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Learn more about Land Lease Agreement in China

A Land Lease Agreement is a legally binding contract that grants a tenant the right to use a piece of land for a specified period in exchange for rent. This agreement is essential for businesses, investors, and individuals leasing land for commercial, industrial, agricultural, or residential purposes. In China, land lease agreements are particularly important due to land ownership laws, where the state or collectives retain ownership while granting leasehold rights. At Themis Partner, we provide a comprehensive Land Lease Agreement template, fully compliant with Chinese regulations. Our template is easy to edit in Word format and includes a certified translation in both English and Mandarin for seamless use. Download now to secure your lease agreement with confidence.

📄  Related documents

Leasehold contractResidential lease agreementCommercial lease agreementEviction notice letter
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Table of contents

  1. What is a Land Lease Agreement in China?
  2. What is included in this Land Lease Agreement?
  3. How long can a Land Lease Agreement last in China?
  4. Can a Land Lease Agreement be renewed or transferred?
  5. Can a foreign company sign a Lease Agreement in China?
  6. What restrictions apply to industrial land leases in China?
  7. Does a Land Lease Agreement need to be registered?
  8. What are the tax implications of a Land Lease Contract?
  9. How can a Land Lease Agreement be terminated in China?

What is a Land Lease Agreement in China?

A Land Lease Agreement in China is a formal contract in which a landlord, often the state or a collective entity, grants a tenant the right to use a specific parcel of land for a predetermined period. The agreement establishes the rights and responsibilities of both parties, including lease duration, rent payments, land usage regulations, tax obligations, and termination clauses. If you are looking to rent out residential property in China, you can refer to our Lease Agreement.

Leasing land is the only legal way for businesses and individuals to acquire land-use rights in China. Whether for residential, commercial, or industrial purposes, the agreement ensures compliance with Chinese property laws. It also provides legal protection for both the landlord and tenant, preventing unauthorized use or disputes over land rights. For official regulations, visit the Ministry of Natural Resources of China.

What is included in this Land Lease Agreement?

A Land Lease Agreement in China includes several essential clauses that define the terms and conditions of the lease.

➤ Land to be leased: The agreement specifies the location of the land, including the address and title deed details. It defines the size and permitted use of the land, which could be for commercial, agricultural, or industrial purposes. The tenant must comply with Chinese zoning and land-use laws, ensuring that the land is used for legally permitted activities.
➤ Lease duration: The lease term is clearly defined, specifying the start and end dates. Renewal options depend on mutual agreement between the landlord and tenant. If the lease is renewed, the new agreement must be registered with the Chinese Land Administration Bureau within 30 days.
➤ Payments: Rent is payable in Chinese Yuan (CNY) and is usually due monthly on an agreed date. Late payments incur penalty fees in accordance with Chinese contract law. The first payment is typically due upon signing the agreement.
➤ Security Deposit: A refundable security deposit, usually equal to two months’ rent, is required to cover potential damages or unpaid dues. The deposit is returned within 30 days after lease termination, following any necessary deductions. If damages exceed the deposit amount, the tenant is responsible for covering the additional costs.
➤ Term and Conditions: The tenant must obtain written consent from the landlord before making any alterations to the land, installing equipment, or constructing buildings. Any modifications must comply with Chinese safety and environmental regulations. At the end of the lease, the tenant may be required to restore the land to its original condition if requested by the landlord.
➤ Taxes: The tenant is responsible for paying land-use taxes and other related fees, which may be treated as additional rent. Tax obligations are governed by Chinese taxation laws and must be settled promptly to avoid legal consequences.
➤ Transfer of lease: The lease cannot be assigned, sublet, or transferred to another party without the landlord’s prior written consent. Unauthorized transfers may result in lease termination and legal action under Chinese property laws.
➤ Breach of contract: If either party fails to fulfill their obligations, the defaulting party may receive a notice to remedy the breach. If the issue is not resolved within the specified timeframe, the other party has the right to terminate the lease and seek compensation as per Chinese Contract Law
➤ Termination:The landlord has the right to terminate the lease if the tenant fails to pay rent, uses the land for unauthorized purposes, or violates other terms of the agreement. In such cases, the landlord may forfeit the security deposit and seek further compensation for losses incurred.
➤ Governing Law and Juridictions:The agreement is governed by Chinese law, and any disputes are resolved through arbitration or within the jurisdiction of Chinese courts.

How long can a Land Lease Agreement last in China?

The lease duration depends on the intended use of the land. Below is a breakdown of lease term limits:

Land Use Type Maximum Lease Duration
Residential 70 years
Commercial 40 years
Industrial 50 years
Agricultural 50 years

If the lease term expires, tenants must apply for renewal with the Chinese Land Administration Bureau. The government has the right to approve or deny renewals, depending on land-use policies.

