Regulations on Administration of Foreign-Invested Construction

The Ministry of Construction of the People’s Republic of China

                The Ministry of Foreign Trade and Economic Cooperation of the
                People’s Republic of China  
               
              Decree No. 114  
               
              Regulations on Administration of Foreign-Invested Construction
                and Engineering Design Enterprises approved respectively at the
                63rd Executive Meeting of the Ministry of Construction on 9 September
                2002 and at the 10th Ministerial Meeting of the Ministry of Foreign
                Trade and Economic Cooperation on 17 September 2002 are now issued
                and shall come into force on 1 December 2002.  
               
                 
              Minister of the Ministry of Construction:&;#9;&;#9;Wang Guangtao

                Minister of the Ministry of Foreign Trade and Economic Cooperation:
                Shi Guangsheng  
               
              27 September 2002  
               
              　  
              Regulations on Administration of Foreign-Invested
                Construction and Engineering Design Enterprises  
               
              Article 1 These Regulations hereof are formulated in order to
                further the opening up to the outside and standardise the administration
                of foreign-invested construction and engineering design enterprises
                in accordance with such laws and regulations as the Construction
                Law of the People’s Republic of China, the Law of the People’s
                Republic of China on Sino-Foreign Equity Joint Ventures, the Law
                of the People’s Republic of China on Sino-Foreign Cooperative
                Joint Ventures, the Law of the People’s Republic of China on Wholly
                Foreign-Owned Enterprises, the Regulations on Administration of
                Construction Engineering Quality and the Regulations on Administration
                of Reconnoitring and Designing of Construction Projects.  
               
              Article 2&;#9;These Regulations shall apply to the establishment
                of foreign-invested construction and engineering design enterprises
                within the territory of the People’s Republic of China, the application
                for construction and engineering design enterprise qualifications
                and the administration and supervision of the foreign-invested
                construction and engineering design enterprises.  
               
              The term ‘foreign-invested construction and engineering design
                enterprise’ mentioned in these Regulations refers to a wholly
                foreign-owned construction and engineering design enterprise,
                or a Sino-foreign equity construction and engineering design joint
                venture or a Sino-foreign cooperatively construction and engineering
                design enterprise established within the territory of the People’s
                Republic of China in accordance with Chinese laws and regulations.  
               
              Article 3 &;#9;A foreign investor, which intends to establish
                a foreign-invested construction and engineering design enterprise
                within the territory of the People’s Republic of China and carry
                out construction and engineering design business shall, in accordance
                with laws, obtain the foreign-invested enterprise approval certificate
                from the relevant foreign trade and economic cooperation administration
                department and register with the State Administration of Industry
                and Commerce or its authorised administration of industry and
                commerce at local levels, and also obtain the qualification certificate
                of construction and engineering design enterprise from the relevant
                construction administration department.   
               
              Article 4 &;#9;Foreign-invested construction and engineering design
                enterprises shall abide by the laws, regulations and rules of
                the People’s Republic of China when carrying out construction
                and engineering design activities within the territory of the
                People’s Republic of China.  
               
              The lawful operation of foreign-invested construction and engineering
                design enterprises and their legal rights and interests within
                the territory of the People’s Republic of China shall be protected
                by Chinese laws, regulations and rules.  
               
              Article 5 &;#9;The foreign trade and economic cooperation administration
                department of the State Council shall be responsible for the administration
                of establishing foreign-invested construction and engineering
                design enterprises. The construction administration department
                of the State Council shall be responsible for the administration
                of the qualifications of foreign-invested construction and engineering
                design enterprises.  
               
              The foreign trade and economic cooperation administration departments
                of the people’s government of provinces, autonomous regions or
                directly administered municipalities shall be responsible for
                the administration of establishment of foreign-invested construction
                and engineering design enterprises within their authorized jurisdiction
                ; the construction administration departments of the people’s
                government of provinces, autonomous regions or directly administered
                municipalities shall, in accordance with these regulations, be
                responsible for the administration of the qualifications of the
                foreign-invested construction and engineering design enterprises
                within their administrative region.  
               
              Article 6 &;#9;The application for and the examination and approval
                of the establishment of a foreign-invested construction and engineering
                design enterprise and the qualifications shall be managed by a
                grading and categorization system.  
               
