Notice of the Authority of Qianhai of the Shenzhen Municipality on Issuing the Several Provisions of the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone on the Transfer of Land-use Rights by Bidding, Auction and Listing (for Trial Implementation)

· Area of Law： Land

· Level of Authority： Local Regulatory Documents

· Date issued：05-19-2016

· Effective Date：05-19-2016

· Status： Effective

· Issuing Authority： Other Institutions of Shenzhen City

Notice of the Authority of Qianhai of the Shenzhen Municipality on Issuing the Several Provisions of the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone on the Transfer of Land-use Rights by Bidding, Auction and Listing (for Trial Implementation)
All relevant entities:
The Several Provisions of the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone on the Transfer of Land-use Rights by Bidding, Auction and Listing (for Trial Implementation) has been approved by the municipal government and is hereby issued to you for your implementation
Annex: Several Provisions of the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone on the Transfer of Land-use Rights by Bidding, Auction and Listing (for Trial Implementation)
Authority of Qianhai of the Shenzhen Municipality
May 19, 2016
Several Provisions of the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone on the Transfer of Land-use Rights by Bidding, Auction and Listing (for Trial Implementation)
Article 1(Legislative bases and purposes) With a view to strengthening the administration over the transfer of land-use rights by bidding, auction and listing in the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone (hereinafter referred to as the "Qianhai Cooperation Zone"), and standardizing land development and construction activities by transferring land-use rights through bidding, auction and listing, these Provisions are formulated pursuant to the Regulations of the Shenzhen Special Economic Zone on the Transfer of Land-use Rights, the Provisions on the Transfer of the Right to Use State-owned Construction Land by Bidding, Auction and Listing (Order No. 39 of the Ministry of Land and Resources), the Several Provisions of Shenzhen Municipality on the Transfer of the Right to Use Industrial and Other Production Land (Order No. 193 of the People's Government of Shenzhen Municipality), the Interim Measures for the Administrative Bureau of the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone (Order No. 232 of the People's Government of Shenzhen Municipality) and other relevant regulations and rules, and in light of the realities of the Qianhai Cooperation Zone.
Article 2(Work principles) It is imperative to adhere to the direction of socialist market economic reforms, transfer land-use rights by bidding, auction and listing in the Qianhai Cooperation Zone in a demand-oriented and development-led manner, uphold the principles of openness, fairness, impartiality and good faith, always practice resource-saving, intensive and sustainable development, and highlight headquarters economy, industrial development and Shenzhen-Hong Kong cooperation, so that the market play a decisive role in the allocation of resources and the government better play its role.
Article 3(Scope of application) These Provisions shall apply to the transfer of land-use rights by bidding, auction and listing in the Qianhai Cooperation Zone.
Land-use rights shall be transferred by bidding, auction, listing or other means under any of the following circumstances: where the land pieces involved are commercial land pieces, land pieces for commodity residential properties or other for-profit land pieces; where the land pieces involved are those for cultural, educational, sports, health or other purposes that are not invested with fiscal funds; or, where the same land piece attracts two or more interested land users.
Article 4(Administrative departments) The Administrative Bureau of the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone (hereinafter referred to as the "Qianhai Administrative Bureau") shall, according to the authorization granted by the municipal government, conduct unified and centralized administration over the transfer of land-use rights by bidding, auction and listing in the Qianhai Cooperation Zone.
The Contract on the Transfer of Land-use Rights in the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone (hereinafter referred to as the "Transfer Contract") and the Agreement on the Regulation of Industrial Development in the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone (hereinafter referred to as the "Industrial Development Agreement") shall be entered into by and between the Qianhai Administrative Bureau and land users.
Article 5(Recent plan) The Qianhai Administrative Bureau shall, under the overall development planning, comprehensive planning, unit planning and special planning of the Qianhai Cooperation Zone, as well as the development requirements of the modern service industry, make overall coordination of industrial development and urban construction, and take into account both recent construction activities and long-term development priorities, to prepare a recent construction and land utilization plan for the Qianhai Cooperation Zone to specify the scale, structure, layout and sequence of land supply, and implement the said plan after reporting the same to the municipal government for approval.
