Commercial Lease Guide for Foreigners in China

Renting office or retail space in China involves unique considerations. Here's what foreign businesses need to know about commercial leases.

Types of Commercial Space

• Grade A/B/C office buildings
• Serviced offices and co-working spaces
• Retail storefronts
• Industrial and warehouse space
• Mixed-use developments

Key Lease Terms

Rent and Payment

• Rent typically quoted per sqm per day
• Management fees usually separate
• Payment quarterly or monthly in advance
• Annual rent increases common (3-5%)

Deposit

• Usually 2-3 months rent
• Returned at lease end minus deductions
• Negotiate clear return conditions

Essential Contract Terms

• Precise premises description
• Permitted use clause
• Fit-out and restoration obligations
• Subletting restrictions
• Early termination rights
• Renewal options
• Dispute resolution

Registration Requirements

Commercial leases should be registered with housing authority:

• Required for leases over 6 months
• Needed for business registration at address
• Landlord cooperation required

Common Issues

• Landlord won't provide fapiao (tax invoice)
• Unauthorized sublease situations
• Building permits and compliance issues
• Disputes over fit-out costs
• Early termination penalties

Tenant Rights

• Quiet enjoyment of premises
• Landlord maintenance obligations
• Right to renew (if contracted)
• Deposit return

Due Diligence Checklist

• Verify property ownership
• Check for mortgages or liens
• Confirm permitted use
• Review building compliance
• Understand management rules
• Inspect physical condition

Negotiation Tips

• Negotiate rent-free fit-out period
• Cap annual rent increases
• Include early termination rights
• Clarify restoration obligations
• Get renewal options in writing