Laws of the People's Republic of China

The Ministry of Foreign Trade and Economic Cooperation, the Ministry of Construction

Decree of the Ministry of Construction of PRC and the Ministry of Foreign Trade and Economic Cooperation of PRC

No. 114

This is to issue Regulations on Foreign-invested Construction Design Enterprises, examined and approved by the 63rd meeting of the standing committee of Ministry of Construction and the 10th working meeting of the Ministry of Foreign Trade and Economic Cooperation, which takes effect on December 1, 2002.

Minister of Construction Wang Guangtao

Minister of Foreign Trade and Economic Cooperation Shi Guangsheng

September 27, 2002

Regulations on Foreign-invested Construction Design Enterprises

Article 1

The regulations are formulated according to the Construction Law of People's Republic of China, Law of the People's Republic of China on Joint Ventures with Chinese and Foreign Investment, Law of the People's Republic of China on Chinese-Foreign Contractual Joint Ventures, Law of the People's Republic of China on Foreign-Capital Enterprises, Regulations on the Quality of Construction Projects, Regulations on the Survey and Design of Construction Projects and relevant laws and administrative regulations, for the purpose of opening wider to the outside world and standardize management of foreign-invested construction design enterprises.

Article 2

The regulations apply to the establishment of foreign-invested construction design enterprises within China, the application for the aptitude of construction design enterprises and the supervision and management of foreign-invested construction design enterprises. What are called here as "foreign-invested construction design enterprises" refer to foreign-invested construction design enterprises, equity and contractual joint ventures of constructive design set up within China in accordance with Chinese laws and regulations.

Article 3

To establish foreign-invested construction design enterprises within the People's Republic of China and engage in construction design activities, a certificate of approval for foreign-invested enterprise should be obtained from competent administrative agencies for foreign trade and economic activities with registration accomplished at the State Administration for Industry and Commerce or authorized local industrial and commercial bureaus and an aptitude certificate for construction design enterprise from competent construction department is also needed.

Article 4

The laws, regulations and rules of the People's Republic of China should be observed in any actions of constructive design by foreign-invested construction design enterprises within China. The legal business activities and legitimate rights and interests of foreign-invested construction design enterprises within China are under the protection of laws, rules and regulations of the People's Republic of China.

Article 5

Management of the establishment of foreign-invested construction design enterprises is subject to the foreign trade and economic administrative agencies under the State Council, and management of aptitude of foreign-invested construction design enterprises is subject to the competent construction department of the State Council. The foreign trade and economic administrative departments of provinces, autonomous regions and municipalities directly under the State Council take charge of the establishment of foreign-invested construction design enterprises within the mandate. While the construction departments of provinces, autonomous regions and municipalities directly under the State Council take charge of the aptitude management within their respective administrative region according to these regulations.

Article 6

The application for and approval of the establishment and aptitude of foreign-invested construction design enterprises are subject to management by layer and category. Application for class A in construction design or class A or B in other construction projects should be approved by the competent foreign trade and economic department of the State Council in terms of establishment and by the competent construction department of the State Council in terms of qualification. Application for class B in construction design or class C or lower level in other construction projects should be approved by the foreign trade and economic department of governments of provinces, autonomous regions and municipalities directly under the State Council in terms of establishment and by the construction department of local government in terms of aptitude.

Article 7

Procedures of applications for launching of foreign-invested construction design enterprises, aptitude of class A in construction design and aptitude of class A and B in other construction projects design:

I.

Application be submitted to the foreign trade and economic department of government of provinces, autonomous regions and municipalities directly under the central government of the planned location for the enterprise.

II.

The foreign trade and economic department of the government of provinces, autonomous regions and municipalities directly under the State Council should complete preliminary examination in 30 days since the day of application acceptance and, upon approval, submission should be made to the foreign trade and economic department of the State Council.

III.

The competent foreign trade and economic department of the State Council shall send within 10 days after the day of receipt of the primarily examined materials the application materials to the competent construction department of the State Council to solicit opinions. The construction department should offer a written opinion within 30 days from the receipt of the opinion-soliciting letter. The competent foreign trade and economic department of the State Council shall make a written decision within 30 days after the receipt of the written opinion on whether to grant a certificate of approval or, if not approve, give the reasons of refusal in written form.

IV.

Foreign-invested enterprises obtaining the approval certificate should register with the departments in charge within 30 days.

V.

The regulation on aptitude of construction design enterprises shall apply in case of application for the aptitude of a construction design enterprise after the obtaining a business license for a corporate legal person.

