Laws of the People's Republic of China

Circular of the General Office of the Ministry of Commerce on Relevant Issues Concerning the Implementation of the Opinions Concerning Regulating the Access to and Administration of Foreign Investment in the Real Estate Market

Administrative commercial departments of all provinces, autonomous regions, municipalities directly under the Central Government, Xinjiang Production and Construction Corps:

The Ministry of Construction, the Ministry of Commerce, National Development and Reform Commission, the People's Bank of China, the State Administration for Industry and Commerce and the State Administration of Foreign Exchange, upon the consent of the State Council, promulgated the Opinions Concerning Regulating the Access to and Administration of Foreign Investment in the Real Estate Market (hereinafter referred to as the Opinions) on July 11, 2006. Relevant issues concerning the approval and administration of foreign-invested enterprises during the implementation of the Opinions are hereby notified as follows:

1.

The foreign-invested real estate enterprises mentioned in the Opinions refer to foreign-invested enterprises that engage in the construction and operation of all kinds of residence such as ordinary residence, apartments and villa, hotels (restaurants), vacation villages, office buildings, exhibition centers, commercial facilities, theme parks, etc. as well as the land development or tract development that aim for the construction of the above-mentioned projects.

2.

Where foreign institutions and individuals (hereinafter referred to as foreign investors) are to purchase non-self-use real estates in China, they shall apply for the establishment of foreign-invested enterprises in accordance with relevant laws, regulations and rules in respect of foreign investment. Upon approval by relevant departments and after registration, they may engage in the related business in accordance with the approved scope of business.

3.

Where the amount of investment of a real estate enterprise established by foreign investment is not less than 10 million dollars, its registered capital shall not be less than 50% of its amount of investment; If the investment amount is more than 3 million dollars but less than 10 million dollars, its registered capital shall not be less than 50% of its amount of investment; If the investment amount is not more than 3 million dollars, its registered capital shall not be less than 70% of its amount of investment.

4.

With respect of the establishment of a foreign-invested real estate enterprise, the commercial administrative departments and the industrial and commercial administrative organs shall grant an approval for establishment and handle the relevant formalities for registration pursuant to law, and issue a one-year Approval Certificate of Foreign-invested Enterprises and Business License. In addition, a statement that "This Certificate shall expire on ___ (date)" shall be clearly given in the remarks column.

5.

-invested real estate enterprises shall pay the land transfer fee to land administrative authorities within validity period, apply for a Certificate for Using State-owned Land and may, in accordance with the Certificate for Using State-owned Land, renew the formal Approval Certificate of Foreign-invested Enterprises in the commercial administrative department and thereafter, renew the Business License with the same term as the Approval Certificate of Foreign-invested Enterprises in the industrial and commercial administrative organs.

6.

The "transfer of projects by foreign-invested real estate enterprises" mentioned in the Opinions refers to the transfer by the foreign-invested real estate enterprises of the land they developed or real estate they constructed to domestic or foreign investors pursuant to the law. The transfer of projects by foreign-invested real estate enterprises shall be submitted for approval in accordance with relevant provisions of the State. The already-built commercial houses, purchased by domestic or foreign institutions or individuals for self-use or self-accommodation do not fall into the scope of the "transfer of projects by foreign-invested real estate enterprises".

7.

Where an overseas investor merges domestic real estate enterprises through equity transfer or any other ways, it shall make appropriate arrangements for the relevant employees, settle the bank debts and pay the transfer fee with its self owned capital in a one-off manner within three months as of the day the business license of the foreign-invested enterprise was issued.

8.

Where an overseas investor acquires the equities of the Chinese party of a foreign-invested real estate enterprise, it shall make appropriate arrangements for the relevant employees, settle the bank debts and pay the transfer fee with its self owned capital in a one-off manner within three months as of the day the equity transfer agreement came into force.

All commercial departments at all levels shall examine and approve foreign-invested real estate enterprises strictly in accordance with the provisions above and in case of any problems encountered in the course of implementation, they may contact the Ministry of Commerce (the Foreign-investment Department) on a timely basis.

General Office of the Ministry of Commerce

August 14, 2006