The Status of Land in China and the importance of due diligence

by Dezan Shira & Associates, Investment Intelligence Unit, Greater China

State land includes mainly construction land in the urban areas, but also a small amount of agricultural land in the rural areas. State land is the main source of industrial and commercial construction land, and if the foreign investor wants to acquire state land, they must obtain the relevant rights granted to them by the local bureau of the Ministry of Land and Resources.Collective land includes land in rural and urban areas that does not belong to the state, mostly agricultural land with some construction land.

Requisition is the main method of converting collective land into state land. If people who are not members of a village collective wish to use collective land, they must first make an application to the government. If this is approved, the government requisitions the collective land and turns it into state land, and then grants the land to the other party for an appropriate fee. If the targeted land is collective agricultural land, provincial level approval is required for the conversion to industrial land.

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This article included in China Briefing Magazine

October 2006: Hot Property - A Guide To Foreign Investment in China's Property Market

Other articles in this issue: Current rules and regulations for foreign investment in real estate by Dezan Shira & Associates, Investment Intelligence Unit, Greater China Minimum Salaries Rise In Tight Labour Markets - China by Dezan Shira & Associates, Investment Intelligence Unit, Greater China Hot Property - A Guide to Foreign Investment in China's Property Market by Cher H. Lim, Head, National Special Projects Advisory, Dezan Shira & Associates Hot Property - A Guide to Foreign Investment in China's Property Market by Fiona Yuan, Manager, Dezan Shira & Associates Hot Property - A Guide to Foreign Investment in China's Property Market by Zoe Zhou, Manager, Guangzhou, Dezan Shira & Associates