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A to-do list for foreign buyers in Chinese real estate market

Big cities in China possesses highly developed infrastructure as well as abundant business opportunities and, in these regions, social security is under sufficient protection of public administration. All these factors and recent excellent performance in the pandemic control have made this country an increasingly attractive destination for foreigners who are open-minded for a new career and life in a newly advanced civilization. This trend is accelerating even faster when COVID-19 outbreak continues unchecked in many western countries.

Housing comes first when people think of moving across borders. It seems even necessary to get an abode ownership when you are planning a long-term residence abroad. So how could I figure out if I qualify as a real estate buyer in China?

Chinese government allows individual foreigners to buy department or a house for purpose of personal residence, and an institute or company from abroad could own their abode for its own use. Therefore, basically the real estate purchase is available for two types of buyers, and Chinese laws and regulations have set different standard for them respectively. Here is a brief introduction.

First, if you are an individual buyer, the period of stay matters. Foreigners who have worked or studied in China for over one year are entitled by the law to purchase a commercial department. But note that this is not the only prerequisite. You also need to be issued a permission statement, usually by the company or institute where you work. This is because a real-name system is run for foreigner-related real estate purchase.

If you are the manager or legal representative of an organization affiliated to an international enterprise, to get a steady abode in China for operation of your team is workable as long as some requirements are met.

The international enterprise that your team is affiliated to shall have set branches and representative offices. In short, the existence of entities in China is a necessity. Additionally, the said subsidiary entity shall hold the certificate from relevant administration stating that the establishment of this entity is officially permitted.

However, the fast expanding real estate market in China has made a house an ideal option for investment. We pointed out a way for those who want a house for their own use, but what if you want to invest in a house for long-term profit? There is a way out.

According to relevant regulations, the first step is to register and establish an investment company. For example, if your favorable location is Shenzhen, then you need to apply to the Shenzhen Bureau of Commerce for a “Foreign investment enterprise approval certificate”, and apply to Shenzhen Administration for Market Regulation for a Business License. Note that at this stage, these two certificates are both valid for only a year temporarily, as you will need to switch them to official ones after some processes.

The second step is to settle full land transaction fees to the local Ministry of Natural Resources (basically land in China is public-owned). After the settlement of transaction fees, you can hold those two above-mentioned temporary certificates to apply to the Ministry of Natural Resources for a National Land Use Permit. With the permit, you can switch your one-year valid Business License and Foreign investment enterprise approval certificate into two official versions respectively with consistent time period with your operation period. The final step is to finish the taxation registration in the local Taxation Administration.

In short, the real estate market is open for investors, individual buyers, as well as branches of international enterprises, and no matter what purpose is, abode purchase is achievable as long as you have the patience to fulfill a statutory process. If you want to learn more and get assistance in your real estate issues, do not hesitate to contact us.

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Larry Zhou, Partner

Landing Law Offices China

Mobile& WhatsApp: +86 13342931852


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