Regulations Governing Construction and Engineering Design Enterprises
with Foreign Investment the People's Republic of China

Decree No.114 issued by Ministry of Construction and the Ministry of Foreign Trade and Economic Cooperation Regulations Governing Construction and Engineering Design Enterprises with Foreign Investment has been passed at the 63rd Standing Committee meeting of Ministry of Construction on 9th Sep,2002 and the 10th Ministers’ Meeting of the Ministry of Foreign Trade and Economic Cooperation on 17th Sep, 2002, and now issued and shall come into force as of the date of 1st Dec, 2002. Wang Guangtao Minister of the Ministry of Construction Shi Guangsheng Minister of the Ministry of Foreign Trade and Economic Cooperation 27th Sep, 2002 Regulations Governing Construction and Engineering Design Enterprises with Foreign Investment

Article 1 In order to expand the opening to the outside, uniform the governing over the Foreign Investment Building and Engineering Design Enterprises, this regulation is stipulated according to the Law of the People’s Republic of China on Construction, Law of the People’s Republic of China on Sino-foreign Joint Equity Enterprises and the Law of People’s Republic of China on Sino-foreign Contractual Joint Ventures, Law of People’s Republic of China on Wholly Foreign Owned Enterprises, Regulations Governing the Quality of Building and Engineering and Regulations Governing the Prospect and Design of Building and engineering and other Laws and Regulations.

Article 2 This regulation is applicable to establishing Foreign Investment Building and Engineering Design Enterprises, applying for the qualification of engineering and design enterprises and implementing the governing over the Foreign Investment Building and Engineering Design Enterprises within the border of People’s Republic of China. The Foreign Investment Building and Engineering Design Enterprises in this regulation refer to the wholly foreign owned building and engineering design enterprises, Sino-foreign Joint Equity building and engineering design enterprises and Sino-foreign contractual building and engineering design joint ventures according to the laws and regulations of the People’s Republic of China within the boarder of P.R. China.

Article 3 To establish Foreign Investment Building and Engineering Design Enterprises and engage in building and engineering design activities, foreign investors shall get the Approval Certificate for Foreign Investment Enterprises issued by the competent department of Foreign Trade and Economic authority, register with the State Administration for industry and commerce or its authorized local administrative authority for industry and commerce, and get the qualification certificate for building and engineering design issued by the competent department of Construction authority.

Article 4 To conduct building and engineering design activities within the boarder of P.R. China, Foreign Investment Building and Engineering Design Enterprises shall comply with the laws, rules and regulations of China. The lawful business operations and interests of the Foreign Investment Building and Engineering Design Enterprises within the boarder of P.R. China will be protected by the laws, rules and regulations of China.

Article 5 The competent department of the Ministry of Foreign Trade and Economic Cooperation is responsible for governing the establishment of the Foreign Investment Building and Engineering Design Enterprises. The competent department of the Ministry of Construction is responsible for governing the qualification of the Foreign Investment Building and Engineering Design Enterprises. The competent department of Foreign Trade and Economic Cooperation authority in provinces, autonomous regions and municipalities is responsible for governing the establishment of the Foreign Investment Building and Engineering Design Enterprises within the empowered scope. The competent department of construction authority in provinces, autonomous regions and municipalities is responsible for governing the qualification of the Foreign Investment Building and Engineering Design Enterprises within the administrative region.

Article 6 The application and approval of Foreign Investment Building and Engineering Design Enterprises is administrated by different grade and classification. To the Foreign Investment Building and Engineering Design Enterprises that apply for construction and engineering design class A qualification or other building and engineering design class A or B qualification, the establishment is approved by the competent department of the Ministry of Foreign Trade and Economic Cooperation and the qualification is approved by competent department of the Ministry of Construction. To the Foreign Investment Building and Engineering Design Enterprises that apply for construction and engineering design class B qualification or other building and engineering design class C or lower qualification, the establishment is approved by the competent department of Foreign Trade and Economic Cooperation authority in provinces, autonomous regions and municipalities, and qualification by competent department of construction authority in provinces, autonomous regions and municipalities.

Article 7 The procedures for the Foreign Investment Building and Engineering Design Enterprises to apply for construction and engineering design class A qualification or other building and engineering design class A or B qualification: (1) The applicant put forward the application to the competent department of Foreign Trade and Economic Cooperation authority in provinces, autonomous regions and municipalities where the enterprises plan to establish. (2) The competent department of Foreign Trade and Economic Cooperation authority in provinces, autonomous regions and municipalities will complete the preliminary examination within 30 days upon the receipt of the application, and report to the competent department of Ministry of Foreign Trade and Economic Cooperation if approved. (3) The competent department of Ministry of Foreign Trade and Economic Cooperation shall deliver the preliminary examination material to the competent department of the Ministry of Construction for advices. The competent department of the Ministry of Construction shall give the advices within 30 days upon the receipt of the Advices Inquiry Letter. The competent department of Ministry of Foreign Trade and Economic Cooperation shall make decision in written form within 30 days on receipt of the advices from the competent department of the Ministry of Construction. For which is approved, the Approval Certificate of the Foreign Investment Company will be released, while for disapproved, the applicant will be given explanation in written form. (4) After getting the Approval Certificate of the Foreign Investment Company, the applicant shall register with the relative administrative authority. (5) After getting the business license, the applicants who plan to apply for qualification of building and engineering design should follow the regulation governing the qualification of the building and engineering design enterprises.

