Capital investment: residential and commercial buildings in Berlin

Real Estate, Investment and Economy in China

First of all, the most important question, how is the real estate market doing? The good news first: very good. Example: In Beijing, the capital, purchase prices (by house price index) increased by 47.2 points (+ 47.2%). A good real estate return. In comparison, in Germany the house price index rose by 32.3 points in the same period. China is making further leaps forward.

Just buy it? Of course you can’t. Who would have thought, only Chinese citizens are allowed to own real estate in China. And yes, only Chinese citizens are allowed to own real estate in China, as you will learn later in the section on business models and taxes.

As a small analysis, with a look back at the past years, we wanted to summarize the most important figures, around the economy, population, age structure and also real estate price development. Because… The USA has it as the largest national economy perhaps, soon replaced. With its million mega cities like Chongqing, Shanghai, Beijing, Guangzhou, Shenzhen, Wuhan and Tianjin. Here are the latest figures from the IMF:

If you want to invest money abroad, or even set up a company/branch locally and live here, you are looking for one thing above all else:

Plant Safety

Markets are subject to fluctuations, the more extreme these fluctuations are, the higher the risk to capital. Whereas 10 years ago the real estate market was still making great leaps upwards, but at the same time also downwards, the trends are increasingly stabilising, the extremes are becoming smaller. Accordingly, first a look at the Chinese real estate industry and the development of purchase prices.

House price in China: View of Beijing

House prices in Beijing, China – You are looking at the residential price index provided by the National Bureau of Statistics of China (NBSC). The NBSC data goes back to January 2011, and prices have been rising every year since 2015, for residential buildings, but also for land.

What does the house price index say?

House prices have risen steadily in recent years in almost all provinces. This is shown by the house price index available here from the NBSC, which, starting from the year 2015 (index = 100), stood at about 47.2 points in 2020. Thus, compared to the base year 2015, prices have increased by 47.2 percent.

Of course, the capital Beijing is the hotspot for foreign investors. As you can see right now compared to the country as a whole, with an increase of

This is attracting more and more interest from investors from Europe, USA, UAE and all over Asia to China.

Source: Global Property Guide

Land prices: Price index for China

This statistic comes from the Bank for International Settlements (Real Residential Property Prices for China [QCNR628BIS]). The basis here is 2016, which means that prices have increased by around 9.9 points since 2016.

Comparison: China / Germany: House price development

Now many will ask themselves, how is the development in Germany? Is it worth investing in real estate? Here you can see the development of house prices in Germany in the years from 2000 to 2019 (2015 = Index 100); as well as the previous statistics on housing in Beijing.

China 2015 / 2019 Development:

• 48.1 points (+)

Germany 2015 / 2019 Development:

• 28.1 points (+)

Property prices stabilise: 10-year analysis

Source: CEIC Data

Just like the Chinese economy, the real estate market is also stabilizing. The extremes of fluctuation are becoming smaller. So China, regardless of politics, is becoming an increasingly stable market, also for investors who want to invest money for the long term. The risks are declining.

China is building and building.

In summary – China’s real estate market in the last 5 years? The overall price index rose by 9.9 points, in mega cities like Beijing even by 47.2 points. With that, let’s take a look at the economy, gross domestic product and purchasing power in China. After that you will learn about the different types of companies in China.

Economy in China: GDP and purchasing power

Source: Socialmediaone.de(Marketing China)

Below is a quick look at China’s economy. More detailed analysis can be found in the source link. This infographic is interesting because 10 years ago everyone thought China would overtake the US in 2014. As we know today, a miscalculation. The US is still ahead of China!

Currently, the American economy is doing splendidly, especially after the US president cut many US taxes.

Tip: Save taxes with real estate (USA)

By 2025, the US, as an economy, will also remain ahead of China. According to the current IMF forecast, seen here, based on purchasing power-adjusted gross domestic product (GDP), in the years 2019 to 2021 (in billions of US dollars).

Source: Statista.

Growth forecast (IMF): 2025

View from the Oriental Pearl Tower in Shanghai.

Population: forecast until 2025

Not only is China one of the big players, the country continues to grow, as seen here, in total population from 1980 to 2018 and projections to 2025, with the population approaching one and a half billion by 2025.

• 2025 – 1,417 billion +0.9 %
• 2020 – 1,404 billion +2.18 %
• 2015 – 1,374 billion + 2.53 %
• 2010 – 1,340 billion + 5.76 %
• 2000 – 1,267 billion + 10.84%
• 1990 – 1,143 billion
• 1980 – 987.05 m
• …

More and more inhabitants are earning more and more money. Since 2006/2008, the gross domestic product has been rising almost inexorably. Since statistics are worth a thousand words, here is the gross domestic product (GDP) in current prices, from 1980 to 2019 and forecasts, again with forecast to 2025 (in billions of US dollars).

