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A brief introduction of policies and regulations for potential property buyers from foreign countries

Although there are some restrictions, foreigners are permitted to acquire real property in China.

The relevant restrictions are generally listed below:

Any foreign entities and individuals who intend to purchase real property not for self-use in China must first establish foreign invested enterprises (FIEs) and then conduct business within its business scope. Without the establishment of FIEs in China, foreign entities or individuals are not permitted to purchase real property that is not for self-use. This is so called rule of Business Existence.

For foreign entities' branches or representative offices in China, unless otherwise they are real estate enterprises upon approval by government, and the foreign individuals who have worked in China for more than one year may purchase real property for self-use or residence. However, they are allowed to buy only one apartment for self-use or residence.

The foreign entities who have not yet established branches or rep offices in China or the foreign individuals who have not yet worked or studied more than one year in China may not purchase real property. The Chinese citizens residing in Hong Kong, Macao, Taiwan and overseas Chinese may purchase the certain area of real property in China for self-residence.

For a foreigner to purchase a new property or a second hand property in Sanya, the taxes are the same as for Chinese buyers. The foreign purchaser needs an authorized Chinese name (notarization). The cost will be RMB200. Having several copies at hand are recommended for possible future usage. One additional copy will cost RMB10. The name on your property license and buying contract should contain your passport name as well as your Chinese name. Foreigners should show their ID cards, passports, residence permits, work permit cards and fill in application files and submit them to relevant governmental sections the when applying to buy real property or apartments. All the files they submitted should go through complete notarization process and files in foreign languages should be translated by official-pointed translation companies.

If you are not in China or no time to deal with the leasing issues, you could authorize a good local Real Estate Company in Sanya to manage your property, such as looking for a tenant, contract management, asset management and lease management. The service fee is usually around 2% of the monthly rental. If the property is vacant, the management fee shall be according to the marketing rental.

For those foreigners who take a mortgage, registration fee is around 0.5% to 1% of the loan amount. A 60% to 70% mortgage at the foreign bank (USD loan or RMB loan) or some Chinese banks (USD loan or RMB loan) is possibly available. Different local developers offer different appointed bank mortgage services.

Note: This brief introduction is just for a convenience reference for potential property buyers from foreign countries. Policies and concrete local regulations might be subjected to minor changes. The final interpretation and explanation should only be made by relevant governmental sections of China and Sanya Municipal government.

2011-03-24