The law says

In China, more domestic companies and foreign investors
Companies can fully own land, but they have land use
Rights. There are two types of rights to the land use – and allocated
was added. Compared with Western notions of law,
Assigning rights to use land in a similar manner
Granted leases and land use rights are somehow
Similar to the states of life.

Assign rights to the land use is usually provided by the
Government for an indefinite period (usually state
Persons) and cannot be rented, mortgaged, leased or
transmitted by the user. In addition, the country can be assigned
recovered by the government at any time.

Granted rights of land use will be made available by the Government
to provide for a fee and meet the pledges,
Mortgage, lease and transfer within the period of the grant.
The land is granted for a specified period – usually 70 years for
Residential use, industrial use for 50 years and 40 years for
commercial and other utilization. Be renewable in theory
(Although no foreign investor in China was long enough to
how it works in practice). Unlike the usual case
Western nations, land grants are used for each
Purpose for which it is given.

Assign land use rights are granted in converted land
Charges in the payment of a fee for the issue to the government.
Also granted the rights of land use are subject to expropriation by
the Government in unusual circumstances (in exchange for
similar to the just compensation in eminent domain power
USA). This fact plays for the work
foreign investor – land granted to companies with foreign participation
expropriated is rare, but agricultural land is often
expropriated to make way for foreign investment
Projects.

How the law applies to companies with foreign participation

Most of the foreign invested joint ventures, to obtain land use rights
the Chinese side. A common problem is that the Chinese
Party owns the rights to the land use for the land it
holds (on the lookout for that, if China is a
Governmental unit). In this case transferred to the Authority
Human land use is in the local land administration transferred
Bureau and the Chinese have no right
Transfer to the joint venture.

However, if the joint venture may include long-term purchase contracts
Granted rights of land use by the Bureau of Land Administration
Thanks to a grant of land use contract, the joint venture will then
be able to mortgage the land or the transfer to a third party.
Remember, however, should that vacant land be expanded by 25%
can be purchased on granted land use rights. Do not attempt to
Agreement to acquire the rights of land use, if you do not intend to
develop in a short time, because even if the country
granted qualified than 25% and, therefore, developed a grant, it
can still be classified as “free”, and gaps between buildings can be
be recovered if the development is not started within two years
to transfer.

A second option would be one of the investors to obtain
Granted land use rights and the leasing of the Joint Commission
Venture. However, undeveloped land is leased to third parties
(As a joint venture or other enterprise with foreign capital)
by the recipient. It is also interesting to notice that the lease must
register in order to protect themselves against rent
Potential for competing claims.

Third, if you are willing to pay for the use of land affected
Rights of the company with foreign capital may simply
Land assigned to it by the Board of Directors of the local country.

In the case of a joint venture, a fourth option would be to
the Chinese side have set the land use rights granted
the joint venture as part of its contribution in the
would in this case the Chinese for the annual property tax
the use of fees.

Another common problem is that the land and building (s) on the
they are held by different parties, avoiding possible confusion
legal situation where not all parties are willing to cooperate.

Above all, it would be a good idea to require
China the status of land use rights with show
Evidence before the application for approval of projects.
Should further due diligence prior to transmission includes an extensive review
the environmental impacts of the Self-Assessment (see glossary for
more details). Finally, keep in mind that the payment and the transfer of
‘Title’ with the public record with the Earth
Administration Office can not take place simultaneously -
the registration of land transfers are not permitted when a
Receipt of payment will be sent with the transfer of the registration
Application.

David Carnes is licensed to practice law in California. He speaks and reads Mandarin Chinese and has several years experience working with Chinese companies and Chinese-American joint ventures. On his website, import of China [http://importfromchina.blogspot.com].

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