The Regulations on the Administration of Foreign Investment in Construction Design Enterprises came into effect on December 1, 2002. These new regulations allow foreign designers to make investment into the PRC construction design market. Such investment can now be made through a wholly foreign-owned enterprise, or more traditionally, through an equity joint venture or contractual joint venture.

While the qualification assessment and approval of foreign-invested design enterprises shall comply with the Chinese unified construction design standards currently in effect, the new Regulations set forth some specific parameters for the qualification of foreigners investing in design enterprises in China. For example, foreign investors and foreign service providers must also engage in construction design services in their home countries or hold architectural or construction engineering licenses in their home countries. If a wholly foreign-owned construction design enterprise applies for a design license, the number of its foreign employees who hold Chinese architecture and engineering licenses shall be not less than one fourth of the total number of its employees licensed in China. For an equity joint venture or contractual joint venture, the number of foreign employees who hold Chinese architectural and engineering licenses shall be no less than one eighth of the total number of its employees licensed in China.

The Regulations have been promulgated by the Chinese government for the purpose of further opening the domestic construction design market to foreigners. This not only brings in new expertise, but it also meets obligations that were set forth under the WTO. The Regulations will not only facilitate the communication between Chinese domestic design professionals and their international counterparts, but it also further identifies the requirements for foreign investors operating in the Chinese construction design market.

─Rose He