· Document Number：Order No. 7 of the Shanghai Municipal People's Government

· Area of Law： Land

· Level of Authority： Local Government Rules

· Date issued：05-28-2018

· Effective Date：05-28-2018

· Issuing Authority： People's Government of Shanghai Municipality

· Status： Effective

Measures of Shanghai Municipality for the Administration of the Land Use by Foreign-funded Enterprises
(Issued by Order No. 29 of the Shanghai Municipal People's Government on June 21, 1996, amended and reissued in accordance with the Decision of the Shanghai Municipal People's Government to Amend 19 Government Rules Including the Measures of Shanghai Municipality for Plant Quarantine which came into force on April 1, 2002, amended and reissued in accordance with the Decision of the Shanghai Municipal People's Government to Amend 148 Municipal Government Rules Including the Interim Provisions on Farm Machinery Accidents in Shanghai Municipality issued by Order No. 52 of the Shanghai Municipal People's Government on December 20, 2010, and amended and reissued in accordance with the Decision of the Shanghai Municipal People's Government to Amend the Measures of Shanghai Municipality for the Administration of the Land Use by Foreign-funded Enterprises issued by Order No. 7 of the Shanghai Municipal People's Government on May 28, 2018)
Article 1 (Purposes and Bases)
For purposes of strengthening the administration of the land use by foreign-funded enterprises, and improving the system of paid use of land in this Municipality, these Measures are developed in accordance with the Regulation on the Implementation of the Law of the People's Republic of China on Chinese-Foreign Equity Joint Ventures, the Detailed Rules for the Implementation of the Law of the People's Republic of China on Chinese-Foreign Contractual Joint Ventures, the Detailed Rules for the Implementation of the Law of the People's Republic of China on Wholly Foreign-Owned Enterprises, the Measures of Shanghai Municipality for Implementing the Land Administration Law of the People's Republic of China and other laws and regulations and in consideration of the actual circumstances of this Municipality.
Article 2 (Scope of Application)
These Measures shall apply to the administration of the use of state-owned land or collectively-owned land by foreign-funded enterprises within the scope of this Municipality, except the case that foreign-funded enterprises use the state-owned land whose use right is obtained through land assignment.
Article 3 (Administrative Departments)
The Shanghai Municipal Planning and Land and Resources Administration (hereinafter referred to as the “Municipal Planning and Land and Resources Administration”) is the administrative department of the land use by foreign-funded enterprises in this Municipality.
The land administrative departments of districts shall, in accordance with these Measures and the relevant provisions on the administration of construction land in this Municipality, take charge of the specific administration of the land use by foreign-funded enterprises within their respective jurisdictions.
Article 4 (Ways of Land Use)
A foreign-funded enterprise may obtain a land use right by the following means, except the case that it shall obtain the right to use state-owned land by assignment according to the law:
(1) The people's government at or above the county level expropriates collectively-owned land or appropriates the right to use state-owned land.
(2) The Chinese party to a Chinese-foreign equity joint venture converts the right to use state-owned land or collectively-owned land into shares.
(3) The Chinese partner to a Chinese-foreign contractual joint venture takes the right to use state-owned land or collectively-owned land as a condition for cooperation.
(4) The foreign-funded enterprise obtains the ownership of the house of a state-owned enterprise or a collectively-owned enterprise by trade or other means of transfer according to the law, and then obtains the right to use the land occupied by the house.
(5) Other means as prescribed by laws and regulations.
Foreign-funded enterprises may use land by leasing houses and sites.
Article 5 (Restrictions on Use of Collectively-Owned Land)
Under any of the following circumstances, collectively-owned land shall be expropriated in accordance with the relevant provisions on the administration of construction land in this Municipality:
(1) In the formation of a Chinese-foreign equity joint venture or a Chinese-foreign contractual joint venture, a rural collective economic organization and a foreign-funded enterprise use the collectively-owned land which has been covered by the urbanization planning of this Municipality.
(2) A foreign-funded enterprise obtains the ownership of a house on a collectively-owned land by trade or other means of transfer according to the law, and then obtains the right to use the land occupied by the house.
The shares of a rural collective economic organization in a Chinese-foreign equity joint venture formed by it with a foreign investor, which are converted from the right to use the collectively-owned land which is not covered by the urbanization planning of this Municipality, shall not be transferred.
Article 6 (Evaluation of Prices of the Land Use Rights)
Under any of the following circumstances, a real estate appraisal agency with the corresponding qualification shall evaluate the price of a land use right:
(1) The Chinese party to a Chinese-foreign equity joint venture converts the right to use state-owned land or collectively-owned land into shares.
(2) The Chinese party to a Chinese-foreign contractual joint venture takes the right to use state-owned land or collectively-owned land as a condition for cooperation.
