Foreign businessmen interested in the construction field in China
should know that this industry is showing positive prospects; investors who want to expand their business activities in China
must be familiar with the construction legislation
, which establishes the conditions in which a construction site
may carry out its activities. Our law firm in China
can offer you assistance for the registration of a company in the field of constructions
and can provide you with an in-depth presentation on the local business environment.
Parties involved in a Chinese construction project
Entrepreneurs who want to establish a company in China in the field of constructions
should know that the Chinese legislation
stipulates that the following entities are to be involved in a construction project:
- project management company;
- project supervising agency, representing the interest of the developer;
- subcontractors, hired by the developer to supply various materials.
Legal entities in the construction field
It is advisable to establish a special purpose vehicle (SPV) if the investors have sufficient financial capital; this method is usually preferred by most of the developers who conduct construction projects in the real estate industry.
In the situation in which the developer does not own the necessary capital for the project, he or she can incorporate a company as follows, by including in the project other investors:
• joint venture;
• joint development;
contractual agreements, signed between the developer and the builder; our Chinese lawyers
can provide you with the conditions under which entities can be formed.
Risks of the contractor in China
Any type of construction projects
will assume several risks before the commencement of the construction
itself. As such, the risks that can be projected in this situation have to be drafted in the contracts
signed between the parties involved, specifying the way in which the parties assume liabilities for various aspects of the project, such as the increase in the cost of the materials used, or the increase in the labor costs.
If you need further information on the Construction Law in China
, please contact our Chinese lawyers
for assistance or legal representation in this sense.