              Where an applicant is to apply for Grade A qualifications for
                construction and engineering design or other Grade A or Grade
                B qualifications for construction and engineering design, the
                establishment of the foreign-invested construction and engineering
                design enterprise shall be examined and approved by the foreign
                trade and economic cooperation administration department of the
                State Council and its qualifications shall be examined and approved
                by the construction administration department of the State Council.
                Where an applicant is to apply for Grade B qualifications for
                construction and engineering design or other Grade C or lower
                qualifications for construction and engineering design, the establishment
                of the foreign-invested construction and engineering design enterprise
                shall be examined and approved by the foreign trade and economic
                cooperation administration department of the people’s government
                of the province, the autonomous region or the directly administered
                municipality and its qualifications shall be examined and approved
                by the construction administration department of the people’s
                government of the province, the autonomous region or the directly
                administered municipality.  
               
              Article 7 &;#9;The procedures for the establishment of a foreign-invested
                construction and engineering design enterprise and the application
                for construction and engineering design qualifications or other
                Grade A or B engineering design qualifications shall be:  
               
              (1) The applicant shall submit an application to the foreign
                trade and economic cooperation administration department of the
                people’s government of the province, the autonomous region or
                the directly administered municipality where the proposed foreign-invested
                construction and engineering design enterprise is to be established.  
               
              (2) The foreign trade and economic cooperation administration
                department of the people’s government of the province, or the
                autonomous region or the directly administered municipality shall
                complete the preliminary examination within 30 days of receiving
                the application, and shall, if it grants the preliminary approval,
                submit the application to the foreign trade and economic cooperation
                administration department of the State Council for further approval.  
               
              (3) Within 10 days of receiving the application for further approval,
                the foreign trade and economic cooperation administration department
                of the State Council shall forward the application to the construction
                administrative department of the State Council for review and
                comments. The construction administration department of the State
                Council shall provide its opinion in writing within 30 days of
                receiving the request. Within 30 days of receiving the response,
                the foreign trade and economic cooperation administration department
                of the State Council shall decide whether or not to approve the
                application and express such a decision in written form. If the
                application is approved, a foreign-invested enterprise certificate
                shall be granted; if the application is not approved, reasons
                for the disapproval shall be given in written form.  
               
              (4) Within 30 days of receiving the approval certificate, the
                applicant shall carry out enterprise registration with the relevant
                registration department.  
               
              (5) After obtaining business license for the legal entity, if
                the foreign-invested construction and engineering design enterprise
                is to apply for the construction and engineering design enterprise
                qualifications, the application shall be carried out in accordance
                with the Regulations on Administration of Construction and Engineering
                Design Enterprise Qualifications.  
               
              Article 8 &;#9;The procedures for the establishment of a construction
                and engineering design enterprise and the application for Grade
                B qualifications and Grade C or lower qualifications for engineering
                design shall be administered by the construction administration
                department and the foreign trade and economic cooperation administration
                department of the people’s government of the province, or the
                autonomous region or the directly administered municipality based
                on local conditions with reference to Article 7 of these Regulations
                and Regulations on Administration of Construction and Engineering
                Design Enterprise Qualifications.  
               
              Examination and approval of the qualifications of foreign-invested
                construction and engineering design enterprises by the construction
                administration departments of the People’s government of provinces,
                autonomous regions or directly administered municipalities shall
                be put on file with the construction administration department
                of the State Council within 30 days after the approval is given.  
               
              Article 9 &;#9;The application by a foreign-invested construction
                and engineering design enterprise to upgrade its qualifications
                or to add additional engineering qualifications shall be made
                to the relevant construction administration department in accordance
                with relevant regulations.  
               
              Article 10 &;#9;An applicant which intends to establish a foreign-invested
                construction and engineering design enterprise shall submit the
                following documents to the relevant foreign trade and economic
                cooperation administration department:  
               
              (1) Application forms to establish a foreign-invested construction
                and engineering design enterprise signed by the investor’s legal
                representative;  
               
              (2) The feasibility study report prepared or accepted by the
                investor;  
               
              (3) The contract for establishment of foreign-invested construction
                and engineering design enterprise and the articles of association
                signed by the investor’s legal representative (only the the articles
                of association are required for the establishment of a wholly
                foreign-owned construction and engineering design enterprise);  
               
              (4) The notification of pre-verification of the name of the enterprise;  
               
              (5) Documentary evidence of legal entity registration of the
                investor to carry out construction and engineering design in its
                home country or region and its bank credential letter;  
               
              (6) Appointment letters and documentary evidence of the investor’s
                designated chairman and members of the board of directors, managers
                and technical managers etc.; and  
               
              (7) Balance sheets and profit and loss accounts of the investor
                over the past three years audited by a certified accountant or
                an accounting firm.  
               
