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Decree-Law no. 15/83/M

of 26th February

(Unofficial translation, for reference only)

Finance Companies

Decree-Law no. 35/82/M of 3rd August, in regulating the system of credit and the financial structure of the Territory, made important changes in the organisation and operating rules of the financial system of Macau.

The present Decree-Law, in regulating the business of finance companies, constitutes a further item of a juridical and economic nature intended to complete a legal framework already outlined, and also to make possible and to stimulate the growth and diversification of the local financial market.

The important role which finance companies may play in the economic development of Macau is recognized, given their capacity for granting medium term credit, and for boosting investment, simultaneously stimulating the investment market and channeling excess liquidity existing in monetary credit institutions into productive ends.

Having heard the opinion of the Consultative Council:

Making use of the power conferred by Article 13 (1) of the Organic Statute of Macau, promulgated by Constitutional Law no. 1/76 of 17th February, the Governor decrees with force of law in the Territory the following:


Introductory Provisions

Article 1


Finance companies are non-monetary credit institutions incorporated in the Territory, having as their exclusive objects the making of financial transactions and the supply of linked services, defined under the terms of this law.

Article 2


The incorporation in tile Territory of finance companies depends upon authorisation of the Governor, to be given by decree, after the written opinion of the IEM.

Article 3


Finance companies shall be incorporated as companies limited by shares and their respective shares shall be registered shares.

Article 4

(Branch Offices)

1. Finance companies shall not open branch offices in the Territory of Macau.

2. Finance companies shall only open branches or agencies outside the Territory with prior authorisation granted by executive ruling of the Governor published in the Official Gazette, after the written opinion of the IEM.

Article 5

(Share Capital)

1. Finance companies shall not be incorporated or thereafter continue with a share capital less than 100 million Patacas.

2. Finance companies shall only be incorporated after the subscribers have proved that a fraction of the share capital not being less than 50% of the minimum share capital set out in the preceding paragraph has been fully paid up, and that at least 50% of the former sum has been deposited with the IEM, and which may be withdrawn after the finance company has commenced carrying on business.

3. The period within which the remaining 50% of share capital must be paid up shall be fixed by the decree granting authorisation and referred to in Article 2.

4. The Governor may, in granting authorisation, establish a sum of share capital less than that referred to in paragraph (1), and also conditions for paying up the same different from those referred to in paragraph (2), provided that at least 75% of the share capital is subscribed by financial institutions authorised to carry on business in the Territory.

Article 6

(Authorisation Procedure)

1. Entities desirous of incorporating a finance company must either themselves or through a person with powers to act for such purposes submit to the IEM the respective application for authorisation.

2. The application must always be accompanied by the following information:

a. a memorandum which sets out clearly the general lines of activity and the principal transactions to be undertaken in the Territory, and which demonstrates the feasibility of the institution in question and the contribution which its activity will make to the objects of the economic and financial policies pursued by the competent bodies of the Territory;

b. draft Memorandum and Articles of Association, prepared in accord with legal provisions in force;

c. details of the founder shareholders and their respective holdings in the share capital;

d. any other information which the IEM may consider, necessary for the proper elaboration of the authorisation procedure.

3. The application and accompanying information must be in the Portuguese language, but originals will be accepted in the language of the principal shareholders, provided that they are accompanied by their respective translation into Portuguese, duly authenticated under the terms of the law.

Article 7

(Lapse of authorisation)

1. Authorisation for the creation of a finance company shall be deemed to have no effect if the same is not incorporated or its business not commenced within the periods of 120 days and 180 days respectively from the date of publication of the decree of authorisation.

2. The Governor may by ruling published in the Official Gazette extend the periods referred to in the preceding paragraph up to a limit of one year, calculated in the manner there set out, taking into account reasons duly justified and after the written opinion of the IEM.

Article 8

(Alteration of Memorandum and Articles of Association)

1. Finance companies shall submit for the prior approval of the Governor all alterations which they seek to introduce in their Memorandum and Articles of Association, for example those which cover changes of name, head office or share capital.