Article 6(Annual plans) The Qianhai Administrative Bureau shall, according to the recent construction and land utilization plan for the Qianhai Cooperation Zone, work with the departments concerned to prepare annual plans for land transfer by bidding, auction and listing, list the land pieces included therein separately in the land supply plan of Shenzhen Municipality, give priority to specifying the quotas of land pieces planned to be transferred by bidding, auction and listing in a given year, the locations of such land blocks, market entry conditions for relevant industries, etc., and implement such annual plans after reporting the same to the municipal government for approval.
Article 7(Strengthening market regulation) The Qianhai Administrative Bureau shall adapt to the requirements of the development and construction of the Qianhai Cooperation Zone and the requirements of industrial development, and make integrated use of a variety of market-oriented means of regulation to strictly control speculative demand, guide rational investment demand, and effectively guarantee the demand for land and space by projects of headquarters economy, industrial projects and Shenzhen-Hong Kong cooperation projects that are in line with the industrial development directions of the Qianhai Cooperation Zone.
The Qianhai Administrative Bureau shall standardize land transfer conditions, fine-tune the forms of land transfer and price auction rules, and prevent vicious competition from causing high land prices, high building prices and high rentals, so as to promote healthy industrial development.
The Qianhai Administrative Bureau shall detail the reasonable demands of industrial projects, strictly control the scale of such projects, simplify market entry thresholds, and refrain from setting restrictive conditions that affect fairness and impartiality or exclude market competition.
Article 8(Differentiated forms of land transfer) Land pieces for any of the following purposes may be transferred by listing: those to be used for financial projects, modern logistics projects, projects of information services, projects of science and technology services, projects of other professional services, and other industrial projects; those specifically transferred to Hong Kong enterprises; those otherwise subject to industrial development requirements; and, those that are not invested by fiscal funds and on which public welfare requirements or quasi-public welfare requirements are imposed. Land pieces that have not been subject to any industrial development requirements shall be transferred by auction, bidding, etc. on a priority basis.
It is encouraged that enterprises with strong development capabilities and abundant development experience be entrusted as agents to develop and construct the land pieces used by industrial projects to improve construction quality.
Article 9(Differentiated conditions for property sales) The land pieces used by a financial project, modern logistics project, project of information services, project of science and technology services, project of other professional services or an industrial project of other types, or the land pieces specifically transferred to a Hong Kong enterprise shall be limited to full owner-occupation for office use purposes for a period of not less than ten years from the date of completion of project land work, and the buildings constructed on such land pieces shall be sold in entirety upon the expiration of the owner-occupation period.
As regards other land pieces not subject to any industrial development requirement, the following scale or percentage may be set according to their respective locations, size, functions, structure, etc.: Office or commercial properties shall only be sold in entirety after construction completion; office or commercial properties shall only be sold on the basis of an entire floor after construction completion; the smallest sales unit of office or commercial properties shall not be less than 500 square meters after construction completion; etc.
Office properties may only be rented or sold to enterprise legal persons or other organizations registered in the Qianhai Cooperation Zone that engage in actual business activities. The Qianhai Administrative Bureau shall, based on market situations and industrial conditions, put forward eligibility requirements on the lessees and buyers of specific land pieces, and include such requirements in land transfer schemes.
Article 10(Land price correction coefficients for restrictions on the minimum sales size) The smallest sales unit of office or commercial properties shall not be less than 500 square meters. Specifically, where sales are limited to the sales of a building cluster, the sales of a constructed building in its entirety or the sales of an entire floor, the land prices assessed by the market shall respectively be corrected at 0.7 times, 0.8 times or 0.9 times.
For the purpose of the preceding Paragraph, "a constructed building in its entirety" shall refer to a stand-alone building whose construction area is not less than 30,000 square meters, while "a building cluster" shall refer to a collection of at least two contiguous buildings that meet the requirements on "a constructed building in its entirety" prescribed by this Paragraph.
Article 11(3D cadastre technologies are encouraged to be adopted to make land administration more refined.) The Qianhai Administrative Bureau shall, in conjunction with relevant departments, establish the "parcel model" concept, widely adopt 3D cadastre technologies, institute land-use rights by distinguishing different circumstances, set up a land space right system, and refine the boundaries, as well as the rights and interests, concerning the rights to use ground land, surface land and underground land.
