What the Law Says
In China, neither domestic companies nor Foreign Invested Enterprises may own land outright; instead they own Land Use Rights. There are two kinds of Land Use Rights Allocated and Granted. In comparison with Western common law concepts, Allocated Land Use Rights are in some way similar to leaseholds, and Granted Land Use Rights are in some ways similar to life estates.
Allocated Land Use Rights are generally provided by the government for an indefinite period (usually to state-owned entities) and cannot be pledged, mortgaged, leased, or transferred by the user. Furthermore, Allocated land can be reclaimed by the government at any time.
Granted Land Use Rights are provided by the government in exchange for a grant fee, and carry the rights to pledge, mortgage, lease, and transfer within the term of the grant. Land is granted for a fixed term generally 70 years for residential use, 50 years for industrial use, and 40 years for commercial and other use. The term is renewable in theory (although no foreign investor has been in China long enough to find out how this works in practice). Unlike the usual case in Western nations, Granted land...
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