Can a Land Lease Agreement be renewed or transferred?

1. Lease Reneval

Lease renewal is possible but requires mutual agreement between the landlord and tenant. The renewal process must be completed with the Chinese Land Administration Bureau to ensure the extended lease remains legally valid.

ℹ️ Learn more about our Lease Amendment now to easily update rental terms and maintain a clear, legally binding agreement with your tenants.

2. Lease Transfer & Subleasing

If a tenant wishes to transfer or sublet the land, written approval from the landlord is necessary. Unauthorized transfers are considered violations of Chinese property laws and may result in lease termination.

ℹ️ Learn more about our Consent to Sublease Letter to authorize the tenant to sublease.

Can a foreign company sign a Lease Agreement in China?

Foreign companies are permitted to lease land in China, but they must do so through a Wholly Foreign-Owned Enterprise (WFOE) or a Joint Venture (JV). Direct land ownership is not allowed, so foreign investors must operate through a registered business entity in China to obtain lease rights.

ℹ️ Learn more about our Joint Venture Agreement to be permitted to lease land.

Large-scale industrial land leases often require government approval, particularly for projects in key economic sectors. For foreign investment regulations, refer to China’s Ministry of Commerce (MOFCOM)

What restrictions apply to industrial land leases in China?

1. Zoning and Land-Use Requirements

Industrial land leases are subject to strict regulations, ensuring that the land is used exclusively for industrial purposes.

ℹ️ Learn more about our Commercial Lease Agreement now to effectively outline rental terms, protect your business interests, and ensure a legally binding contract with your tenants.

2. Environmental Compliance

The tenant must comply with environmental, safety, and zoning laws, and industrial projects must align with China’s economic and sustainability goals.

  • Remarks:

If the land is used for purposes other than those specified in the lease, the agreement may be terminated, and fines may be imposed.

Does a Land Lease Agreement need to be registered?

Yes, registration is mandatory to ensure the lease is legally recognized. The lease must be registered with the Chinese Land Administration Bureau, and failure to do so may result in disputes, penalties, or eviction. Proper registration guarantees that both parties are protected under Chinese land-use laws and helps prevent fraudulent claims.

What are the tax implications of a Land Lease Contract?

1. Taxes Paid by the Tenant

Tax Type Rate
Value-Added Tax (VAT) 9% on rental payments
Stamp Duty 0.1% of total lease amount
Land-Use Tax Varies by region

2. Taxes Paid by the Landlord

Landlords may also be subject to property taxes, which they may pass on to tenants as additional costs. Tenants should refer to China’s State Tax Administration for the latest rates.

What are the tax implications of a Land Lease Contract in China?

1. Taxes Paid by the Tenant

Termination of a Land Lease Agreement in China can occur when the lease term expires, both parties agree to terminate, or one party breaches the contract. Common reasons for termination include non-payment of rent, unauthorized land use, and failure to comply with environmental or zoning laws. If the tenant does not vacate the land upon termination, the landlord may take legal action to enforce eviction.

Income category Authorized deduction
Salaries and wages 50%
Income from goodwill 50%
Interest income No deduction

2. Taxes Paid by the Landlord?

Landlords may also be subject to property taxes, which they may pass on to tenants as additional costs. Tenants should refer to China’s State Taxe Administration for the latest rates.

How can a Land Lease Agreement be terminated in China?

1. Legal Grounds for Termination

A Land Lease Agreement in China is crucial for ensuring legal compliance and protecting both parties’ interests. Given China’s unique land ownership system, a well-drafted agreement is essential for securing land-use rights and avoiding potential legal issues.

With clear terms on lease duration, payments, taxes, and renewal options, a properly structured agreement helps prevent disputes and ensures business continuity.

For peace of mind and legal protection, download our Land Lease Agreement template, fully compliant with Chinese regulations and easy to customize.

2. What Happens Upon Termination?

Upon termination, the tenant must clear any outstanding payments, and the security deposit will be refunded after deductions for damages or unpaid dues. If disputes arise, they are typically settled through arbitration or in a Chinese court.

Conclusion: Why Commercial Lease Agreements Matter in China

A Land Lease Agreement in China is crucial for ensuring legal compliance and protecting both parties’ interests. Given China’s unique land ownership system, a well-drafted agreement is essential for securing land-use rights and avoiding potential legal issues.

With clear terms on lease duration, payments, taxes, and renewal options, a properly structured agreement helps prevent disputes and ensures business continuity.

For peace of mind and legal protection, download our Land Lease Agreement template, fully compliant with Chinese regulations and easy to customize.

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