From August 27th 2015, the time when foreigners had to fulfil strict requirements to buy a property in China is over… at least for a while! This decision of the Central Government is anattempt to keep capital in the country.

Actually this decision comes after the real estate golden age in China: since late 2013, rents are not any more rising and property prices remain stable if not decrease,due to excess supply in both residential and commercial properties. Besidesforeigner investors are also concerned about theChinese currency fluctuation and government actionsto strengthen it.

Will this decision boost the foreign investments in real estate propertiesin China? Real Estate experts don’t think so.

Rules for foreign property investment before 27th August 2015 (and since 2006)

1. to have worked (under Z visa) or studied in China for one year or more (individuals) OR to have operated in China for one year or more (foreign-invested companies).
2. foreigners could only acquire one property in China – at least in Beijing, Shanghai, Shenzhen
3. foreigners could only purchase property forpersonal use: foreign individuals couldn’t rent their property and foreign companies couldn’t make anycommercial use of it.
4. for companies needing to apply for a loan (either domestic or overseas) in order topurchase real estate in China, they required to have paid up their registered capital entirely; andto invest in projects over USD ten million, foreign-invested real estate companies were required to have a paid-up registered capital equal to at least fifty percent (50%) of their total investment.

New rules for foreign property investment from August 27th 2015

1. foreign investors (individuals and companies) are now allowed to buy real estate properties regardless of how long they spent or carried on business in PRC;
2. Local housing purchase limit set for the area: foreigners can buy as many properties as they want in some regions (not applicable to Shanghai and Beijing as far as we know: only 1 property).
3. Use: only for own use (no renting)
4. Loan relaxation: companies applying for a real-estate loanare no longer required to have entirely paid-up their registered capital;
5. foreign investors are no longer required to pay registration fees when applying for domestic and foreign loans to finance property investment in the country, or when settling foreign exchange transactions.
6. foreign-invested real estate companies are required to have a registered capital representing 40% of their total investment for projects of between USD ten million and USD thirty million, and 30% of their total investment for projects over USD thirty million.

SCOUT Real Estate can find for you the right property for your real estate investment in China.

Sources:

http://usa.chinadaily.com.cn/2015-08/28/content_21730694.htm

http://www.cnbc.com/2015/09/01/reuters-america-yuan-concerns-mar-chinas-efforts-to-woo-foreign-property-investors.html

http://www.realtytoday.com/articles/30946/20150831/china-eases-property-investment-rules-foreigners-help-boost-economy.htm

http://uk.reuters.com/article/2015/09/01/uk-china-economy-property-idUKKCN0R14R720150901

https://www.bisnow.com/national/news/commercial-real-estate/china-relaxes-foreign-real-estate-regulations-49483