Best Project Finance Lawyers in Chengdu

About Project Finance Law in Chengdu, China

Project finance in Chengdu follows the broader framework of mainland China project finance, overlaid by provincial and municipal practice and approval pathways. Projects are typically set up through a special purpose vehicle - a project company - which carries project contracts, financing and project assets. Key features include reliance on cash flow from the project rather than sponsors equity, structured collateral and guarantees, and multiple public approvals when projects affect land use, environment, utilities or public services.

Chengdu, as the capital of Sichuan Province, has an active pipeline of infrastructure, energy, industrial park and urban development projects. Local government involvement - including approvals, land supply and sometimes financial support or guarantees - plays a major role in how projects are structured, procured and financed.

Why You May Need a Lawyer

Project finance transactions involve complex contracts, regulatory approvals and technical documentation. You may need a lawyer in Chengdu in the following situations:

- Preparing or reviewing procurement and tender documents for a public-private partnership - to protect bidding rights and avoid post-award disputes.

- Structuring the project company and shareholder agreements, including foreign-invested enterprise requirements and equity waterfall arrangements.

- Drafting and negotiating financing documents - loan agreements, security documents (mortgage, pledge, charge), intercreditor agreements and payment interlock.

- Handling land use, title, allocation and compensation issues, including land transfer, rural land conversion and resettlement arrangements.

- Obtaining regulatory approvals - project approvals from development and reform authorities, construction permits, environmental approvals and connection permits.

- Managing environmental and social compliance - environmental impact assessments, mitigation measures and public consultation requirements.

- Advising on foreign investment rules - negative list, required approvals or filings, foreign exchange registration and cross-border financing compliance.

- Advising on tax, customs and incentive eligibility - VAT, corporate tax, import duty exemptions and local government incentives.

- Representing parties in enforcement, restructuring, refinancing or disputes - negotiation with lenders, restructuring debtor liabilities or pursuing claims in arbitration or local courts.

Local Laws Overview

Key legal and regulatory areas that shape project finance in Chengdu include the following:

- PRC Company Law and Contract Law - governing project company formation, corporate governance and the enforceability of commercial contracts.

- Foreign Investment Law and implementing measures - for projects involving non-Chinese sponsors, including the negative list approach and required filings with authorities.

- Administrative approval regimes - project approvals must often be obtained from municipal and provincial development and reform authorities, and certain projects require approval by higher-level bodies depending on scale and sector.

- Land use and real estate rules - state ownership of land in China requires the transfer of land use rights; land supply, land transfer methods and land mortgage procedures are key to securing collateral for financing.

- Environmental protection and planning law - environmental impact assessments, pollution control measures and approvals from ecology and environment authorities are mandatory for many project types.

- Construction, planning and utilities law - construction permits, building codes and utility connection approvals must be obtained before or during construction.

- Security and enforcement rules - PRC law recognises mortgages, pledges, assignments and guarantees, but registration of security interests with the relevant local authorities is essential for priority and enforceability.

- Financial regulation - bank lending, bond issuance, and foreign loans are subject to banking, foreign exchange and securities regulation; large infrastructure projects often involve domestic policy banks and commercial banks regulated by national authorities.

- Public-private partnership policies - municipal and provincial PPP guidelines set out procurement, revenue sharing, government payments and risk allocation mechanisms.

- Dispute resolution and insolvency - PRC Arbitration Law and Civil Procedure Law, alongside local court practice, affect remedies available to lenders and sponsors in default or insolvency scenarios.

Frequently Asked Questions

What is the typical structure of a project finance transaction in Chengdu?

Most projects use a special purpose vehicle - a project company - that holds the project assets, contracts and licences. Equity is provided by sponsors and debt by banks or bond markets. Collateral often includes land-use rights, project accounts, pledges of equity, and assignment of project contracts. Government approvals and guarantees or availability payments may be part of the revenue structure for PPP deals.

How long do approvals normally take in Chengdu?

Approval timing varies by sector and scale. Routine municipal approvals and permits can take several weeks to a few months. Higher-impact projects that require provincial or national approvals, environmental impact studies or land rezoning can take many months and sometimes over a year. Early engagement with municipal authorities helps manage timeframes.

Can foreign investors lead project finance deals in Chengdu?

