ANNOUNCEMENT 22 Nov 2010In November 2010, the government of China announced changed rules for foreign investors.
NUMBER OF INTERVENTIONS
On 22 November 2010, the Chinese Ministry of Commerce announced to further strengthen regulations on approval and filing of foreign investment in real property companies. (Notice on Strengthening Approval and Filing Administration of Foreign Investment in the Real Property Sector (Shang Ban Zi Han 2010, NO.1542)
In accordance with this Notice, some detailed provisions shall be applied to administration on foreign investment in real property companies, listed as follows:
·Land-use related documents will be strictly reviewed by MOFCOM offices at provincial level, such as land-use contracts, land-use certificates and relevant documents;
·MOFCOM offices at provincial level shall jointly with foreign exchanges authority and land-building authorities strengthen supervision on cross border investment and financing activities in the field of real property market;
·Real property companies established by foreign investment shall not make any profit through purchasing and sale of domestic existing real property;
·Investment companies in the field of real property development and operation will not be approved;
·Round-trip investments will be strictly regulated to establish domestic real property companies;
·Strengthening administration on M&A. Equity investment to establish or capital increase of real property companies.
Together with the Notice jointly promulgated by the Ministry of Housing and Urban-Rural Development and the State Administration of Foreign Exchange on restricting housing purchasing by overseas organizations and individuals.