Article 8 The establishment of the Foreign Investment Building and Engineering Design Enterprises to apply for construction and engineering design class B qualification or other building and engineering design class C or lower qualification, the competent department of Construction and Foreign Trade and Economic Cooperation authority in provinces, autonomous regions and municipalities can execute according to the Article 7 in this regulation and the regulation governing the qualification of the building and engineering design enterprises, and combined actual situation of the own region. The Foreign Investment Building and Engineering Design Enterprises approved by the competent department of Construction authority in provinces, autonomous regions and municipalities shall file with the competent department of Ministry of Construction within 30 days upon the receipt of the approval.

Article 9 To apply for upgrading the qualification class or increasing other building and engineering design enterprises qualification, the Foreign Investment Building and Engineering Design Enterprises shall follow the related procedures with the competent department of the Construction authority according to relative regulations.

Article 10 The company who apply to establish Foreign Investment Building and Engineering Design Enterprises shall provide the following materials to the competent department of Foreign Trade and Economic Cooperation authority: (1) The application form of establishing Foreign Investment Building and Engineering Design Enterprises signed by the Legal person of the investor; (2) The feasibility report compiled or approved by the investor; (3) The contract and articles of association of the Foreign Investment Building and Engineering Design Enterprises signed by the Legal person of the investor (only articles of association for the wholly Foreign owned Investment Building and Engineering Design Enterprises); (4) The Pre-examination Notice of the Enterprise Name; (5) The registration certificate issued from the country or region where the investor operates building and engineering design enterprises, and the bank credit; (6) The letter of authorization and testimonial of the chairman of the board, board members, managers and responsible technical personnel planned to dispatch by the investor; (7) The balance sheet and statement of loss and interest of investor issued by the publicized accountant or accounting firm for recent three consecutive years.

Article 11 The company who apply to qualification of Foreign Investment Building and Engineering Design Enterprises shall provide the following materials to the competent department of construction authority: (1) The application for the qualification of Foreign Investment Building and Engineering Design Enterprises; (2) The Approval Certificate for the foreign investment company; (3) Business license of the company; (4) The registration certificate issued from the country or region where the investor operates building and engineering design enterprises, and the bank credit; (5) The individual vocational certificate of the country or region the foreign service provider locate and the building and engineering design achievements and prestige certificate of the individual, and enterprises issued by the competent department of the authority in the country or region the investor locate or by the institutions, associations or notaries office; (6) Other requirement required by the regulation governing the qualification of the building and engineering design enterprises.

Article 12 The material that the applicant is required to provide in this regulation shall be in Chinese. If the origin of the testimony is in foreign language, a Chinese translation should be provided.

Article 13 The foreign investor of the Foreign Investment Building and Engineering Design Enterprises and the foreign service provider shall be the enterprises that engage in the building and engineering design in the country or region where the investor locates, or publicized architect, engineer.

Article 14 The Chinese party shall contribute no less than 20% in the Sino-foreign Joint Equity building and engineering design enterprises and Sino-foreign contractual building and engineering design joint ventures

Article 15 To apply for the qualification of building and engineering design, the Foreign Investment Building and Engineering Design Enterprises shall comply with the required conditions on the qualification criterion of building and engineering design enterprises. In case the Wholly Foreign Owned Building and Engineering Design Enterprises apply for the qualification of building and engineering design enterprises, the numbers of the foreign service provider who get the qualification of publicized architect and engineer should be no less than one forth of the total vocational personnel numbers required by qualification classification standard, the numbers of the foreign service provider who has the relative design experience should be no less than one forth of the total main technical personnel numbers required by qualification classification standard. In case the Sino-foreign Joint Equity building and engineering design enterprises and Sino-foreign contractual building and engineering design joint ventures apply for the qualification of building and engineering design enterprises, the numbers of foreign service provider who get the qualification of publicized architect and engineer should be no less than one eighth of the total vocational personnel numbers required by qualification classification standard, the numbers of the foreign service provider who has the relative design experience should be no less than one eighth of the total main technical personnel numbers required by qualification classification standard.

Article 16 In the Foreign Investment Building and Engineering Design Enterprises, the publicized architect, engineer and the main technical personnel of the foreign service provider should stay within the boarder of P. R. China accumulatively no less than 6 months every year.

Article 17 In case the Foreign Investment Building and Engineering Design Enterprises violate the Law of he People's Republic of China on Construction, Regulations Governing the Quality of Building and Engineering and Regulations Governing the Prospect and Design of Building and engineering and other Laws and Regulations in the process of building and engineering design, it will be disposed according to the relative Chinese Laws and Regulations.

Article 18 Investors from Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan, who plan to establish Foreign Investment Building and Engineering Design Enterprises and engage in the building and engineering design activities in other provinces, autonomous regions and municipalities, shall refer to the Regulation.

Article 19 The time to accept the application of establishing Foreign Investment Building and Engineering Design Enterprises is decided by the competent department of the Ministry of Construction and the Ministry of Foreign Trade and Economic Cooperation.

Article 20 The competent department of the Ministry of Construction and the Ministry of Foreign Trade and Economic Cooperation are responsible for the interpretation of this Regulation according to their respective responsibilities.

Article 21 This regulation shall come into force as the date of 1st Dec, 2002, meanwhile, the Regulations Governing the Examination and Approval of the Establishment of Sino-foreign Engineering Design Institutes (Construction [1992] No.180) shall be cancelled.

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