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TABLE OF CONTENTS CHAPTER I GENERAL PRINCIPLES CHAPTER II APPLICATION AND EXAMINATION AND APPROVAL OF AN ENTERPRISE'S ESTABLISHMENT AND QUALIFICATIONS CHAPTER III THE SCOPE OF THE PROJECTS TO BE CONTRACTED CHAPTER IV SUPERVISION AND ADMINISTRATION CHAPTER V SUPPLEMENTARY PROVISIONS CHAPTER I GENERAL PRINCIPLES Article 1. In order to open wider to the outside world and normalize the administration of foreign-funded construction enterprises, the present Rules have been formulated on the basis of laws and administrative regulations including the Construction Law of the People's Republic of China, the Law of the Republic of China on Bid Invitation and Tenders for Bid, the Law of the People's Republic of China on Sino-foreign Equity Joint Ventures, the Law of the People's Republic of China on Sino-foreign Contractual Joint Ventures, the Law of the People's Republic of China on Foreign-funded Enterprises and the Regulation on the Quality Administration of Construction Projects. Article 2. These present rules shall be applicable to the foreign-funded construction enterprises established within the territory of the People's Republic of China in their application for the qualifications of construction enterprise and to the supervisory administration of foreign-funded construction enterprises. The term "foreign-funded construction enterprise" refers to a solely foreign-funded construction enterprise or a sino-foreign equity joint construction enterprise or a sino-foreign contractual joint construction enterprise established within the territory of the People's Republic of China according to the statutory provisions of China. Article 3. To establish a foreign-funded construction enterprise and engage in the construction activities within the territory of the People's Republic of China, a foreign investor shall obtain an approval certificate of foreign-funded enterprises issued by the administrative department of foreign trade and economic cooperation by lawful means, file registration with the State Administration for Industry and Commerce or the competent local administration for industry and commerce authorized thereby, and obtain a qualifications certificate of construction enterprises issued by the administrative department of construction. Article 4. A foreign-funded construction enterprise that engages in the construction activities within the territory of the People's Republic of China shall abide by the laws, regulations and ministerial rules of China. The lawful business operations and lawful rights and interests of foreign-funded construction enterprises shall be subject to the protection of the laws, regulations and ministerial rules of China. Article 5. The administrative department of foreign trade and economic cooperation under the State Council shall be responsible for the administration of the establishment of foreign-funded construction enterprises. The administrative department of construction under the State Council shall be responsible for the administration of the qualifications of foreign-funded construction enterprises. The administrative department of the foreign trade and economic cooperation of the people's government of the provinces, autonomous regions shall be responsible for the administration of foreign-funded construction enterprises within the scope of authorization. The administrative department of construction under the people's government of the provinces, autonomous regions and municipalities directly under the Central Government shall be responsible for the administration of qualifications of foreign-funded construction enterprises within their respective administrative jurisdictions. CHAPTER II APPLICATION AND EXAMINATION AND APPROVAL OF AN ENTERPRISE'S ESTABLISHMENT AND QUALIFICATIONS Article 6. The application and examination and approval of a foreign-funded construction enterprise's establishment and qualifications shall be subject to level-to-level and categorized management. For foreign-funded construction companies with Levels A-1 and A qualifications of a general contractor of construction and Level A qualifications of professional contractor, the application for establishment shall be approved by the foreign trade and economic cooperation administration departments of the State Council and that for qualifications shall be approved by administrative departments of construction of the State Council. For foreign funded construction companies with other levels, the application for establishment shall be approved by he foreign trade and economic cooperation administration departments of provinces, autonomous regions or municipalities directly under the Central People's Government and that for qualification shall be approved by administrative departments of construction of provinces, autonomous regions or municipalities directly under the Central People's Government. For Sino-foreign jointly owned construction companies or Sino-foreign jointly operated construction companies, if the Sino investors are centrally-state-owned enterprises, the application of establishment shall be approved by the foreign trade and economic cooperation administration departments of the State Council and that for qualifications shall be approved by administrative departments of construction of the State Council. Article 7. The procedures for foreign-funded construction enterprises to apply for the Levels A-1 and A qualifications of a general contractor of construction and Level A qualifications of professional contractor are: (1) The applicant files an application to the administrative department of foreign trade and economic cooperation of the people's government of the province, autonomous region or municipality directly under the Central Government where the enterprise is to be situated; (2) The administrative department of foreign trade and economic cooperation of the people's government of the province, autonomous region