Mortgage Problems for Shanghai Property

Posted by msnglnk (151 days ago)

i bought a place out in baoshan (near shanghai u). i signed all the paperwork. gave down payment ect.. now the lender (icbc) refuses to complete the transaction. they say my visa isn't good enough. its an L visa but they say i need to produce a work visa or some other kind of residence permit. i am working and my employer will give me this kind of visa sooner or later. but my lender (icbc) is sayin they will cancel the transaction if i don't show them the kind of visa they want. and they will keep a large percentage of the downpayment as penalty for breaking the contract.

i understand that they want to make sure that i will stick around but they say my passport and saw all the chinese visas i have had and know that i have been heen here for several years and most likely won't leave any time soon.

can they do what they say? i am sure i am not the first xpat to borrow money from a bank in china with a visa other than a residence permit. anyone got any advice for me? can anyone help?

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Posted by mark_larsen2 (150 days ago)

Yes. They can and will do that.
You should NEVER be allowed to buy property with any visa other than Z visa.
Your best shot is either get a Z visa NOW, or lose the whole deal.

I bought a new apartment in Shanghai in 2006, and a Z visa was the first thing they asked me to even let me see the apartments.

It makes sense, just imagine a chinese guy coming to your country trying to buy an apartment with a tourist visa, do you think they will let him have it?

Get the Z visa or lose the money.

Posted by msnglnk (150 days ago)

its bs that they spring this on me after i sign the contracts. they asked to see my passport and made copies ect.. i went to a notary and got everything natarized and legal. but a week or 2 later they (lender) call me and tell me my visa isn't adiquate. they only requested it after examining the copies of my passport and old visa's and noticed i had a Z (res type) visa. then they say that is what is needed. but after i talked to several property owners (pale faces) i learned that i am not the only one who wanted to buy property without a Z visa. all of them bought their properties without a Z visa and still have visa's other than Z.

the bank is hoping to cash in on what they hope to be an "ignorant foriegner".

anyone in the "legal profession" got input?

Posted by msnglnk (149 days ago)

ok lets try this...i am married to a chinese woman. she is already a homeowner but certain laws require her to pay more taxes ect.. if she owns more than one home. so we buy the new home have it in my name in order to get around her paying more taxes. and we even got hitched in h k so the prc won't know of our union. so can i (we) just tell the bank we are married and get around this visa bs and still not let the prc know of our union? meaning can i still own the home and she not have to pay more taxes ect..

Posted by mark_larsen2 (148 days ago)

I asked around. Yes, some banks MAY bypass the Z visa thingy as long as the foreigner has been several years in China. China Construction Bank told me as long as the guy is +1 year in China and they put +40% upfront they would take him. However, this is a case by case deal.
Critical advice. Do NOT play your wife's card in front of the bank. They will get suspicious. You bring your wife and their first question will be "so, why don't put the house to your wife's name?" and you will go "well, we just want to avoid paying taxes" and they will go "so you, foreigner, making 1000 times more than us want to avoid taxes? Oh we will never give you the loan!!!".
I have being in China over 5 years, bought property, the whole deal. Chinese never change their minds once is set, so I strongly advice you to simply comply with them and get the Z visa fixed. OR, if you have being in China +1 years, see if you can put +40% in cash. In my case, besides the Z visa, I coughed 60% upfront. Trust me, it took them less than a day to agree.

Remember all Chinese banks are just one. They share info and you definitely don't want your name to start jumping from bank to bank as "suspicious lao wai".

Good luck.

Posted by tigerbay (148 days ago)

The bank is not trying to rip you off.

ICBC had the worlds biggest ever IPO last year, I don't think they need your deposit.
And lets face it. You are not exactly playing straight yourself, now are you?

They are applying government regulations. And the national property register is I think the only national joined up register there is. So the fact that you and your wife already own property will quickly come to light if you try to use her name.

Go get a Z visa.

