Guidelines for Investment in Construction Industry by Foreigner

Foreign-invested construction enterprise is defined as:  According to Chinese laws and regulations, those in the PRC, foreign invested construction enterprises, sino-foreign joint venture construction enterprises as well as foreign cooperative construction enterprises.

A.   Establishment of foreign-invested construction enterprises, in addition to comply with the relevant conditions of laws and regulations, it must meet the following conditions as well:-

  • 1.    For the establishment of foreign-invested construction enterprises, investors must have at least 3 years of experience that is relevant to building and or operations performance.
  • 2.    The responsible person who is responsible for corporate finance, operations managers, engineers and technicians qualifies to do so and its qualification documents.
  • 3.    For joint venture construction enterprises, sino-foreign cooperative construction enterprises, the total contribution of the China party shall not be less than 25% of the registered capital.

B.   Establishment of Foreign-invested Construction Enterprises approval authority:-

Foreign investors in the PRC establish foreign-invested construction enterprises which engaged in construction activities shall take, foreign trade and economic cooperation administration department, to issue a certificate of approval from foreign-invested enterprises in the State Administration for Industry and Commerce, or its authorized local administration for industry and registration, and shall obtain the issuance of  a qualificaiton certificate from the construction administrative department.

C.   Foreign construction enterprises that are allowed in their respective qualifications grading, to do that within the scope of works:

  • 1. All funds are sourced by foreign investments, foreign grants, foreigner investments and grants of construction projects ;
  • 2. All funds are sourced by international financial institutions and through which, under the terms of the loan granted for the international tender for construction projects ;
  • 3. It is equal to or more than 50% of the foreign capital and the foreign joint construction projects ; and for less than 50% of foreign capital but without technical difficulties, it can implement independently by the China construction enterprises, the provincial, autonomous regional and municipal people's government that approves the construction, the administration department for the sino-foreign joint construction projects ;
  • 4. Investment by Chinese but due to technically difficulties, it cannot implement independently by the China construction enterprises for the construction projects, the provinces, autonomous regions and municipalities approves the construction, the administration department can be jointly undertaken by the Chinese and foreign construction companies.

Foreign-invested construction enterprises are applicable to the following laws and regulations, they include   "Construction Law", "People's Republic of China Bidding", "Foreign Equity Joint Ventures Law"; "Law of the PRC CJV "; " PRC Foreign Enterprise Law"; "Construction Quality Management Regulations" and other laws and administrative regulations.
Establishment in PRC, foreign-invested construction enterprise that apply for construction enterprise qualification with the implementation of supervision and management of construction enterprises with foreign investment, for "Foreign-invested Construction Enterprises."