2. The Governor may authorise such alterations by ruling published in the Official Gazette and after the written opinion of the IEM.


Registration and Taxes

Article 9

(Information for registration)

1. Without prejudice to the applicable provisions relating to the commercial and fiscal registers, finance companies shall be subject to a special registration with the IEM without which they shall be unable to commence carrying on business.

2. The register shall include the following information:

a. the name of the company;

b. the date of its incorporation;

c. the situation of its head office;

d. the authorised share capital;

e. notarial photocopy of its Memorandum and Articles of Association and any alterations;

f. up to date list of shareholders and respective holdings in share capital;

g. the names of the administrators and any other agents with management powers, the members of the supervisory board and chairman and assistants of general meetings;

h. alterations which have taken place in the information referred to in the previous subparagraphs.

Article 10

(Registration applications)

1. Applications for registration must be made within 30 days from the date of incorporation of the finance company.

2. Applications for the due noting of alterations of the register must be made within 30 days from the date on which such alterations occur.

Article 11

(Registration fees)

1. For the registration of finance companies a fee of 5 00 Patacas shall be payable, and for the noting of alterations a fee of 100 Patacas.

2. These fees shall be paid by means of a standard form document issued by the IEM.

Article 12

(Supervision tax)

1. Finance companies shall be liable to an annual supervision tax calculated upon their paid up share capital and which shall not exceed 0.3% nor 150,000 Patacas in absolute terms.

2. The percentage in respect of each year which shall be taken upon the paid up share capital as at 31st December in the same year, shall be established by the Governor, after the written opinion of the IEM, by decree to be published in the Official Gazette by 15th January following, and its collection and payment shall be obtained by the IEM by the end of that month, and it shall constitute income of that institution.

3. In the first year of their business, the tax to be paid by finance companies shall be in proportion to the number of months in which that business has been carried on.

4. The Governor may, by decree and after the written opinion of the IEM, alter the percentage and value of the supervision tax referred to in paragraph (1) of this article.


Transactions Applying Assets


Credit Transactions

Article 13


1. Finance companies may only grant medium and long term credit.

2. In transactions for the granting of credit it shall always be compulsory to fix the respective terms of repayment.

Article 14


1. Finance companies shall be prohibited from granting credit to any other credit institutions, save by way of guarantee on a bill of exchange, contract of guarantee or bank guarantee.

2. The granting of credit shall not be effected on current account.

Article 15

(Limits for granting of credit)

Finance companies shall be prohibited from granting credit, including under the form of contract of guarantee, guarantee on a bill of exchange or bank guarantee, in the following cases and in excess of the following limits, calculated on the basis of paid up share capital and reserve funds less any accumulated losses:

a) when backed by a pledge of its own shares in an amount greater than 10%;

b) to persons comprised in its own directors, managers, members of other company bodies, their spouses not being judicially separated as to person and property, and relations down to the second degree inclusive, in a sum exceeding 15%.


Transactions in Securities and Capital Investments

Article 16

(Underwriting issues of securities)

1. Finance companies may underwrite the issue of any securities provided that the same are intended for public subscription.

2. In the case of securities the acquisition of which is prohibited to them under the provisions of the following article, or restricted under the provisions of article 18, the investments subscribed for must be transferred, in whole or in that part exceeding the limit, as the case may be, within the period of 18 months from the date of each subscription.

Article 17

(Acquisition of own shares of those of other credit institutions)

1. Finance companies shall be prohibited from acquiring their own shares or those of any credit institutions, and also prohibited from acquiring bonds convertible into shares or which give the opportunity to subscribe for shares issued by the said entities.

2. The provisions of the preceding paragraph shall not apply to:

a. the acquisition of shares in or part of the capital of credit institutions not incorporated in the Territory;

b. the acquisition of shares, by any legal means of acquisition including judicial auction, by way of reimbursement of money owing to them.

3. The shares referred to in paragraph (2) (b) must be transferred within the period of 18 months from the date of the respective acquisition, which period may be extended by the Governor, after hearing the opinion of the IEM.

