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The government has tightened the rules by increasing the number of layers needed for approval for foreign investment in the real estate sector, with the Ministry of Commerce issuing the Circular on Properly Handling the Record Filing for Foreign Investment in the Real Property Industry.
According to Philip Zhang, senior partner at Boss & Young, there will be more government agencies directly or indirectly involved in the supervision.
The new law provides provincial governments with the responsibility for ensuring the implementation of law and regulations within their jurisdiction, while at the same time, they are also in charge of reviewing and verifying foreign investments in the real estate sector.
“It remains to be seen whether the General Office will require the consents of other government agencies before they agree to approve the filing forms. Should this be the case, the supervision and control will be further strengthened as a matter of law enforcement,” Zhang said.
Though more government authorities will be involved, Zhang said the filing procedures will not have any direct impact . However, the local government authorities may issue their own policies or implementation rules.
There are also possibilities that the government will further tighten the rules.
The Circular became effective on July 1 2008.