or municipality directly under the Central Government shall, within 30 days as of accepting the application, complete the preliminary examination and, if approval is granted after preliminary examination, report to the administrative department of foreign trade and economic cooperation of the State Council; (3) The administrative department of foreign trade and economic cooperation of the State Council shall, within 10 days as of receiving the preliminary examination materials, send the application materials to the administrative department of construction of the State Council to seek opinions. The administrative department of construction of the State Council shall, within 30 days as of receiving the letter of seeking opinions, give its opinions, and the administrative department of foreign trade and economic cooperation of the State Council shall, within 30 days as of receiving the written opinions of the administrative department of construction of the State Council, decide in written form whether to approve or not to approve. If approval is to be granted, it shall issue a certificate of approval to the foreign-funded enterprise. If approval is not to be granted, it shall give an explanation in written form; (4) The foreign-funded enterprise that has obtained a certificate of approval shall file registration with the competent organ of enterprise registration within 30 days; and (5) After obtaining a legal person enterprise business license and to apply for the qualifications of a construction enterprise, it shall follow the provisions concerning the qualifications administration of construction enterprises. Article 8. The procedures for foreign-funded construction enterprises to apply for the Level B qualifications and the qualifications on lower levels of a general contractor of construction and of a professional contractor of construction as well as the qualifications of a labor sub-contractor shall be enforced by the administrative department of construction and the administrative department of foreign trade and economic cooperation of the people's government of the provinces, autonomous regions and municipalities directly under the Central Government by reference of Article 7 of the present Rules and the provisions concerning the qualifications administration of construction enterprises and by taking the practical situation of the local places into consideration. The administrative department of construction and the administrative department of foreign trade and economic cooperation of the people's government of the provinces, autonomous regions and municipalities directly under the Central Government shall report to the administrative departments of construction of the State Council within 30 days since the approval. Article 9. Where a foreign-funded construction enterprise applies for promoting to a higher level of qualifications or adding any new qualification other than its principal business, it shall go through relevant procedures provided by the administrative department in charge of construction. Article 10. Any one who applies for establishing a foreign-funded construction enterprise shall sub the following materials to the administrative department in charge of foreign trade and economic cooperation: (1) An application for establishing a foreign-funded construction enterprise attached with the signature of the legal representative of the investor; (2) A feasibility study report work out or acknowledged by the investor; (3) Contracts and the articles of incorporation for establishing a foreign-funded enterprise attached with the signature of the legal person of the investor (in particular, only the articles of incorporation are needed for the establishment of a solely foreign-funded construction enterprise); (4) Notice of advance approval of the name of the enterprise; (5) Certificate of legal person registration and certificate of the bank credit standing of the investor; (6) Appointment documents and identity documents of the chairman of the board of directors, members of the board of directors, managers, persons in charge of engineering and techniques to be appointed by the investor; and (7) Balance sheets and statements of gains and losses of the investor within the recent three years that have been audited by certified accountants or accounting firms. Article 11. To apply for the qualifications of a foreign-funded construction enterprise, the applicant shall submit to the following materials to the administrative department in charge of construction: (1) Application Forms for the Qualifications of a foreign-funded construction enterprise; (2) Certificate of approval of a foreign-funded enterprise; (3) The business license of the legal person enterprise; (4) The bank credit standing of the investor; (5) The appointment documents and identity documents of the chairman of the board of directors, members of the board of directors, the persons in charge of the finance, business operation, engineering and techniques of the enterprise, to be appointed by the investor; (6) The balance sheets and statements of gains and losses of the investor during the recent three years that have been audited by certified accountants or accounting firms; and (7) Other materials required by the provisions concerning the qualifications of construction enterprises. Article 12. The total investment of the Chinese party to a sino-foreign equity joint construction enterprise, sino-foreign contractual joint construction enterprise shall not be any lower than 25% of the registered capital. Article 13. The sino-foreign equity joint construction enterprises and sino-foreign contractual joint construction enterprises that have been established prior to the implementation of the present Rules shall apply for verification of their grade of qualifications anew according to the present Rules and other provisions concerning the administration of the qualifications of construction enterprises. Article 14. If