Article 8

Application for the establishment of foreign-invested construction design enterprises and class B in architectural projects, or class C and lower level in other constructive projects, is subject to the foreign trade and economic department and construction department of governments of provinces, autonomous regions and municipalities directly under the State Council by referring to Article 7 of the Regulations and Regulations on aptitude construction enterprises and considering local conditions. The aptitude examined and approved by construction department of the governments of provinces, autonomous regions and municipalities directly under the State Council should be submitted to the construction department of the State Council for records.

Article 9

Concerned procedures should be undergone at the competent construction department if the aptitude of foreign-invested construction design enterprises is to be upgraded or aptitude other than the main item is to be added through application.

Article 10

The following materials should be submitted to the competent foreign trade and economic department in applying for the launching of a foreign-investment construction design enterprise:

I.

Application for the launching of foreign-invested construction design enterprises signed by the legal representative of the investor;

II.

Feasibility report prepared or recognized by the investor;

III.

Contract and constitution of the foreign-invested construction design enterprises signed by the legal representative of the investor. (Constitution only needed in case of a foreign-invested construction design enterprise to be set up);

IV.

An advanced notice of approval for the name of the enterprise;

V.

Certificate issued by the investor's country or region for registration and certificate of banking credit of the enterprises engaging in construction project design;

VI.

Documents of office responsibilities and evidences for chairman of the board of directors, board members, managers and engineering technical manager to be appointed by the investor;

VII.

Balance sheet and income sheet of the investor for the latest three years which have been audited by a register accountant or an accounting firm.

Article 11

The following materials should be submitted to the competent construction department in applying for an aptitude of a foreign-invested construction design enterprise:

I.

Application for aptitude of a foreign-invested construction design enterprise;

II.

Certificate of approval for the foreign-invested enterprise;

III.

Business license of the corporate legal person;

IV.

Certificate of registration and certificate of banking credit of the enterprises engaging in constructive project design issued by foreign investor's country or region;

V.

Certificate of qualification for individuals obtained in the home country or region of foreign service providers, and certificate of performance and reputation in construction design for individuals and enterprises issued by competent governmental agencies, industrial institute, association pr notary organs of their original country or region.

VI.

Other materials required by regulations on aptitude of construction design enterprises.

Article 12

The required materials should be in Chinese, and a Chinese version should be offered if the original is in a foreign language.

Article 13

The foreign investors and foreign service providers of the foreign-invested construction design enterprises should be either construction project designer, registered architect or registered engineer or in their own country or region.

Article 14

The investment of the Chinese investor of joint ventures and contractual construction design enterprises should comprise at least 25% of the register capital.

Article 15

Application of foreign-investment construction design enterprise for aptitude of a constructive project design enterprise should meet the layered standards for construction design enterprises. Foreign service providers who get qualified for Chinese registered architect and engineer should constitute at least 1/4 of the total registered staff required by its class of aptitude; foreign service providers with relevant technical background should constitute at least 1/4 of the total backbone technicians required by the its class of aptitude. As for joint venture or contractual foreign-invested construction design enterprise applying for aptitude of a constructive project design enterprise, foreign service providers who get qualified for Chinese registered architect and engineer should constitute at least 1/8 of the total registered staff required by its class of aptitude; foreign service providers with relevant technical background should constitute at least 1/8 of the total backbone technicians required by the its class of aptitude.

Article 16

Foreign service providers of the foreign-invested construction design enterprises registered in China as architects, engineers and backbone technicians should stay within the territory of China no less than six months cumulatively per year per person.

Article 17

Punishment will be made according to relevant laws, regulations and rules for any violation of the Construction Law of the People's Republic of China, Regulations on the Quality of Construction Projects, Regulations on Survey and Design of Construction Projects and Provisions on the Aptitude of Construction, Survey and Design Enterprises.

Article 18

The regulations should be referred to in case of investors from HK, Macao and Taiwan setting up construction design enterprises in other provinces, autonomous regions and municipalities for construction design activities, unless otherwise provided in laws, regulations or stipulations of the State Council.

Article 19

The time of accepting application for the establishment of a foreign-invested enterprise shall be determined by the competent construction department and foreign trade and economic department of the State Council.

Article 20

The regulations are subject to the interpretation of the competent construction department and foreign trade and economic department of the State Council according to their respective scope of responsibilities.

Article 21

The regulations enter into force as of December 1, 2002 and Regulations on the Examination and Approval of the Establishment of Sino-Foreign Cooperative Project Design Institutions (JianShe [1992] No.180) becomes invalid simultaneously.