Circular of the MOFCOM on Doing Well in Filing of Foreign Investment in Real Estate Industry

Shang Zi Han [2008] No. 23

Commercial departments of provinces, autonomous regions, municipalities directly under the Central Government, separately planning cities and Xinjiang Production and Construction Corp.,

In 2006, approved by the State Council, six ministries including former Ministry of Construction jointly promulgated the Opinions on Regulating the Accession and Administration of Foreign Investment in Real Estate Industry (Jian Zhu Fang No. 2006171, hereinafter referred to as Document No. 171), and the Ministry of Commerce and the State Administration of Foreign Exchange promulgated the Circular on Further Strengthening and Regulating the Approval of and Supervision over Foreign Direct Investment in Real Estate Industry (Shang Zi Han [2007] No. 50, hereinafter referred to as Document No.50). Local commercial departments of various levels have well implemented the macro-control policies of the State, satisfactorily enforced the relevant provisions on strengthening the regulation over foreign investment in real estate industry, and created a proper working mechanism in filing of foreign investment in real estate industry. For the purpose of carrying out a stricter verification of filing materials, simplifying procedures, improving efficiency and further improving filing work, the relevant matters are hereby notified as follows:

I. The Ministry of Commerce has authorized commercial departments at provincial level to verify filing materials of foreign investment in real estate industry. Local commercial departments shall submit materials which are originally used for filing in the Ministry of Commerce to commercial departments at provincial level for verification after having approved the issues of foreign investment in real estate industry (including establishment of companies, capital increase, share increase, share transfer and A&M) by law.

II. The commercial departments at provincial level shall verify the legitimacy, authenticity and accuracy of the following materials in accordance with the Document No.171, the Document No. 50 and other relevant provisions:

1. Documents regarding land-use right and the ownership of real estate, or signed advance agreements on transferring/purchasing of land-use right or ownership of real estate provided by a company are obtained by force of law and are authentic and valid, compliant with the relevant provisions;

2. The company established with investment (having capital increase) conforms to the principle of the Project Company, and the investment (capital increase) is limited to the approved single real estate project;

3. The registered capital of the company accounts for no less than 50% of the total investment;

4. Materials provided by the company indicate the foreign party to the company is not a company established abroad by any Chinese company/natural person, and shareholders of the company do not have any affiliation or belong to the same actual controller;

5. Chinese and foreign parties to the company do not reach any term to ensure any fixed return or disguised fixed return for any party;

6. The project investment is contributed by stages according to the progress of the project, and the company has made commitment to the use of the capital and installment payment.

III. The commercial departments at provincial level shall verify the said materials with other provincial department in accordance with laws and regulations on foreign investment, macro-regulation measures for real estate industry and relevant provisions on strengthening regulation. For those materials that are complaint with the relevant provisions, the departments will submit the completely filled Filing Form for Foreign Investment in Real Estate Industry (attached below) with official seals of the general office of provincial people's governments and commercial departments at provincial level to the Ministry of Commerce, and the Ministry of Commerce will file them according to law. The verified materials shall be kept in filing by commercial departments at provincial level.

IV. The Ministry of Commerce shall make a sampling check over foreign-invested real estate companies with other departments under the State Council, 5-10 companies per quarter generally. Commercial departments at provincial level shall submit the verified materials of selected companies to the Ministry of Commerce within five working days upon receipt of the notice of the Ministry of the Commerce.

V. Where any foreign-invested real estate company is found not compliant with the existing provisions upon verification, the Ministry of Commerce will notify the administration of foreign exchange to cancel the foreign exchange registration of the company as well as its foreign investment statistics. If any commercial department at the same place violates the relevant provisions twice, the Ministry of Commerce will circulate notice of criticism on it in the commercial system, ask it to make corrections within a time limit and withdraw authorization.

VI. The Circular shall enter into force as of July 1, 2008.

Ministry of Commerce

June 18, 2008

Annex:

Filing Form for Foreign Investment in Real Estate Industry

Corporate code:

Letter of Commitment

The applying company commits as follows:

1. Our application accords with the Opinions on Regulating the Access and Administration of Foreign Investment in Real Estate Industry, the Circular on Further Strengthening and Regulating the Approval of and Supervision over Foreign Direct Investment in Real Estate Industry, and other provisions relevant to foreign investment in real estate industry.

2. All the information filled in the Filing Form for Foreign Investment in Real Estate Industry is complete, accurate and authentic, and all materials submitted is complete, accurate and valid.

If there is any untruth, we will bear corresponding legal responsibilities.

Signature of the Legal representative/authorized person of the applied company____

Seal

------------------------------------------------------------------------------------------------------

Note: Please read all terms carefully before filling, and fill out the form truly and correctly. Mark √ in □ .

Our Department has verified the materials submitted by the Company and the said materials are complete, true and accurate. The approval of the project conforms to the provisions of law and industrial policies. The filing form is hereby submitted for your filing.

If there is any untruth of the above-mentioned guarantee, we assume corresponding legal responsibilities.

Seal of the General Office of Seal of the commercial department

Provincial Peoples' Government Signature of the person-in-charge