Article 7 (Land Use Application and Approval)
Except under the circumstance of leasing of houses or sites, the foreign investor of or the Chinese party or Chinese partner to a foreign-funded enterprise that needs to use the state-owned land or collectively-owned land in this Municipality shall, upon the strength of the project approval document and the construction land planning permit, apply to the land administrative department for land use in accordance with the relevant provisions of this Municipality on the administration of construction land.
Where land use is approved upon examination, the people's government at or above the county level shall issue the certificate of approval of construction land use to the applicant.
Article 8 (Verification of Land Use Fees)
A foreign-funded enterprise approved to use land upon examination shall, within 30 days from the date of receipt of the Business License for an Enterprise Legal Person, undergo the formalities for land use right registration with the real estate registration institution, and undergo the formalities for verification of payment of land use fees under the following provisions:
(1) Where state-owned land is used, registration shall be made with the Municipal Planning and Land and Resources Administration, and where the land is within the scope of Pudong New Area, registration shall be made with the land administrative department of Pudong New Area.
(2) Where collectively-owned land is used, registration shall be made with the land administrative department of the district at the place where it is located.
Article 9 (Determination of Obligated Payers of Land Use Fees)
A foreign-funded enterprise approved to use land upon examination shall pay land use fees to the land administrative department that handles the formalities for verification of payment of land use fees. Where the Chinese party to a Chinese-foreign equity joint venture converts the right to use state-owned land or collectively-owned land into shares, the Chinese party shall pay land use fees; and as for a Chinese-foreign contractual joint venture, the payer as stipulated in the cooperation contract may pay such fees.
Article 10 (Starting Date for the Payment of Land Use Fees)
The starting date for the payment of land use fees by a foreign-invested enterprise that has been approved to use land upon examination shall be the date when the enterprise obtains the Business License for an Enterprise Legal Person.
A foreign-funded enterprise that has used a land for less than six months in the year of its initial use of the land may be exempt from land use fees; or shall pay the fees of six months if it has used the land for more than six months in that year.
Article 11 (Time Limit for the Payment of Land Use Fees)
Land use fees shall be paid in two installments each year:
(1) The payment in the first installment shall be made before June 30.
(2) The payment in second installment should be made before December 31.
Article 12 (Rates of Land Use Fees)
The rates of land use fees shall be determined by classification and grading according to the planned nature of land use and the geographic environment conditions.
As for the rates of land use fees and the adjustments thereto, the Municipal Planning and Land and Resources Administration shall propose plans in conjunction with the price, public finance and other departments of Shanghai Municipality and in light of actual circumstances, and implement them after they are submitted to the Municipal People's Government and approved.
The interval for adjustments to rates of land use fees shall be not less than three years, and the range of each adjustment shall not exceed 30% of the original rate.
Article 13 (Application of Rates of Land Use Fees)
A foreign-funded enterprise may, within the five years after its initial use of land, pay land use fees at the rate for the first year; and, from the sixth year, pay land use fees at the rate for the current year.
Under any of the following circumstances, a foreign-funded enterprise may, during the entire period of operation, pay land use fees at the rate for the first year of its initial use of land:
(1) The Chinese party to a Chinese-foreign equity joint venture converts the right to use state-owned land or collectively-owned land into shares.
(2) The Chinese partner to a Chinese-foreign contractual joint venture takes the right to use state-owned land or collectively-owned land as a condition for cooperation, and it is stipulated in the cooperation contract that the Chinese partner should pay land use fees.
Article 14 (Land Use Fees for Two Types of Enterprises)
A technologically advanced foreign-funded enterprise outside the downtown areas of this Municipality shall be exempt from land use fees within three years from the date of its formation, and pay such fees from the fourth year at the preferential rate, except under the circumstances as listed in paragraph 2 of Article 13 of these Measures.
Where a technologically advanced foreign-funded enterprise outside the downtown areas of this Municipality fails to pass the annual assessment or the relevant confirmation certificate is suspended according to the law, it shall make up for the land use fees in arrears in the current year at the rate for general foreign-funded enterprises.
The specific scope of downtown areas of this Municipality shall be delimited by the Municipal Planning and Land and Resources Administration in conjunction with relevant departments and be implemented after being reported to the Municipal People's Government and being approved.
