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China Eases Access of Foreign Capital in Property Market

With the approval of the State Council, six ministries and commissions decided to make adjustments to some of the policies concerning foreign-funded real estate enterprises and purchase of property by foreign entities and individuals in the Opinions on Regulating the Access and Administration of Foreign Investment in the Property Market (Jian Zhu Fang No. 171 [2006]).

1. The proportion of registered capital to total amount of investment of foreign-funded real estate enterprises shall be governed by the Provisional Regulations of the State Administration for Industry and Commerce for the Proportion of Registered Capital to Total Amount of Investment of Joint Ventures Using Chinese and Foreign Investment (Gong Shang Qi Zi No. 38 [1987]).

2. The requirement for foreign-funded real estate enterprises to make full contribution of registered capital before borrowing any loans shall be abolished.

3. Branches and representative offices established by overseas entities within China (other than enterprises approved to engage in real estate business) as well as individuals from outside the mainland working or studying in China may purchase commercial properties needed for their own use. In cities where the home purchase restriction policy is in force, property purchase by overseas individuals must conform with the local policy.

4. The Ministry of Housing and Urban-Rural Development, Ministry of Commerce, National Development and Reform Commission, People's Bank of China, State Administration for Industry and Commerce, State Administration of Foreign Exchange and other departments concerned shall further simplify procedures, improve working efficiency, and optimise and improve the administration of foreign investment in real estate. From the date of issuance of this document, foreign-funded real estate enterprises may go directly to their banks to complete foreign exchange registration formalities for direct investments in accordance with the regulations for foreign exchange administration.

The Opinions on Regulating the Access and Administration of Foreign Investment in the Property Market (Jian Zhu Fang No. 171 [2006]) will continue to be in force except for the above-mentioned amendments.

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