Decree No. 114 was issued at the same time as Decree No. 113. Whilst Decree No. 113 regulates foreign contractors in the project construction area, Decree No. 114 regulates foreign enterprises performing construction project design and engineering activities.
Like Decree No. 113, Decree No. 114 allows for immediate establishment of foreign-invested establishment of design and engineering entities in the form of present. EJVs, CJVs and WFOEs. However, although the establishment of WFOEs is technically permitted under Decree No. 114, given that the Implementing Rules for Decree No. 114 WFOEs are not in place, the authorities have not yet to be created in this area falls due five years accepted and processed any applications for the after China's WTO accession, at the end of establishment of Decree No. 114 WFOEs.
As with Decree No. 113 entities, Decree No. 114 requires that a Decree No. 114 entity must, after establishment, apply for a design or engineering qualification certificate. A Decree No. 114 entity must comply with the same requirements as apply to local PRC design/engineering companies. However, the registered capital requirement for a Decree No. 114 entity is much more modest than that of a Decree No. 113.
Another attractive feature of a Decree No.114 entity is with appropriate qualification, it can undertake Engineering, Procurement and Construction projects in China. One issue holding back the formation of Decree No.114 entity foreign contractors cannot submit application for the establishment of Decree No.114 WFOE at present.
