GBA.

Table 2: Differences between the three jurisdictions

table article





















The GBA represents a privileged business destination for domestic and foreign companies operating in finance, logistics, innovation and technology, and capital-intensive industries. However, the differences in regulations among the three jurisdictions from legal, accounting and tax perspectives add a level of complexity.

In light of this, companies should carefully plan an entry strategy in the GBA, evaluating all the necessary resources and steps, including how to leverage synergies and incentives in the area, how to comply with the local tax requirements, and how to hire the right and qualified personnel, all the while protecting competitive advantage and key IPR. Working with a trusted partner with local expertise will help you better navigate China’s booming market.