              Article 11 &;#9;The applicant applying for foreign-invested construction
                and engineering design enterprise qualifications shall submit
                the following documents to the relevant construction administration
                department:  
               
              (1) Application forms for the qualifications for a foreign-invested
                construction and engineering design enterprise;  
               
              (2) The approval certificate for the establishment of the foreign-invested
                construction and engineering design enterprise;   
               
              (3) The business license for the legal entity;   
               
              (4) Documentary evidence of legal entity registration of the
                investor to carry out construction and engineering design in its
                home country or region and its bank credential letter;  
               
              (5) Professional qualification certificate issued by his home
                country or region and the individual or enterprise construction
                and engineering design track record and documentary evidence of
                its reputation issued by the relevant governmental department
                or professional institution, association or notary public; and
               
               
              (6) Other documents as required by Regulations on Administration
                of Construction and Engineering Design Enterprise Qualifications.
               
               
              Article 12&;#9;All materials required to be submitted by an applicant
                under these Regulations shall be in Chinese. If the original documentary
                evidence is in a foreign language, a Chinese translation shall
                be provided.  
               
              Article 13 &;#9;The foreign investor or the foreign service provider
                of a foreign-invested construction and engineering design enterprise
                shall be an enterprise engaged in construction and engineering
                design or a certified architect or a certified engineer in his
                or her home country.  
               
              Article 14 &;#9;The total capital contribution of the Chinese
                party to a Sin-foreign equity construction and engineering design
                joint venture or a Sino-foreign cooperatively construction and
                engineering design joint venture shall not be less than 25% of
                the registered capital.   
               
              Article 15&;#9;The criteria of grading of qualifications of foreign-invested
                construction and engineering design enterprises shall be in accordance
                with the requirements of grading of qualifications of construction
                and engineering design enterprise issued by the construction administration
                department of the State Council.  
               
              Where a wholly foreign-owned construction and engineering design
                enterprise applies for the construction and engineering design
                enterprise qualifications, its foreign service providers who have
                been qualified as certified architects or certified engineers
                in China shall not be less than 1/4 of the total certified professionals
                required under the qualification grading criteria, and the foreign
                service providers who have the relevant design experience shall
                not be less than 1/4 of the total key technical personnel required
                under the qualification grading criteria.  
               
              Where a Sin-foreign equity construction and engineering design
                joint venture or a Sino-foreign cooperatively managed construction
                and engineering design enterprise applies for the construction
                and engineering design enterprise qualifications, its foreign
                service providers who have been qualified as certified architects
                or certified engineers in China shall not be less than 1/8 of
                the total registered professionals required under the qualification
                grading criteria, and its foreign service providers who have the
                relevant design experience shall not be less than 1/8 of the total
                key technical staff required under the qualification grading criteria.  
               
              Article 16 &;#9;Each of the architects and engineers certified
                in China and the key technical personnel of the foreign service
                provider in a foreign-invested construction and engineering design
                enterprise shall reside within the territory of the People’s Republic
                of China for no less than a cumulative period of 6 months each
                year.   
               
              Article 17 &;#9;Where a foreign-invested construction and engineering
                design enterprise carrying out construction and engineering design
                activities within the territory of the People’s Republic of China
                violates the Construction Law of the People’s Republic of China,
                Regulations on Administration of Construction Engineering Quality,
                Regulations on Administration of Prospecting and Designing of
                Construction Projects and Regulations on Administration of Construction
                Engineering Prospecting Design Enterprise Qualifications and other
                relevant laws, regulations and rules, it shall be penalized in
                accordance with relevant provisions.  
               
              Article 18 &;#9;Investors from Hong Kong Special Administrative
                Region, Macao Special Administrative Region or Taiwan shall establish
                construction and engineering design enterprises and carry out
                businesses in other provinces, autonomous regions or directly
                administered municipalities in accordance with these Regulations,
                unless it is otherwise provided by laws, regulations and the State
                Council.  
               
              Article 19 &;#9;The timing for accepting and processing the application
                for establishment of foreign-invested construction and engineering
                design enterprises shall be determined by the construction administration
                department of the State Council and the foreign trade and economic
                cooperation administration department of the State Council.  
               
              Article 20&;#9;The construction administration department of the
                State Council and the foreign trade and economic cooperation administration
                department of the State Council shall be responsible for interpreting
                these Regulations in accordance with their functions.   
               
              Article 21&;#9;These Regulations shall go into force on 1 December
                2002. Regulations on Administration of Establishment of Sino-Foreign
                Project Design Joint Venture (File No. 180, 1992) shall be repealed
                at the same time.