Article 15 (Other Circumstances that the Payment of Land Use Fees May Be Deferred, Reduced or Exempt)
Upon verification by the land administrative department as prescribed in Article 8 of these Measures, a foreign-funded enterprise may, before starting operation or production, pay 50% of the land use fees payable, except under the circumstances as listed in paragraph 2 of Article 13 of these Measures.
Under any of the following circumstances, the payment of land use fees made by a foreign-funded enterprise may be deferred, reduced or exempt:
(1) It has difficulty in paying land use fees due to force majeure, and has obtained approval from the land administrative department as prescribed in Article 8 of these Measures in conjunction with the public finance department at the same level.
(2) It uses land for urban infrastructure construction upon approval by the Municipal People's Government.
(3) Other circumstances as prescribed by the Municipal People's Government.
Article 16 (Requirements for Land Use)
Foreign-funded enterprises that have been approved to use land upon examination shall comply with the relevant provisions of land administration laws, regulations and rules, and may not trade or illegally transfer in other forms land use rights.
Article 17 (Changes of Land Use)
Where a foreign-funded enterprise needs to change the planned nature or the area of the land used during its operation, it shall report to the planning administrative department or land administrative department that originally grants approval for approval. Where the relevant change is approved upon examination, it shall undergo the registration formalities for the change of the land use right with the real estate registration institution, and undergo anew the verification formalities for payment of land use fees in accordance with the provisions of Article 8 of these Measures.
Article 18 (Termination of Land Use)
Where a foreign-funded enterprise terminates the use of land due to the expiration of the operation period or for any other reason, it shall, upon the strength of the certification document of the administrative department for industry and commerce or other relevant certification documents, undergo the land use right registration cancellation formalities with the real estate registration institution, and, based on the period for land use in the current year (it is calculated as one month if the land use time is less than one month), pay land use fees to the land administrative department as prescribed in Article 8 of these Measures.
Article 19 (Use of Land Use Fees)
A land administrative department shall, in accordance with relevant provisions, turn in the land use fees collected to the public finance department at the same level, and use such fees exclusively for the urban and rural infrastructure construction in this Municipality.
Article 20 (Punishment on Illegal Land Use)
Where a foreign-funded enterprise uses the land without approval or illegally transfers the land use right, the land administrative department shall impose punishment on it in accordance with the relevant provisions on the administration of construction land.
Where a foreign-funded enterprise changes the planned nature of the land used without approval, the planning administrative department shall impose punishment on it in accordance with the relevant regulations and rules.
Article 21 (Handling of Failures to Pay Land Use Fees on Schedule)
Where a payer of land use fees fails to pay land use fees on schedule, the land administrative department shall order it to pay such fees within a prescribed time limit, and shall impose a late payment penalty of 3‰ of the overdue payment per day from the date when the payment is due.
Article 22 (Reconsideration and Litigation)
Against a specific administrative act conducted by a planning and land administration department, a party may apply for administrative reconsideration or file an administrative lawsuit in accordance with the Administrative Reconsideration Law of the People's Republic of China or the Administrative Litigation Law of the People's Republic of China.
Where a party neither applies for reconsideration or files a lawsuit within the statutory time limit nor performs a specific administrative act, the department that conducts the specific administrative act may, in accordance with the provisions of the Administrative Litigation Law of the People's Republic of China, apply to the people's court for enforcement according to the law.
Article 23 (Application by Reference)
The use of state-owned land or collectively-owned land by the following enterprises within the scope of this Municipality shall be administered by reference to the provisions of these Measures:
(1) Enterprises formed by investors from Hong Kong, Macao and Taiwan regions.
(2) The joint stock limited companies to which the laws and regulations on foreign-funded enterprises apply.
Article 24 (Meaning of Land Use Fees)
For the purpose of these Measures, “land use fees” exclude expenses for requisition, demolition and resettlement and expenses for infrastructure construction.
Article 25 (Department Responsible for Interpretation of Application Issues)
The power to interpret the specific issues concerning the application of these Measures shall remain with the Municipal Planning and Land and Resources Administration.
Article 26 (Effective Date and Matter Concerning Repeal)
These Measures shall come into force on July 1, 1996, upon which the Measures of Shanghai Municipality for the Administration of the Land Use by Chinese-Foreign Equity Joint Ventures issued by the Shanghai Municipal People's Government on October 30, 1986 shall be repealed.