Yes, foreign investors can participate, but projects must comply with the PRC Foreign Investment Law and relevant negative lists. Some sensitive sectors may be restricted or prohibited. Foreign sponsors should also consider foreign exchange rules for financing, SAFE registration for foreign loans and local partner arrangements when needed.

What are common security packages for lenders?

Typical securities include mortgages over land-use rights and project property, pledges of shares in the project company, pledges of project accounts and receivables, assignment of contracts, and guarantees from sponsors or government-related entities. Proper registration of security with local authorities is critical to preserve priority and enforceability.

Are government guarantees and local government support common?

Local government support can take many forms - direct guarantees, revenue support, availability payments, land supply or preferential fees. However, central policy has been cautious about open-ended local government guarantees, so any guarantee or support should be carefully documented and checked against current policy and budget rules.

How are environmental requirements handled?

Projects subject to environmental impact assessments must complete EIA reports and obtain approvals from the relevant ecology and environment authorities before major construction. Chengdu has specific environmental standards and monitoring procedures. Non-compliance can lead to fines, construction stoppage or revocation of permits, so environmental due diligence and mitigation planning are essential.

What are the tax and customs considerations for project finance?

Project companies must consider VAT, corporate income tax, land value-added tax and potential duties on imported equipment. Local tax incentives or exemptions may be available for certain industries or high-tech projects. Tax structuring advice is important to optimize costs and ensure compliance.

How should disputes be governed - Chinese courts or arbitration?

Arbitration is commonly used in cross-border and commercial project contracts, with institutional venues chosen by parties. Arbitration awards are generally enforceable in China under the New York Convention, subject to local enforcement practice. For projects involving public authorities, litigation or administrative challenge routes through local courts and administrative review may also be relevant. Choice of governing law and dispute mechanism should be aligned with enforceability and practical remedies in China.

What due diligence should lenders require?

Core due diligence items include legal title to land and assets, validity of project approvals and permits, enforceability of project contracts and offtake agreements, corporate records and encumbrances, environmental liabilities, financial model stress testing, construction contract and contractor qualifications, insurance coverage, and counterparty credit assessments. Local counsel can assist with searches and verification at municipal and provincial registries.

What happens if the project company becomes insolvent?

Insolvency of a project company triggers creditor enforcement options under PRC law, including foreclosure on secured assets and enforcement of guarantees. However, enforcement can be complex where public assets, land-use rights or government approvals are involved. Early restructuring negotiations, coordinated creditor action and familiarity with local court practice increase the chance of an orderly resolution or refinancing.

Additional Resources

National bodies whose rules often affect project finance - National Development and Reform Commission, Ministry of Finance, Ministry of Ecology and Environment, People's Bank of China and China Banking and Insurance Regulatory Commission.

Provincial and municipal authorities - Sichuan Provincial Development and Reform Commission, Sichuan Department of Ecology and Environment, Chengdu Municipal Development and Reform Commission, Chengdu Natural Resources and Planning Bureau, Chengdu Ecology and Environment Bureau, Chengdu Housing and Urban-Rural Development Commission and Chengdu Municipal Finance Bureau.

Procurement and PPP guidance - municipal PPP office or the finance bureau that handles public-private partnership programs and local PPP guidance.

Arbitration and dispute institutions - consider national and international arbitration institutions commonly used in China for cross-border disputes as well as local courts for administrative review.

Local professional advisors - engage local law firms with project finance experience in Chengdu, local accounting and tax advisers, environmental consultants and qualified local engineering and construction advisers for technical due diligence.

Next Steps

If you need legal assistance with a project finance matter in Chengdu, consider these practical steps:

- Prepare a short brief summarizing the project: scope, parties, proposed financing, land and permits status, and any pressing deadlines.

- Engage local counsel early - ideally before public bidding or major contract signing - to manage approvals, structure the project vehicle and advise on security and enforcement.

- Assemble a due diligence team - legal, tax, environmental and technical - to identify material risks and remediation steps prior to financial close.

- Ask for a checklist from counsel of documents you need to collect - corporate records, land-use documents, permits, contracts, insurance certificates and financial statements.

- Request a preliminary timetable and cost estimate for key approvals and filings so you can plan funding and milestones realistically.

- If you are a lender or sponsor, insist on clarity around local government support, security registration and dispute resolution - and obtain comfort letters or written commitments where possible.

Working with experienced local advisers will help you navigate municipal processes in Chengdu, align the project with PRC legal requirements and reduce operational and enforcement uncertainty.