Article 12(Strictly controlling the division of an entire land parcel and the injection of divided land parcels into different project companies) It is imperative to strictly control the division of entire land parcels and the injection of divided land parcels into different project companies. Where genuinely necessary, the foregoing matters shall be agreed upon in the conditions for, and the announcements on, land transfer by bidding, auction and listing.
In the case of a single neighborhood or multiple neighborhoods that are transferred on the basis of a single land parcel, the land parcel may not be further divided after transfer. In the case of a single neighborhood or multiple neighborhoods that are transferred on the basis of the entirety of multiple land parcels, such land parcels may only be held by one company after transfer.
Article 13(Supporting properties constructed) The Qianhai Administrative Bureau may, according to the location, size, functions, structure, industrial development requirements, etc. of a land piece, raise requirements on the scale and functions of the properties that shall be handed over to the Qianhai Administrative Bureau free of charge after construction of the land piece transferred by bidding, auction or listing is completed.
The Qianhai Administrative Bureau shall raise, and include in a scheme for land transfer by bidding, auction and listing, the construction standards, hand-over sequences and other requirements on the properties that shall be handed over to the Qianhai Administrative Bureau free of charge after construction of the specific land piece is completed.
Article 14(Requirements on the transfer of land pieces for cultural, educational, sports or health purposes that are not invested by fiscal funds) The Qianhai Administrative Bureau shall, in conjunction with relevant departments, raise public welfare requirements or quasi-public welfare requirements on land pieces for cultural, educational, sports, health or other purposes that are not invested by fiscal funds.
Land pieces for cultural, educational, sports, health or other purposes that are not invested by fiscal funds shall only be transferred in their entirety on a full-year basis. In addition, the eligibility of the transferees to, and the conditions for, such re-transfer shall not be less stringent than relevant requirements on land transfer by bidding, auction and listing.
Article 15(Standardizing the payment methods for land prices) Where the bid winner or auction winner is a domestic enterprise, the bid winner or auction winner shall immediately sign the Transfer Contract after winning the relevant deal, and pay off the land price in one lump-sum within five working days upon the signing of the Transfer Contract.
Where the bid winner or auction winner is an overseas enterprise, the bid winner or auction winner shall complete the lawful registration and establishment of a project company and other relevant procedures within three month after winning the relevant deal, sign the Transfer Contract, and pay off the land price in one lump-sum within five working days upon the signing of the Transfer Contract.
Article 16(Developing a database for industrial land-use projects) The Qianhai Administrative Bureau shall, based on the needs of industrial development and in light of the demands of specific projects, develop a database for industrial land-use projects to specify the industrial development requirements, land and space demand (including size, layout, structure, etc.), supply sequences, etc. for projects of headquarters economy and industrial projects within the Qianhai Cooperation Zone.
Article 17(Strictly controlling the market entry of land use by industrial projects) The Qianhai Administrative Bureau shall, in conjunction with relevant departments, rationally determine the demand for land and space by industrial projects.
The Qianhai Administrative Bureau shall commence separate studies to formulate the criteria for recognizing projects of headquarters economy and industrial projects included in the database for industrial land-use projects whose demands genuinely need to be satisfied by land transfer by reference to the Notice of the People's Government of Shenzhen Municipality on Printing and Distributing the "Interim Measures of Shenzhen Municipality for Encouraging the Development of Headquarters Enterprises" (Shen Fu [2012] No. 104) and the standards on the scale of land and office use by the aforesaid projects by reference to the Notice of the General Office of the People's Government of Shenzhen Municipality on Printing and Distributing the "Administrative Measures of Shenzhen Municipality for the Allocation of Land and Space for Corporate Headquarters (for Trial Implementation)" (Shen Fu Ban [2009] No. 86), and adopt the formulated criteria and standards after reporting the same to the municipal government for approval.
Projects of headquarters economy and industrial projects that all satisfy the relevant conditions may jointly bid for industrial land pieces.
Article 18(Establishing relevant systems such as due diligence investigation) The real and reasonable demand for land and space by projects of headquarters economy and industrial projects in the Qianhai Cooperation Zone shall be rigorously reviewed by due diligence, expert evaluation and other means.