Article 18

(Financial investments)

1. Finance companies may only invest in the capital of a given company, or acquire bonds issued by any company up to an amount of 50% of the latter company's capital.

2. The financial investments of finance companies shall not exceed in their total six times their respective paid up share capital and reserves less any accumulated losses.

3. If the case is one of reimbursement of money owing to it, by any legal means including judicial auction, the finance company must proceed to transfer the securities so acquired as quickly as possible and always within a period which shall not exceed 24 months from the date of acquisition, in respect of that part which exceeds the limit fixed in paragraphs (1) and (2).

4. The limits fixed by paragraphs (1) and (2) may be exceeded with prior authorisation given by ruling of the Governor, after a proposal by the interested institution and a written opinion of the IEM, taking account of the nature of the company in whose capital the finance company seeks to invest, the object of the investment, and also the use to be made of the capital produced by the securities issued by the companies.

5. For the purposes of the preceding paragraph, the finance company shall submit to the IEM a proper application addressed to the Governor and accompanied by an explanatory memorandum setting out the reasons for the claim.

6. The provisions of paragraph (1) shall not apply to the acquisition of certificates of deposit or of bonds issued or guaranteed by the Territory.

Article 19

(Companies in which finance companies hold investments)

Without prejudice to the application of other penalties provided for by law, the acquisition of shares in or bonds of any finance company by any companies or businesses in which the finance company holds investments shall be void.


Other Transactions

Article 20

(Other transactions applying assets, and services)

Finance companies may also undertake the following transactions applying their assets, and may supply the following services:

a) to give guarantees which assure the fulfilment of obligations contracted by other entities;

b) to promote, for the benefit of any businesses whether or not having their head offices in the Territory, the obtaining of external medium or long term credit;

c) to promote the launching of new businesses being of interest to the economic-social development of the Territory;

d) to promote the economic and financial reconstruction of businesses, with a view to their proper scaling, and to a balanced relationship between their own capital and borrowed funds;

e) to carry out technico-economic feasibility studies of businesses or new investment projects, and also of the conditions and methods for their respective financing;

f) to carry out studies or projects aimed at the reorganising concentrating or any other method of rationalising business activity, including market promotion, improvement of production techniques, and introduction of new technology;

g) the economic or financial management of investment funds, portofolios of shares securities, whether on its own account or on behalf of third parties;

h) the supply of other services of a financial nature subject to the prior authorisation of the Governor, after the written opinion of the IEM.


Transactions incurring liabilities

Article 21

(Transactions incurring liabilities)

Finance companies may only carry out the following transactions incurring liabilities:

a) to issue bonds subject to the authorisation of the Governor after hearing the opinion of the IEM;

b) to obtain medium and long term credit from any credit institutions;

c) to obtain short term credit by way of current account from credit institutions authorised to carry on business in the Territory, up to a maximum limit of 50% of its paid up share capital and reserve funds less any accumulated losses;

d) to obtain guarantees necessary for the contracting of external credit;

e) other transactions incurring liabilities, excluding all forms of deposits, which, given the development of the financial market, may be considered of interest, subject to the prior authorisation of the Governor after the written opinion of the IEM.



Article 22

(Relationship between liabilities and own capital)

1. The total amount of direct liabilities of finance companies shall not exceed twenty times the amount of their own paid up capital.

2. The IEM may by notice, establish coefficients between the liabilities of finance companies flowing from the acceptance of bills of exchange and guarantees given and the amount of their own paid up capital.

3. For the purposes of the provisions of this article, own paid up capital shall be deemed to include, apart from paid up share capital plus reserve funds set aside less any accumulated losses, an amount corresponding to one half of the product of the issue of bonds convertible into shares and whose conversion must be effected within a period of not less than 2 years.

Article 23

(Cover for liabilities)

The IEM may regulate, by notice, the cover for liabilities undertaken by finance companies, taking account of the characteristics and nature of the transactions authorised.

Article 24

(Valuation criteria)

The IEM shall by notice establish the criteria to be applied by finance companies in the valuation of their respective assets and liabilities.