Posted by msnglnk (148 days ago)

its not like i am tryin to not get a Z visa. my employer is aware of my need for the visa and how urgent it is. i will get it when i get it. i can't make them give it to me. icbc and the agricultural bank were the only options for lenders given to me. i chose icbc because its the strongest of china's top 4 banking institutions. the ag bank is the weekest. they probably would have let me barrow on my current visa. i wonder if i can change now?

Posted by tigerbay (146 days ago)

If you are working without a Z or Residence visa, and being paid in China, you are (to the best of my knowledge) working illegally.

A new/change of visa only takes 5 days. The old Z visa as such has I believe been phased out for a residence type visa. I am not certain of the new regualtions but there is a goverment website.

There are two main reasons why emplyers do not apply for the proper visa. Firstly it costs more, and some employers don't want to spend the money. The other reason is they are not paying your tax, even if you think they are paying it.

Another good reason for getting the proper visa is that you pay less tax.

Th problem seems to be your employer. Not ICBC. One thing to realise in China is that every agency and even hotels will check your documents. They should (but rarely do) report irregularites. It is on of the ways that China can use to try to control illegal workers, money laundering, etc.

Posted by msnglnk (145 days ago)

yes i know if i just get that all important Z visa everything will be fine. i've been working in shanghai for several years under L F & Z visa's. it just depends who i work for, which visa i'll get. its intresting to here the regs have changed for Z visa's. what exactly has changed? i am sure i still need proof of employment.

back to the property issue. i'd be more than happy to let the gov know i am married and pay the extra tax. but my wife isn't. so what if we produce a "pre nup" or "post nup"? this way we prove my assets are mine and her assets are hers. would that be a possible way to skirt the gov regs?

i am just tryin to find a way for everyone to win.

Posted by tigerbay (144 days ago)

As you may be aware, working on an L visa is illegal.

Working on an F visa is also technically illegal. It is a business visa. Meaning you can come to China to do business, so technically you should be ont eh payroll of a non-Chinese company. So you get a letter of invitation from a Chinese company for you to come and do business for your (foriegn company). That is the way it is supposed to work. But as we know it is often different.

The reason I mention it is this.
Don't try and frig the regualtions. It can come back to haunt you in several ways.
- the bank may withdraw all support and keep the deposit.
- the immigration authorites get involved and because they are notified by a quasi goevernment body (the bank) they will be forced to act.
- the tax authorities may come after you and your wife. And I bet you don't have your tax fapio for the last few years. Without tax fapio you can be detained before being deported. This has happened, especially to Americans.
- if you get tangled up in something when the government is having one of thier periodic purges then they go after you for everything. A colleage of mine was deported when they were having a purge on expats driving unlicensed mortorcycles last year. He also did 10 days jail first.

Try offering to pay for the visa yourself, if your emplyer is too tight fisted to pay the 1400 RMB (old price) + cost of medical if you haven't had one (700 RMB). All you need is a letter from your employer and a copy of the company registration (assuming your employer is registered).

If your employer is legal, there is no procedural reason I can think of for not being able to get the right visa.

Find a new employer if they cannot supprot you on this. Also ask for an extension on the deadline, banks can be very flexible if you are polite. And if you go to see the bank don't allow yourself or your wife to rant at the staff (I see this a lot in Shanghai) I know from the inside that this is always counter productive, unless you really are connected.

Posted by mark_larsen2 (127 days ago)

Very well written, Tigerbay, but just in case there is anything not 100% clear, let me put it in this way:
If you don't have a Z visa, you are not allowed to work. No matter who says what. Simple as that.
Any questions, ask your employer to walk with you to the nearest PSB office.

One more thing, NOT all employers can get you to have a Z visa. Mostly only join ventures and some big chinese companies.

Posted by tigerbay (124 days ago)

Hi Mark

You are right in saying without a Z you are not allowed to work, but this is sometimes disregarded by employers.

I do not see why a registered company that needs an expat employee cannot provide a Z visa. I have worked for 3 small local companies. One was a franchise, the other two independant. All of them provided me with a Z visa, although the franchise did resist (many of the expat staff were without a Z visa).