Article 19(Preparing schemes for land transfer by bidding, auction and listing, and submitting the same to the municipal government for approval) The Qianhai Administrative Bureau shall, according to the annual plans for land transfer and land market conditions, select the locations of land pieces for transfer by bidding, auction and listing, determine the designed planning indicators, raise industrial market entry conditions, etc. in batches to form schemes for land transfer by bidding, auction and listing, and submit the same to the municipal government for approval.
Article 20(The Qianhai Administrative Bureau shall carry out relevant work after approval by the municipal government.) After a scheme for land transfer by bidding, auction and listing is approved by the municipal government, the Qianhai Administrative Bureau shall prepare the announcement on land transfer by bidding, auction and listing and the Transfer Contract, entrust relevant entities to prepare the parcel map and assess market land prices, and determine matters concerning land prices for land transfer by bidding, auction and listing based on the results of the assessed land prices.
Article 21(Publishing announcements) The Qianhai Administrative Bureau shall entrust the Shenzhen Land and Real Estate Exchange Center to publish an announcement on land transfer by bidding, auction and listing for a period of not less than 20 days. Where intended for overseas markets, such an announcement may be published via foreign media for a period of not less than 30 days.
Article 22(Qualification review) The Qianhai Administrative Bureau shall review the bids or auction applications received during the announcement period. Where an applicant satisfies the required conditions upon review, the Qianhai Administrative Bureau shall confirm the applicant's eligibility for submitting bids or participating in auction, and notify the applicant to participate in activities of land transfer by bidding, auction and listing.
Article 23(Winning deals) The Qianhai Administrative Bureau shall, in accordance with relevant provisions, organize activities of land transfer by bidding, auction and listing, determine the bid winner or the auction winner, send thereto the Notice of Award or the Transaction Confirmation, and enter into the Industrial Development Agreement or the Transfer Contract with the bid winner or the auction winner.
Article 24(No change to the conditions for land transfer by bidding, auction and listing) A holder of land-use rights shall speed up development and construction strictly in accordance with the conditions, schedules and planning agreed under the relevant Transfer Contract or the relevant Industrial Development Agreement, and shall not change the conditions for land transfer without authorization.
Article 25(Strengthening regulation) The Qianhai Administrative Bureau shall reinforce the awareness of laws and regulations, establish the concept of rule of law, tighten market entry requirements, and standardize operations.
The Qianhai Administrative Bureau shall establish and improve monitoring and regulatory mechanisms, fine-tune and standardize the Transfer Contract and the Industrial Development Agreement, and strengthen regulation in terms of contract performance with due diligence, development and construction, industrial development, etc. after land transfer.
Article 26(Preemptive right of repurchase) The Qianhai Administrative Bureau may, according to market developments and industrial demand, promptly make enterprises or projects with poor operating conditions exit the market, and their properties may be repurchased by the Qianhai Administrative Bureau on a priority basis under equal conditions. The Qianhai Administrative Bureau may also exercise the preemptive right of repurchase under equal conditions with regard to market properties that are planned to be transferred by transferors.
Article 27(Circumstances under which land piece shall be taken back) The Qianhai Administrative Bureau may take back land pieces through negotiation, arbitration, litigation or other means according to contractual agreements under any of the following circumstances: where the party concerned fails to perform the responsibilities and obligations to develop and construct land pieces or develop the relevant industry in accordance with the relevant Transfer Contract or the relevant Industrial Development Agreement; or, where there are land hoarding, land speculation or other acts.
Article 28(Investigation of liabilities) During the process of land transfer by bidding, auction and listing, relevant entities or individuals that violate pertinent provisions, and divulge base prices (reserve prices), the profiles of bidders or auction participants or other contents that shall be kept confidential shall bear corresponding civil liabilities and administrative liabilities pursuant to the law, and shall be referred to judicial organs for handling pursuant to the law if they are suspected of committing criminal offenses.
Article 29(Effective date of trial implementation and validity) These Provisions shall come into effect on a trial basis on the date of printing and distribution, and shall be valid for a trial implementation period of two years. In the event of any discrepancy between these Provisions and relevant documents of the Qianhai Cooperation Zone prior to the trial implementation hereof, these Provisions shall prevail. The agreements, if any, otherwise reached on land pieces for which transactions have been closed prior to the trial implementation hereof shall prevail.