Issues Concerning Proper Handling of the Administration of Qualifications of Foreign-invested Construction Enterprises Circular

(Issued by the Ministry of Construction and Ministry of Commerce on September 6 2004.)

Jian Shi [2004] No.159

All construction general offices at the level of province and autonomous region, construction commissions at the level of municipality directly under the central government, construction administration bureaux in Shandong and Jiangsu provinces, construction divisions in the relevant departments of the State Council, the Construction Bureau of the Xinjiang Production and Construction Corps, the Engineering Bureau of the General Barracks Department, and the departments in charge of commerce in each province, autonomous region, municipality directly under the central government and municipality with independent development plans:

In order to further improve the proper handling of the administration of qualifications of foreign enterprises establishing foreign-invested construction enterprises in China, we hereby notify regarding the relevant issues as follows:

1. Continuing to properly handle the establishment of construction enterprises, qualification applications and related work in China by foreign enterprises

(1) To enable foreign enterprises that have obtained a Foreign-invested Enterprise Approval Certificate in China but have not yet obtained a Construction Enterprise Qualification Certificate to smoothly dovetail existing project contracting activities with the implementation of new provisions, before July 1 2005, relevant foreign enterprises may have the Ministry of Construction handle contracting certification for their individual contracted projects after preliminary examination and approval by a provincial-level administrative department in charge of construction on the basis of their executed contracts for contracted projects and Foreign Enterprise Project Contracting Qualification Certificate. After July 1 2005, foreign enterprises that have not obtained a Construction Enterprise Qualification Certificate may not, without exception, engage in project contracting activities.

All levels of administrative departments in charge of construction and relevant departments shall make the best use of time to carry out examination and approval work for the establishment of foreign-invested construction enterprises and their qualifications.

(2) Foreign-invested enterprises that have already obtained a Construction Enterprise Qualification Certificate may, before July 1 2005, contract for projects in China on the strength of their Construction Enterprise Qualification Certificate or Foreign Enterprise Project Contracting Qualification Certificate. The project contracting performance of such enterprises may be deemed to be performance for upgrading the enterprise qualifications and at the time of the annual qualification inspection.

2. Handling of several problems in the process of evaluating qualifications of foreign-invested construction enterprises

In order to encourage large international project contracting companies to establish foreign-invested construction enterprises in China, when evaluating the qualifications of newly established foreign-invested construction enterprises that do not meet the qualification standard requirements in terms of performance and personnel, they may be handled in accordance with the following procedures:

(1) The performance of contracted projects completed by foreign investors outside China may be deemed to be performance when a newly established enterprise is applying for qualifications in China. When declaring their qualifications, foreign investors must present materials evidencing the relevant performance for examination and confirmation by the qualifications administration departments in line with the construction enterprise qualification standards.

(2) Foreign-invested construction enterprises may employ service providers from outside China as technical and economic management personnel for their enterprise projects. Service providers from outside China shall meet the qualification requirements for technical positions stipulated in the equivalent construction enterprise qualification standards.

The qualifications for technical positions held by foreign service providers shall, according to the Ministry of Construction, Relevant Administration of Qualifications in the Administration of Foreign-invested Construction Enterprises Provisions Implementing Procedures (Jian Shi [2003] No.73), be examined and verified by the qualification administration departments at the time of examination and verification of the qualifications of the construction enterprise on the basis of the foreign service provider's academic qualifications and work experience.

(3) Foreign-invested construction enterprises may employ foreign service providers as project managers of their enterprises. Foreign service providers declared as the project manager of an enterprise shall, according to the construction enterprise qualification standards and the Ministry of Construction, Relevant Administration of Qualifications in the Administration of Foreign-invested Construction Enterprises Provisions Implementing Procedures (Jian Shi [2003] No.73), be examined and verified by the qualification administration departments at the time of the evaluation of the qualifications of the construction enterprise on the basis of their experience in managing project construction work.

No limitations will be imposed on the number of foreign service providers that foreign-invested construction enterprises employ as their enterprise project manager.

All administrative departments in charge of construction at the level of province, autonomous region and municipality directly under the central government are requested to properly handle the work of administering the qualifications of foreign-invested construction enterprises in the spirit of this Circular. If any problems arise in such work, please promptly inform the Department of Construction Market Administration of the Ministry of Construction and the Department of Foreign Investment Administration of the Ministry of Commerce.

Translated by A. Allen & Associates Ltd