Real Estate

Approval process for foreign-invested construction project service enterprises

On 22 January 2007, the Ministry of Construction and the Ministry of Commerce jointly issued the Regulations for the Administration of Construction Project Service Enterprises with Foreign Investment 外商投資建設工程服務企業管理規定. Effective 26 March 2007, the Regulations outline the approval process for construction project service enterprises with foreign investment and set out the permissible types of business for these enterprises.

Form and permitted business
Construction project service enterprises can be formed as Sinoforeign equity joint ventures, Sinoforeign cooperative joint ventures or wholly foreign-invested enterprises. Provided that the relevant requirements are satisfied, a construction project service enterprise with foreign investment may supply the following services:

project management;

project tender agency;

project cost consulting.

The foreign investor in such enterprise must be an enterprise, economic organisation or registered professional technician performing the same types of service in its home jurisdiction.

Establishment
The Regulations set out the process for applying for the establishment of a construction project service enterprise with foreign investment. The establishment of such an enterprise involves a multi-step approval process. First application must be made to the provincial level commerce authority. In reviewing the application, the commerce authority will solicit the opinion of the provincial level construction administration. The application documents shall include, amongst other items, the enterprise’s joint venture contract (if any), articles of association, documentation on the senior management of the enterprise, the previous three years’ balance sheets and profit and loss statements as prepared by a registered accountant, a certificate of creditworthiness and a certificate of incorporation of the investor(s).

If approval is granted, the investor will be issued an approval certificate; otherwise, it will receive a written explanation for the rejection of the application. Upon obtaining the approval certificate, the investor shall register the enterprise with the administration for industry and commerce and receive its business license.

Qualifications
After acquiring the business license, the investor should submit an application for qualification as a construction project service enterprise with foreign investment to the relevant construction administration. If the investor is applying for recognition as a Grade A enterprise, it must apply to the Ministry of Construction. For qualification as Grade B or below, it must apply to the provincial-level construction authority.

The application documents should include, amongst other things, the FIE approval certificate, the business license and other information as required for qualifying for the type of construction project service to be provided by the enterprise.

 

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