any of the materials submitted by the applicant according to the present Rules is in any foreign language, it shall be attached with a Chinese translation. CHAPTER III THE SCOPE OF THE PROJECTS TO BE CONTRACTED Article 15. A foreign-funded construction enterprise is allowed to contract, within its scope of qualifications, the following projects: (1) A project that is to be constructed totally with the investment of a foreign country or the doation of a foreign country or the investment and donation of a foreign country; (2) A project funded by an international financial institution or granted through international bidding according to terms of loan; (3) A joint construction project in which foreign investment occupies 50% or more, and a sino-foreign joint construction enterprise in which foreign investment occupies less than 50% but which cannot be independently implemented by any Chinese construction enterprise due to technical difficulties and has been approved by the administrative department of construction of the people's government of the province, autonomous region or municipality directly under the Central Government; (4) A construction project using Chinese investment but cannot be independently implemented by any Chinese construction enterprise due to technical difficulties and has been approved by the administrative department of construction of the people's government of the province, autonomous region or municipality directly under the Central Government that may be jointed contracted by Chinese and foreign construction enterprises. Article 16. A sino-foreign equity joint construction enterprise or sino-foreign contractual joint construction enterprise shall contract projects within its scope of qualifications grade. CHAPTER IV SUPERVISION AND ADMINISTRATION Article 17. The standard of the qualification grades of foreign-funded construction enterprises shall be the standard of the qualification grades of the construction enterprises that have been promulgated by the administrative department of construction of the State Council. Article 18. A foreign-funded construction enterprise that is the general contractor of a project shall accomplish the construction of the principal parts of the structure of the project by itself. Article 19. Where a foreign-funded construction enterprise contracts a project jointly with any other construction enterprise, the scope of permitted contracting projects shall be determined according to that of the enterprise with the lowest grade of qualifications. Article 20. Any foreign-funded construction enterprise that violates the provisions of Article 15 of the present Rules by contracting projects beyond its scope of business permitted by its qualifications shall be fined not less than 2% but not more than 4% of the contractual value of the project, and may be ordered to suspend business for rectifications or its qualification grade may be degraded. If the circumstances are serious, the qualifications certificate thereof may be canceled. If any illegal gains have been incurred, they shall be confiscated. Article 21. Any foreign-funded construction enterprise that violates any of the statutory provisions including the Construction Law of the People's Republic of China, the Bidding Law of the People's Republic of China, the Regulation on the Quality Administration of Construction Projects, and the Rules for the Qualifications Administration of Construction Enterprises, in its construction activities shall be subject to penalty according relevant provisions. CHAPTER V SUPPLEMENTARY PROVISIONS Article 22. Where a foreign-funded construction enterprise that has obtained a Certificate of Qualifications a Foreign Enterprise for Contracting Projects prior to the implementation of the present Rules applies for establishing a foreign-funded construction enterprise, it may apply for a corresponding grade of qualifications of construction enterprise according to it performances of contracting projects within the territory of the People's Republic of China. Where a foreign enterprise that has already established a foreign-funded construction enterprise within the territory of the People's Republic of China according to the provisions of Paragraph 1 of the present Article applies for establishing a new foreign-funded construction enterprise, the qualifications grade thereof shall be subject to verification according to the provisions concerning the administration of the qualifications of construction enterprises. Article 23. Where any investor form the Hong Kong Special Administrative Region, the Macao Special Administrative Region or Taiwan invests to establish any construction enterprise within any other province, autonomous region or municipality directly under the Central Government and engage in construction activities, the present Rules shall apply by reference unless there are otherwise provisions in any law, regulation or rule of the State Council. Article 24. The power to interpret the present Rules shall remain with the administrative department of construction of the State Council and the administrative department of foreign trade and economic cooperation of the State Council within their respective functions. Article 25. The present Rules shall become effective as of December 1, 2002. Article 26. The Measures for the Qualifications Administration of the Foreign Enterprises That Contract Projects within the Territory of China which was promulgated by the Ministry of Construction on March 22, 1994 (Order No. 32 of the Ministry of Construction) shall be repealed as of October 1, 2003. Article 27. The Some Provisions Concerning the Establishment of Foreign-funded Construction Enterprises which was jointly promulgated by the Ministry of Construction and the Ministry of Foreign Trade and Economic Cooperation (No. 533 [1995] of the Ministry of Construction) shall be repealed as of December 1, 2002. |
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