Posted by mark_larsen2 (119 days ago)

Sorry, maybe I explained wrongly. ONLY business with LEGITIMATE deals overseas (regardless of their size), or MAYOR goverment subsidized (i.e. fully controlled) schools, or joint ventures schools can hire foreigners with Z visas. I guess there may be some special cases somewhere, but trust me that is the trend.

Posted by tigerbay (114 days ago)

Mark
Do you mean F visa (business visa) in your last post?

Posted by msnglnk (114 days ago)

my boss gave me instructions on how to get a resident permit (Z visa). of course it was in chinese and she basically said "deal with it yourself". i am not new to the "visa game" but other employers pretty much did the "leg work" for me in the past.

where do i get the real/understandable info?

Posted by tigerbay (111 days ago)

If you go to the visa office in Pudong on Minsheng Lu and Ying Chun Lu. This is a short walk from the Science Museum Metro.

If you live near there it is worth doing a quick check first as to what is needed. The system in Shanghai seems to be very relaxed in Pudong office and they are very helpful. I think that thier ethos is to expedite as amany applications as possible, and not to vet people for reasons not to give them a visa. (unlike my experience going to the US)

They have all the information in English and Chinese, but it is easier if you go with a Chinese speaker. It takes 5 days and for an extra 20RMB they will send it all back to you by courier, to an address of your choice, employer is usually easiest if there is someone on reception who can sign for it.

If my memeory serves you will need the following,
Passport,
H3 Registration of residence (yellow slip from the police in your district, used to be pink).
A letter from your employer stating you are employed by them. The visa office may need additional information in the letter, your employer should know (maybe not :-))
A copy of your employers company registration.
Passport size photos (not sure how many, I get mine done in 8s) The office also has a photograher on site.
Money, I am not sure on current fee schedule.
Medical Ceritification. There is a special hospital that does all the tests in the HongQiao area. not sure of adress. Cost was 700rmb. Only needs to be done the first time.

Posted by msnglnk (109 days ago)

thanx. but can someone give me a website for the visa info. my boss got the chinese instructions from the web. i am sure there must be a an english version of the website and/or downloadable instructions. i was also wondering if there is a res. permit option for someone who is married to a chinese? i got a 6-month L visa because i married a chinese. before you ask..it was only a 6-month because we got hitched in h k and the psb officer (in shanghai) told me i have to get my marriage cert. notarized in h k if i want a longer visa.

Posted by mark_larsen2 (104 days ago)

tigerbay, I meant Z visa. Working visa.

Posted by msnglnk (103 days ago)

i am finally gonna get the necessary visa but i gues it ain't soon enough for my lender and/or brokerage. one of the two (or both) is threatening to add penalties for a so-called contract breach. one (or both) has contended that their is no contract until i produce the required visa but at the same time they want to penalize me for breaching acontract that doesn't exist. i haven't any real idea of whats goin on because they always talk to my wife even though my name and id credentials are the only ones they have for this so called contract. but i got news for them; i'll sooner let them drag me into court than to get bullied by anyone no matter how powerful they believe they are. but really the only choices they have is to terminate the contract and give me back my money. if they want to play the contract game than i will also bring to light that clause in the contract.

anybody, got legal contacts to give me? i'd gladly pay legal consultation/representation fees before i give tham an extra dime.

Posted by msnglnk (52 days ago)

i got the mortgage and the house. the icbc gave me bs about how i needed to have a residence permit visa in order for them to lend me money. and the house company kept threatening this that and the other thing because the bank wouldn't lend me money. they claimed there was no contract becaus ethe bank wouldn't lend me money but then they would say i owed them money as penalty for violating a contract they said i didn't have. but of course they would't give me back my down payment as stipulated in the contract if i failed to get a mortgage to pay for then house. the only time they would ackknowlege the existance or non-existance of the contract was to suit their needs and/or goals. the bank said i needed a certain visa but now the gov has got visa policies all screwed up so of course i can't get a visa. like i said in the begining i'll just switch banks and i did. and now i got my mortgage and new home all on the same visa they said wasn't good enough.