Six government ministries, include the Ministry of Commerce and Ministry of Construction, have drafted and signed a new policy to impose new regulations on non-Chinese or foreign investors to enter Mainland property market, sources said to China Business News. The new policy will practice “naming system” to foreign firms or individuals, restricting their access, developing and operating in real estate sector.   Sources say that only foreign firms with branches or representative offices in China and foreign workers or students have been staying in China for more than one year can fit the requirement to buy Mainland property as their purchases are based on “practical needs”. The notion of “practical needs” would be supported and further explained with detailed terms and conditions from relevant official agencies.   Professor Dong Fan, Chief of Real Estate Research Centre at Beijing Normal University, commented that the policy can prevent joint efforts on individual or corporate levels to raise property prices and bubbles in the sector.   A property investment consultancy firm told China Business News that with the restrictions of naming system and the requirement to have license, registration and proof upon purchase, foreign investment in property sector needs to go through complex procedures. At the same time, State Administration of Foreign Exchange needs to approve the profit resulted from property transfer before the capital can leave the territory.   Foreign real estate developers and operators need to obtain a foreign investment firm license from the Ministry of Commerce and an operating license from the State Administration of Industry or Commerce. This adds another gate before foreign firms can directly invest in the market.   Another gatekeeper on property development is to restrict foreign firms receiving loan or financing from banks before receiving specific licenses or if the total investment does not amount to more than 35% of the project. Professor Dong comments that this is to prevent bubbles in capital market and relieve the tension of bank loan.   A foreign real estate fund management firm pointed out that the policy affects the national enterprises seeking shortcuts in real estate development. It is common that some Mainland enterprises want to obtain and develop the land by establishing a company outside the territory and purchasing the land under this “company”. The new policy imposes fatal restrictions on these enterprises with limited capital resources.