Reserves and Provisions

Article 25

(Legal reserve)

Finance companies must set aside a legal reserve fund, having as its basis the compulsory transfer of 20% of the net profits of each year of trading, until the said fund equals one half of the share capital, after which the amount to be transferred to this fund shall be a fraction of not less than 5% of net profits, until the fund equals the amount of the share capital.

Article 26

(Restriction on dividends)

Finance companies shall not distribute among their shareholders by way of dividend or upon any other basis amounts which would in any way reduce the amount of the respective share capital below the minimum share capital.

Article 27


1. Apart from making provisions for doubtful debts and for other depreciation of assets, finance companies shall create provisions which they prudently consider necessary to meet the risks of depreciation or losses to which defined classes of securities or transactions are especially subject.

2. For the purposes of the preceding paragraph, the IEM may, by notice, establish general or specific criteria relating to the creation of provisions.


Accounts and Balance Sheets

Article 28

(Accounting records and Information of an accounting nature)

The provisions of Section IX Chapter IV, of Part II of Decree-Law no. 35/82/M of 3rd August* shall apply to finance companies with the necessary modifications to be laid down by the IEM by notice.


Final Provisions

Article 29

(Applicable law)

1. Finance companies shall be governed by the present law and by the applicable provisions of Decree-Law no. 35/82/M of 3rd August, and the respective authorisation decrees.

2. Any doubts arising from and any omissions which may appear in the application of the present law shall be resolved by decree of the Governor after the written opinion of the IEM.

Signed on 24th February 1983.

This law is hereby published.

The Governor Vasco de Almeida e Costa.

*(NOTE.,Section IX is set out in the Appendix)


Decree-Law no. 15/83/M

(Decree-Law no. 35/82/M)

of 3rd August







Article 166

(Compulsory Publications)

1. Development banks shall publish in the Official Gazette and in two of the newspaper most widely read to the Territory, one in the Portuguese language and the other in the Chinese language, within 30 days from the day on which the accounts are approved, the respective

balance sheets, profit and loss account and inventories of shares, bonds, quotas and financial investments.

2. The said information shall be accompanied by reports of the board of directors and the opinion of the supervisory committee of the bank.

3. Without prejudice to the provisions of paragraph (1), development banks shall publish in the Official Gazette within 30 days from the closing date of the relevant quarter, financial statements from the General Ledger.

4. Development banks having branch offices overseas must additionally publish consolidated balance sheets and profit and loss accounts.

5. Breaches of the provisions of the preceding paragraphs shall be punished with a fine of from 50 thousand to 200 thousand Patacas.

Article 167

(Forwarding of Details)

1. Development banks shall be obliged to forward to the IEM the following information:

a) Monthly analytical situation, accompanied by the development of deposits, and in respect of the month of December, the analytical situation set out before and after the closing of the accounts;

b) Balance sheets and profit and loss account, accompanied by the reports of the board of directors and the opinion of the supervisory committee;

c) Quarterly financial statements, and inventories of shares, bonds, quotas and financial investments;

d) Table showing the source and application of funds;

e) Copy of the minutes of the general meeting which approves the year's accounts, insofar as they relate to the discussion, approval and application of results, accompanied by a list of shareholders present.

2. The information referred to in sub-paragraph a) of paragraph (1) shall be despatched by the last day of the month following that to which they relate, and the remaining information immediately after the closing of the year's accounts.

3. Apart from the information referred to in paragraph (1), development banks shall supply the IEM with other data which the latter may request within the periods laid down, with a view to the preparation of monetary, financial and foreign exchange statistics.

4. Breaches of the provisions of paragraph (2) and (3) shall be punished with a fine of from 20 thousand to 100 thousand Patacas.

Article 168


The IEM may by notice establish the criteria to be adopted by development banks in the organisation of their annual balance sheets, and in the valuation of their various property items, after taking the opinion of the Directorate of the Revenue Services.

Article 169


Balance sheets, financial statements, profit and loss accounts, analytical situations and other data which may be requested must follow the forms drawn up by the IEM.

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