20020927  The Ministry of Construction　

Chapter I General Provisions

Article 1 The regulations are formulated according to the
Construction Law of People's Republic of China, Tendering Law of the
People's Republic of China, Law of the People's Republic of China on
Chinese and Foreign Equity Joint Ventures, 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 and relevant
laws and administrative regulations, for the purpose of opening
wider to the outside world and standardize management of
Construction Enterprises with Foreign Investment.

Article 2 The regulations apply to the establishment of Construction
Enterprises with Foreign Investment within China, the application
for the aptitude of construction enterprises and the supervision and
management of Construction Enterprises with Foreign Investment. What
are called here as " Construction Enterprises with Foreign
Investment" refer to Construction Enterprises with Foreign
Investment, equity and contractual joint ventures of construction
enterprises set up within China in accordance with Chinese laws and
regulations.
Article 3 To establish Construction Enterprises with Foreign
Investment within the People's Republic of China and engage in
construction 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 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 construction actions by
Construction Enterprises with Foreign Investment within China. The
legal business activities and legitimate rights and interests of
Construction Enterprises with Foreign Investment 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 Construction
Enterprises with Foreign Investment is subject to the foreign trade
and economic administrative agencies under the State Council, and
management of aptitude of Construction Enterprises with Foreign
Investment 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 Central Government take charge of the
establishment of Construction Enterprises with Foreign Investment
within the mandate. While the construction departments of provinces,
autonomous regions and municipalities directly under the Central
Government take charge of the aptitude management within their
respective administrative region according to these regulations.
Chapter II Examination and Approval of the Establishment and
Aptitude of Enterprises
Article 6 The application for and approval of the establishment and
aptitude of foreign-invested enterprise are subject to management by
layer and category. Application for a special class or class A in
the general contract series of construction, or a class A in the
specialized contract series should be approved by the competent
foreign trade and economy 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 or
lower level or for a class in the labor sub-contracting series
should be approved by the foreign trade and economic department of
governments of provinces, autonomous regions and municipalities
directly under the Central Government in terms of establishment and
by the construction department of local government in terms of
aptitude. When the Chinese investor of a joint venture or
contractual construction enterprise is under the management of the
central government, its establishment and qualification are to be
approved by competent foreign trade and economic department and
construction department of the State Council.
Article 7 Procedures of applications for launching of Construction
Enterprises with Foreign Investment, aptitude of a special class or
class A in the general contract series of construction, or a class A
in the specialized contract series:
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
Central Government 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 enterprises shall
apply in case of application for the aptitude of a construction
enterprise after the obtaining a business license for a corporate
legal person.
Article 8 Application for the establishment of Construction
Enterprises with Foreign Investment and class B or lower level in
the general contract series of construction, or a class in the labor
sub-contracting series is subject to the foreign trade and economic
department and construction department of governments of provinces,
autonomous regions and municipalities directly under the Central
Government 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 Central Government 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 Construction Enterprises
with Foreign Investment 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 construction enterprise with foreign investment:
I. Application for the launching of Construction Enterprises with
Foreign Investment signed by the legal representative of the
investor;
II. Feasibility report prepared or recognized by the investor;
III. Contract and constitution of the Construction Enterprises with
Foreign Investment signed by the legal representative of the
investor. (Constitution only needed in case of a construction
enterprise with foreign investment 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
construction enterprise with foreign investment:
I. Application for aptitude of a construction enterprise with
foreign investment;
II. Certificate of approval for the foreign-invested enterprise;
III. Business license of the corporate legal person;
IV. Certificate of banking credit for the investor;
V. 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;
VI. 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.
VII. Materials required by Regulations on the Aptitude of
Construction Enterprises.
Article 12 The investment of the Chinese investor of joint ventures
and contractual construction enterprises should comprise at least
25% of the register capital.
Article 13 The class of aptitude of the joint ventures and
contractual construction enterprises that have been established
before the implementation of these regulations should be rechecked
according to these regulations and the Regulations on the Aptitude
of Construction Enterprises.
Article 14 The required materials should be in Chinese, and a
Chinese version should be offered if the original is in a foreign
language.
Chapter III Scope of Project Contracting
Article 15 Only the following kinds of projects are within the
business scope of construction enterprises with foreign investment
according to their aptitude class:
I. Projects built exclusively with foreign investment and foreign
grant.
II. Construction projects financed by international financial
institutions or awarded by international bidding according to loan
terms.
III. Joint projects with 50% or more than 50% of foreign investment;
or joint projects that, though with less than 50% of foreign
investment, can't be independently implemented by Chinese
construction enterprises due to technical difficulties, approved by
the construction department of governments of provinces, autonomous
regions and municipalities.
IV. Joint contracting is allowable, upon the approval of competent
construction departments of governments of provinces, autonomous
regions and municipalities directly under the central government,
for a domestic-invested project that is not able to be independently
undertaken by Chinese enterprises due to technical difficulties.
Article 16 Joint ventures and contractual construction enterprises
should contract projects within the authorized scope corresponding
to its aptitude class.
Chapter IV Supervision and Administration
Article 17 The standards for construction enterprise aptitude issued
by the construction department of the State Council shall apply to
the aptitude class of construction enterprises with foreign
investment.
Article 18 As a general contractor of a project, the construction
enterprise with foreign investment itself should undertake the
construction task of the major structure of the project.
Article 19 The aptitude class of the side with lower class shall be
the basis for the permitted scope of contracting projects in case of
a construction enterprise with foreign investment co-contracting a
project with other construction enterprises.
Article 20 A fine of above 2% to below 4% of the total contract
price shall be imposed upon the construction enterprise with foreign
investment which contracts projects beyond the scope permitted by
its aptitude in breach of Article 15 of the Regulations. A decree of
business suspension for rectification or a demotion of aptitude
class is also possible; the aptitude certificate is to be revoked
for a serious case; any illegal income shall be confiscated.
Article 21 Punishment is to be made according to relevant laws,
regulations and rules for any violation of the Construction Law of
the People's Republic of China, Tendering Law of the People's
Republic of China, Regulations on the Quality of Construction
Projects, and Regulations on the Aptitude of Construction
Enterprise.
Chapter V Supplementary Provisions
Article 22 A foreign enterprise which has obtained a Certificate of
Aptitude for Foreign Enterprise Contracting Projects prior to the
implementation of these regulations is entitled, while launching a
construction enterprise with foreign investment, to apply for
aptitude of a class corresponding to its performance in contracting
projects within the territory of the People's Republic of China. The
class of aptitude of a new construction enterprise with foreign
investment set up by a foreign enterprise that has already
established a foreign-invested enterprise within PRC shall be
checked and ratified in compliance with Regulations on the Aptitude
of Construction Enterprises.
Article 23 The regulations should be referred to in case of
investors from HK, Macao and Taiwan setting up construction
enterprises in other provinces, autonomous regions and
municipalities directly under the central government for
construction activities, unless otherwise provided in laws,
regulations or stipulations of the State Council.
Article 24 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 25 The regulations enter into force as of December 1, 2002.

Article 26 The Interim Regulations on Foreign Enterprises
Contracting Projects within PRC (Decree No. 32 of the Ministry of
Construction) issued by the Ministry of Construction on March 22
1994 are to be annulled from October 1, 2003.

Article 27 The Provisions on the Establishment of Construction
Enterprises with Foreign Investment (JianJian [1995] No.533)
co-issued by the Ministry of Construction and the Ministry of
Foreign Trade and Economic Cooperation is to be annulled from
December 1, 2002.