Circular on Further Strengthening and Standardizing the Examination, Approval and Regulation of Direct Investment in Real Property by Foreign Investors
关于进一步加强、规范外商直接投资房地产业审批和监管的通知
Possession of the leasehold or property ownership is required before establishing a foreign-invested real property company.
(Issued by the Ministry of Commerce and State Administration of Foreign Exchange on May 23 2007.)
Shang Zi Han [2007] No.50
(商务部、国家外汇管理局于二零零七年五月二十三日发布。)
商资函 [2007] 50号
Departments in charge of commerce and foreign exchange control departments of the provinces, autonomous regions, municipalities directly under the central government, cities with independent development plans and the Xinjiang Construction and Production Corps:
各省、自治区、直辖市、计划单列市及新疆生产建设兵团商务主管部门、外汇管理部门：
With a view to regulating the entry of foreign capital into the real property market and the administration thereof, six departments of the State Council jointly issued the Opinions on Regulating the Entry of Foreign Investment into the Real Property Market and the Administration Thereof (Jian Zhu Fang [2006] No.171, hereinafter referred to as the "Opinions"). In duly implementing the provisions and requirements of the Opinions, the various regions and departments have achieved substantial results. However, certain problems continue to exist in a few regions. Pursuant to laws and regulations on foreign investment and the Opinions, we hereby notify you on matters relating to further strengthening and standardizing the examination, approval, record filing and regulation of foreign investment in real property as follows:
为了规范房地产市场外资准入和管理，国务院六部门联合下发了《关于规范房地产市场外资准入和管理的意见》（建住房[2006]171号，以下称《意见》）。各地、各部门认真执行《意见》的各项规定和要求，取得一定的实效。但少数地区仍存在一些问题。根据外商投资法律法规和《意见》的有关规定，现就进一步加强、规范外商投资房地产审批、备案和监管相关事宜通知如下：
1. The department in charge of commerce of each region shall strictly implement the Opinions and the General Office of the Ministry of Commerce, Circular on Issues Relevant to Thoroughly Implementing the Opinions on Regulating the Entry of Foreign Investment into the Real Property Market and the Administration Thereof (Shang Zi Zi [2006] No.192), strengthen in accordance with the law the examination, approval and regulation of foreign-invested real property enterprises and strictly control foreign investment in high-end real properties.
一、 各地商务主管部门要严格执行《意见》和《商务部办公厅关于贯彻落实〈关于规范房地产市场外资准入和管理的通知〉有关问题的通知》（商资字[2006]192号），依法加强外商投资房地产企业的审批和监管，严格控制外商投资高档房地产。
2. A foreign investor that invests and engages in real property development and dealings shall comply with project company principles.
二、 外商投资从事房地产开发、经营，应遵循项目公司原则
(1) If an application to establish a real property company is to be made, the leasehold, and real property and building ownership shall first be obtained or a preliminary grant/purchase agreement for the leasehold or real property title shall have been entered into with the land administration department or land developer/real property and building owner. If the foregoing requirements are not satisfied, the examination and approval department will not grant its approval.
（一） 申请设立房地产公司，应先取得土地使用权、房地产建筑物所有权，或已与土地管理部门、土地开发商/房地产建筑物所有人签订土地使用权或房产权的预约出让/购买协议。未达到上述要求，审批部门不予批准。
(2) If an established foreign-invested enterprise is to additionally engage in real property development or dealings, or if a foreign-invested real property enterprise is to engage in the development and dealing of a new real property project, it shall carry out the relevant procedures to increase its scope of business or expand the scale of its operations with the examination and approval department in accordance with relevant laws and regulations on foreign investment.
（二） 已设立外商投资企业新增房地产开发或经营业务，以及外商投资房地产企业从事新的房地产项目开发经营，应按照外商投资有关法律法规向审批部门申请办理增加经营范围或扩大经营规模的相关手续。
3. The acquisition of, or investment in, domestic real property enterprises through the round tripping of investment (including by the same de facto controller) shall be strictly controlled. An offshore investor may not evade the examination and approval of foreign investment in real property by way of changing the de facto controller of a domestic real property enterprise. If a foreign exchange control department discovers that a foreign-invested real property enterprise was illegally established by taking measures to intentionally avoid examination and approval, providing false statements, etc., it shall pursue its liability for evading exchange control in respect of its unauthorized outward remittance of capital and the returns thereon.
三、 严格控制以返程投资方式（包括同一实际控制人）并购或投资境内房地产企业。境外投资者不得以变更境内房地产企业实际控制人的方式，规避外商投资房地产审批。外汇管理部门一经发现以采取蓄意规避、虚假陈述等手段违规设立的外商投资房地产企业，将对其擅自汇出资本及附生收益的行为追究其逃骗汇责任。
4. An offshore investor that engages in real property development or dealings in China shall comply with the principal of having a commercial presence by applying in accordance with the law to establish a foreign-invested real property enterprise, and shall engage in relevant business within its approved scope of business. The Chinese and foreign investors to a foreign-invested real property enterprise may not set terms in any manner whatsoever that guarantee fixed returns or fixed returns in a disguised manner to any party.
四、 境外投资者在境内从事房地产开发或经营业务，应当遵守商业存在原则，依法申请设立外商投资房地产企业，按核准的经营范围从事相关业务。外商投资房地产企业的中外投资各方，不得以任何形式订立保证任何一方固定回报或变相固定回报的条款。
5. When a local examination and approval department approves the establishment of a foreign-invested real property enterprise, it shall promptly report the same to the Ministry of Commerce for the record in accordance with the law.
五、 地方审批部门批准设立外商投资房地产企业，应实时依法向商务部备案。
6. The foreign exchange control department or the designated foreign exchange bank shall not carry out procedures for the settlement and sale of foreign exchange on the capital account for a foreign-invested real property enterprise that has not completed record filing procedures with the Ministry of Commerce or has not passed the joint annual inspection of foreign-invested enterprises.
六、 外汇管理部门、外汇指定银行对未完成商务部备案手续或未通过外商投资企业联合年检的外商投资房地产企业，不予办理资本项目结售汇手续。
7. The Ministry of Commerce will investigate, deal with and rectify approvals of foreign-invested real property enterprises in violation of regulations by local examination and approval departments, and the foreign exchange control department shall not carry out foreign exchange registration and other such procedures for foreign-invested real property enterprises established in violation of regulations.
clp reference:4110/07.05.23prc reference:商资函 [2007] 50号promulgated:2007-05-23七、 对地方审批部门违规审批外商投资房地产企业，商务部将予以查处纠正，外汇管理部门对违规设立的外商投资房地产企业不予办理外汇登记等手续。
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