If you want to be a successful real estate investor in China the most important thing you must take care of is to acquire local legal representation before even starting the search for property to match specific investment needs, and also to access the help of a licensed real estate agent.
The Chinese government has enacted seemingly conflicting laws controlling the resale of immovable property and land as well as the development of land and property and these laws and regulations are applicable to everything ranging from the possible environmental aftereffect of the sale to limiting the sale to Chinese citizens only.
Based on the particular city or area in China that an investor is looking for his property purchase there may be certain constraints attached to the amount and type of property available to be bought. The Chinese government triggered a successful and highly influential property boom when they permitted for the freehold ownership of property in China back in the 1990s and this has lead to them being pushed to strengthen all aspects of their control regarding China's property market.
They have performed this with an aim to limit furious growth and to encourage sustainability within the real estate market, but it does imply that rules keep altering and an investor should be alive to the developments in China before committing to a specific city or region incase a government's up gradation of laws could decrease or limit the possible profitability of an investment.
An example of how the government's strengthening of grip on the real estate market has already backfired on some property investors is understood when you learn that it is impossible to flip properties anymore bought off plan upon their finishing and benefit from interim price gains because of a fresh high rate capital gains tax that affects those hard who resell properties inside a couple of years of ownership.
All parties or their delegates reach the Realty Transaction Department for the completion of the transaction, final monies are handed over, taxes are due as are legal and agency fees and once the property handing over document has been signed the keys are in effect transferred to the property investor.
In Sept 2001, China enforced Foreign Invested Leasing Companies Regulations, which illustrates regulatory prerequisites for leasing companies with foreign investment. Concerning financial leasing companies, the total fortunes of the Chinese joint venture partner must not be below RMB 400 million in the year preceding the application.
The total fortunes of the foreign joint venture partner must not be below US$ 400 million in the year preceding the application. It must also possess at least five years of financial leasing experience. The official capital of a financial leasing company may not be below US$ 20 million. The capital contribution of the Chinese joint venture partner must not be below 20% of the official capital. The term of operation must not go past 30 years.
Regarding other leasing companies, the total fortunes of the Chinese joint venture partner must not be below RMB 100 million in the year preceding the application. The total fortunes of the foreign joint venture partner must not be below US$ 50 million in the year preceding the application. It must also possess at least three years of leasing experience.
The official capital must not be below US$ 5 million. The capital contribution of the Chinese joint venture partner must not be below 20% of the official capital. The term of operation must not go past 20 years. As shown earlier, the capital prerequisites are lesser for operating leasing companies compared to financial leasing companies. Always remember that if you are not thorough with the laws and regulations regarding buying and leasing you are asking for trouble.
Back from summer break, I begin a fresh season of employment law blogging with a new edition of my Real Pleadings feature involving an explosive case working its way through the Ontario courts.
Diane LaCalamita v. McCarthy Tetrault is a lawsuit by a female lawyer at McCarthy’s, one of Canada’s big Bay Street firms. The lawsuit [...]
A while ago, I did a post discussing an attempt by Microsoft to recover money it claimed it mistakenly ‘overpaid’ employees when they were fired. I noted that if the amount paid is in the range of what the common law ‘reasonable notice’ would provide, I couldn’t see any reason why the employee would have [...]
There was a story in the New York Times over the weekend that describes how a company named Regis Corp. has asked its employees to sign a document stating that the employees ‘revoke’ any union membership card they have signed or may sign in the future. Regis Corp is that company that runs low end [...]
Last week I noted an interesting case out of Ontario called Stowar v. Telehop. That’s the case in which the HR Manager made an error in the termination letter, offering 5 months’ pay instead of the ESA minimum of 3 weeks’ pay. When the employer noticed its mistake, it refused to pay the 5 month’s notice, [...]
In May 2, 2007, China officially banned the trade in human organs, China's state media reported. The Asian giant is often accused of heavily involving in the harvesting human organs of executed prisoners for organ transplant surgeries.
Is harvesting human organs for transplant in this way ethical? After all, lives are being saved from such transplant surgeries. Well, the debate on this subject matter by various interest and human right groups is ongoing and yet to be settled.
The new law and regulations issued by the State Council, China's powerful cabinet prohibit all organizations and individuals from trading in human organs in any form, the official state media, Xinhua news agency reported.
National security checks that have held up U.S. and other foreign purchases of Chinese businesses became law on Thursday. The anti-monopoly law marks the first time demands for such reviews have been enshrined in China's legal system, bringing together various rules and guidelines enacted as early as 2002. It takes effect August, 2008.
If imitation is indeed the sincerest form of flattery, then the Chinese can be very sincere flatterers indeed. But if you prefer prosperity over flattery it would be wise to take precautions against losing your shirt (or at least the rights to it) in one of the world's most dangerous IP jungles. It isn't that the legal regime is deficient - it's enforcement that's lacking. For the present at least, China is a net importer of intellectual property. A relatively lawless IP environment is advantageous to China's short-term interests, just as a strictly enforced IP environment suits the interests of net IP exporters such as the United States. This issue has been constant irritant in relations between China and Western nations, as well as Japan. Nevertheless, China's enforcement of intellectual property has steadily improved in recent years.
Protecting intellectual property (IP) in China requires a multi-pronged strategy including registration, workplace security, employee contracts, commercial contracts and enforcement.
If you want to be a successful real estate investor in China the most important thing you must take care of is to acquire local legal representation before even starting the search for property to match specific investment needs, and also to access the help of a licensed real estate agent.
The Chinese government has enacted seemingly conflicting laws controlling the resale of immovable property and land as well as the development of land and property and these laws and regulations are applicable to everything ranging from the possible environmental aftereffect of the sale to limiting the sale to Chinese citizens only.
A few decades ago there was hardly any such field as international law – only domestic law representing clients with funny sounding names. Although that situation has changed, the globe is not yet as borderless as the media would have us believe it is. Nevertheless, US lawyers are heading to China in increasing numbers to practice "cutting edge" foreign investment law, and many of these adventurers are fresh out of law school. Conventional wisdom has it that heading overseas straight out of law school will ruin your career back home should you ever want to relocate stateside.
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