Circular of the State Administration of Foreign Exchange and Ministry of Construction on Relevant Issues concerning Regulating the Administration of Foreign Exchange in Real Estate Market |
Hui Fa [2006] No. 47 The branches of the State Administration of Foreign Exchange and the foreign exchange administrative departments in each province, autonomous region, and municipality directly under the Central Government, the branches of the State Administration of Foreign Exchange in Shenzhen, Dalian, Qingdao, Xiamen, Ningbo, the construction departments in each province and autonomous region, the bureaus of houses, land and resources (construction commissions) in each municipality directly under the Central Government, head offices of all designated Chinese-funded foreign exchange banks, In order to implement the Opinions concerning Regulating the Admission and Administration of Foreign Investments to the Real Estate Market issued by the Ministry of Construction and the other five ministries and commissions (Jian Zhu Fang [2006] No. 171) and improve the healthy development of the real estate market, relevant issues of foreign exchange administration, the stipulations concerning the regulation of admission and administration of foreign investments to the real estate market are hereby announced as follows: I. A branch or representative office established within the territory of China by a foreign institution (hereinafter referred to as the "domestic branch or representative office"), when buying commercial houses for self use that meet its actual needs in the place of registration , shall be subject to the following stipulations:
A real restate development enterprise shall not keep the money, which is remitted from abroad to any domestic branch or representative office for house purchasing., in the foreign current account. II. A foreign individual that has worked or studied for more than one year within China is available to purchase a commercial house according to his actual needs. He shall comply with the following stipulations:
A real restate development enterprise shall not keep the money for house purchasing, which is remitted from abroad to any foreign individual , in the foreign exchange current account. III. A Hong Kong, Macao or Taiwan resident or an overseas Chinese is available to purchase a certain area of commercial house within China in line with his needs. He shall comply with the following stipulations:
IV. A domestic branch or representative office and foreign individual, which fails to complete the commercial housing business for any reason and then need to remit abroad the Renminbi refund used to buy commercial housing after purchasing foreign exchange, shall apply to the original designated foreign exchange bank with the following documents. After the authenticity of the said documents has been examined and verified by the designated foreign exchange bank, the money for house purchasing in Renminbi and its interests may be used to purchase foreign exchange and then be transferred to the foreign exchange account of the foreign institution or of the foreign individual:
V. The RMB fund acquired by a domestic branch, representative office or foreign individual through selling domestic commercial housing that it (he) purchases, after the branch of the State Administration of Foreign Exchange or foreign exchange administrative department (hereinafter referred to as the foreign exchange bureau) has examined and verified the following documents, is available to be used to purchase foreign exchange and then be remitted abroad.:
VI. If a foreign-funded real estate enterprise fails to pay all the registered capital,to acquire a Certificate for Using State-owned Land, or to have its development project fund reach 35% of the total investments to the project, it shall not borrow any foreign debt from abroad, nor shall the foreign exchange bureau implement the registration of its foreign debt or approve the conversion of foreign debt into RMB. VII. Where an foreign institution or individual merges a real estate enterprise within China through equity transfer or any other ways or acquires the equities of the Chinese party of an joint venture enterprise, if it (he) fails to pay the lump-sum money for transfer with its internal capital, the foreign exchange bureau shall not implement the registration of foreign exchange income from transfer of equities. If the Chinese party or the foreign party of a foreign-funded real estate enterprise, in contract, articles, the entity transfer agreement as well as other documents, make any promised articles concerning fixed return or fixed return in disguised form to any party,, the foreign exchange bureau shall not implement the registration or alternation registration of foreign exchange of foreign-funded enterprise. VIII. The foreign institution or individual shall not use the fund in the special foreign exchange account which is established for foreign investors in the bank within China to develop or manage the real estate business. IX. A designated foreign exchange bank shall, in accordance with the stipulations of this Circular, strictly examine and implement the revenue and expenditure and conversion business of foreign exchange through the purchasing and sale of commercial housing within China by domestic branches, representative offices and foreign individuals. A designated foreign exchange bank shall, on a monthly basis, summarize the information about the revenue and expenditure, and conversion business of foreign exchange through the purchasing and sale of commercial housing within China by domestic branches, representative offices and foreign individuals and shall, before 10th day of each month, submit the relevant information of the last month, according to the format in Annex 1, to the local foreign exchange bureau. X. A foreign exchange bureau shall strengthen the statistical monitoring and supervisory administration of the revenue and expenditure, and conversion business of foreign exchange through the purchasing and sale of commercial housing within China by domestic branches, representative offices and foreign individuals and intensify the contact and communication with the local real estate administrative department. Before the 15th day of each month, the foreign exchange bureau shall summarize and submit the relevant statistical data of the last month in the areas that come under its jurisdiction to the State Administration of Foreign Exchange according to format in Annex 2. If discovering any abnormal phenomenon or violation, the foreign exchange bureau shall investigate and report it in time to the State Administration of Foreign Exchange. A real estate administrative department shall be in strict accordance with the system for registration and filing of contracts for the advance sale of commercial housing. Meanwhile, it shall enhance the coordination and collaboration between departments and shall establish and perfect mechanisms for sharing the information about the real estate business relating to foreign investment and for notifying other departments of the information. XI. If any designated foreign exchange bank, domestic branch, representative office or foreign individual violates this Circular, the foreign exchange bureau shall punish it according to the Regulation of the People's Republic of China on the Administration of Foreign Exchange and other relevant stipulations. A real estate administrative department shall implement the relevant laws, regulations and policies carefully, establish and perfect a mechanism for the supervision and penalties for violations of laws and disciplines occurring in the real estate business and shall seriously punish and investigate these violations. XII. This Circular shall come into force as of the date of promulgation. If there are any discrepancies between this Circular and past rules and regulations, this Circular shall prevail. Before this Circular comes into force, if any domestic branch, representative office or foreign individual has signed a contract for commercial housing, the foreign exchange matters related to the transfer of commercial housing shall be dealt in line with the former regulations. After receiving this Circular, each branch of the State Administration of Foreign Exchange or foreign exchange administrative department shall timely transmit it to the central sub-branches or and foreign-funded banks in the area that come under its jurisdiction. After receiving this Circular, the construction department of each province or autonomous region, or each bureau of houses, land and resources (construction commission) of each municipality directly under the Central Government shall timely transmit the Circular to the real estate administrative department. After each designated foreign exchange bank receives this Circular, it shall transmit the Circular to its branches as soon as possible. Annexes
(for Branches of the State Administration of Foreign Exchange) State Administration of Foreign Exchange, Ministry of Construction September 1, 2006 |