Top Biz News
New rules for foreign house sales agreed
By Zi Ben (China Daily)
Updated: 2006-07-18 09:01
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Foreign-funded property firms investing more than US$10 million will need to hold registered capital equal to no less than 50 per cent the value of the investment potentially a huge hurdle for firms investing tens of millions of dollars.
The measure is aimed at preventing those who do not have adequate capital from speculating in the market.
"If a foreign-funded property firm did not have adequate money to invest in the property market, it used to borrow money from Chinese commercial banks, which in turn transferred the risk to domestic banks," Xu said.
"With the measure setting such high entrance standards, domestic banks are protected from these potential risks," he said.
Xu added that the public should not take it as a restriction on foreign capital's entrance to the property market.
According to the rule, investors with registered capital of under 35 per cent of the total value of a project, or who failed to obtain a land-use certificate, will not be allowed to borrow from domestic or foreign lenders.
Transfers of projects or stakes in foreign-funded property firms, and their acquisitions of domestic property companies, will need approval from the government.