• 2025 – $23,029 billion + 54.97 %
• 2020 – $14,860 billion + 33.71%.
• 2015 – $11,113 billion + 84.20%
• 2010 – $ 6,033 billion + 163.44 %
• 2005 – $ 2,290 billion + 90.04 %
• 2000 – $1,205 billion
• 1990 – $396 billion
• 1980 – $303 billion
• …

Here you can see once again the real growth of the gross domestic product (GDP) from 1980 to 2019 and forecasts to 2025 (compared to the previous year) visualized.

What does that mean per person? If you divide the GDP among individuals, it shows that the purchasing power of individuals in China is increasing and increasing. Another indicator that makes China one of the current and future sales markets.

• 2025 – 16.284,03 $ + 50,22 %
• 2020 – 10.839,44 $ + 34,07 %
• 2015 – 8.084,80 $ + 79,67 %
• 2010 – 4.499,79 $ + 373,08 %
• 2000 – 951,15 $ + 174,21 %
• 1990 – 346,86 $
• 1980 – 307,00 $
• …

Who buys? Average age of the population from 1950 to 2020 and forecasts until 2050.

• 2050 – 47.6 years (+ 1.3 years)
• 2040 – 46.3 years (+ 3.7 years)
• 2030 – 42.6 years (+ 4.2 years)
• 2020 – 38.4 years (+ 3.2 years)
• 2010 – 35.2 years (+ 5.1 years)
• 2000 – 30.1 years
• …

Import or own production? China: Import of goods from 2009 to 2019 (in billions of US dollars).

• 2019 – $2,077.1 billion + 23.67%.
• 2015 – $1,679.57 billion + 20.29%.
• 2010 – $1,396.25 billion

Value of German exports to China from 2007 to 2019 (in billions of euros).

• 2019 – $95.98 billion (+$24.7 billion)
• 2015 – $71.28 billion (+$17.49 billion)
• 2010 – $53.79 billion (+23.89 billion)
• 2007 – $29.9 billion

Shanghai’s inner city, with its large international financial community, is one of the arrival points for entrepreneurs who want to gain a foothold in China. So let’s take a look at the different types of companies that are possible in China (for foreigners).

Tax: Rental income in China

Source: Global Property Guide.

First of all, only Chinese citizens are allowed to own real estate in China!

Generally, rental property is subject to Individual Income Tax (IIT), Business Tax (BT) and Real Estate Tax (RET). In addition to these 3 taxes, there may be some other taxes and surcharges on rental income that vary from city to city. Local governments in some provinces have a lot of freedom when it comes to taxation. Therefore, tax rates and the calculation of taxable income vary from city to city.

• Individual Income Tax (IIT)
• Business Tax (BT)
• Real Estate Tax (RET)

Income tax: Letting of apartments

Investment income, including rental income, is taxed at a flat withholding rate of 20% of gross income.

Trade tax

Non-residents who earn rental income are subject to a 3% business tax. Taxable income is calculated by deducting business tax, operating costs, administrative costs and finance costs from gross income.

Property tax

The municipal property tax applies to companies and individuals with foreign investors. Owners of real estate (but not land) are subject to this tax, which is levied at 1.2% of the assessed value. If the property is rented out by the owner, the tax rate payable on this is 12%. This tax rate is levied on the annual rental income. A special case applies to the rental of residential property, in which case the rate may also be reduced to 4%. However, practice may vary within China as the applicable tax rates are set by local authorities, according to Global Property Guide.

This tax is payable to local governments and is paid annually in installments.

Tax: Capital gains

Only Chinese citizens are allowed to own land in China.

Income tax

Profit from the sale of real estate, are taxed at a flat rate of 20%. Taxable income is the gross sales price less acquisition costs and related reasonable expenses. The maximum deduction for property development costs is 10% of the property cost.

Trade tax

The sale itself is also subject to trade tax. This is 5% of the net profit.

Properties that have been owner-occupied for five years prior to sale are exempt. In Beijing, the time limit is one year.

Land Growth Tax

The land increment tax is a transaction tax, on the transfer of rights to use state-owned land, in China. It is based on net profit and levied at progressive rates. The taxable profit is determined by deducting the cost of acquiring the land, development costs, repair and maintenance costs, relevant tax payments and other amounts considered deductible by the tax authorities from the proceeds of the property sale.

The tax rates start at 30%. However, they could be as high as 60%. This depends on the tax base, which is the valuation of the net profit combined with all the deductions.

“Real estate limited liability company” in China?

Since direct real estate ownership is not possible for foreigners, here is a look at possible business models that can be entered into together with Chinese partners. For tips on setting up a company in China, I would like to refer to an external site with much more in-depth information on setting up a company.

This question comes up relatively often with investors who want to expand to China. In Germany, many like to set up a real estate GmbH or a family foundation. In Europe, as well as in America, people are used to the fact that setting up a company for activities in the local market is relatively easy. In China, however, it is the case that every time a foreigner sets up a company, a Chinese partner must be involved.

You can find more information about the company models here (external).

List of companies:

• Representative Office
• Company with exclusively foreign participation (WFOE)
• Foreign trading companies (FICE)
• Joint venture – joint ventures
• Partnerships with foreign shareholders (Foreign Invested Partnerships)
• Branches

Alternative: Investing in shares

More and more are investing in China, of course on the stock market. Stocks like Tencent, Xi and also new ones like Niu (electric car) are gaining month by month. Accordingly, more and more are thinking about investment properties in China. From single stock, ETFs to currency trading.

Here’s a list of holdings that I find exciting:

Data: Global X ETFs

Tip. Real estate shares in Germany

Which companies are listed on the German stock exchange? Here is an insight into the top 30 real estate stocks in Germany:

• Real estate stocks: Germany

The right property abroad: Paris, Alsace or Côte d’Azur?

The decision has been made and you have decided to buy a property abroad in France? Then be sure to read this article, because we offer you helpful tips. In order for your search to be successful, you first need to discover the right online portal for you. Although many online portals have the same basic structure, different filter functions and the focus on the country France can make a difference for the selection.

The most beautiful residential areas France

As everyone knows, France has various charming cities and Mediterranean beaches. No wonder that many do not immediately know where to start looking for a property abroad in France. While there are various beautiful places to live, not all places to live will satisfy your desires. For this reason, we have picked out 5 different places to live in France to help you make your choice.

Investing in real estate: France

Living and working abroad is a very memorable experience, professionally, personally, culturally and of course financially. In this free guide, you’ll get investment tips for all the major cities in Europe, America and Asia, from New York to London to Paris.

• Investing abroad: Real estate (external)

Toulouse: The pink city

Toulouse is located in the southwest of France and is the fourth largest city. In Toulouse there are very many buildings that are made of red bricks and for this reason it is often called the “pink city”. Not only is it often very windy here, but there is also no shortage of tourists as there are many places of interest. Toulouse is also a good starting point for those who want to make a career. That is why there are also countless students.

Toulouse city video with resident

Map & Location

Paris: City of Love

The city of love. Just about everyone wants to have been there at least once in their life. You’ve already been there, fallen in love with the city and are now considering buying a property abroad in Paris? One thing should be clear to you right from the start, especially with this city: Paris is very expensive. But Paris is not for nothing one of the most famous cities in Europe. Here you will not only find good French cuisine, but also culture and art play a significant role. No wonder that the city seems very crowded. However, you still have the choice whether you want to live directly in the hectic city or in the somewhat quieter surrounding countryside. While the surrounding countryside is more often chosen by families, students often like to choose the city centre.

Paris from above: Video

Paris Map & Location

Eifel Tower 360°: International Relevance & Landmark

Nice: Port city

The port city of Nice is particularly popular and there is often a lot going on here as well, because there is a large shopping mile and the nightlife is not neglected either. Families therefore like to choose residential areas that are a little further away from the centre. If you are interested in what sights Nice has to offer, you will mostly come across museums and famous old buildings. Should you decide to buy an overseas property in Nice, you will benefit from plenty of sun and beach. Here you have the opportunity to unwind and enjoy the good weather.

Video

Map & Location in France

360° harbour view

Bordeaux: City on the Atlantic

Bordeaux is a very popular city to live in – but why? Quite simply, this city fulfils all wishes. On the one hand you have the city life and many career opportunities and on the other hand it is not far to the sea. So, should you buy a property abroad in the middle of Bordeaux and have too much of the hectic city life in between, you can just grab your car or bike and be at the sea in not too long.

Video

Bordeaux: Map & Location

Lyon: Little Paris

The city of Lyon is often known as “Little Paris”. Students are especially drawn to this city, as there are countless universities here. The advantage of Lyon? Compared to other cities, such as Paris, it is much cheaper here. Lyon has a lot to offer. Besides shopping and nightlife, there is also a charming old town and great French cuisine. Since it is only “little Paris”, people here are less stressed and hectic and thus often more open to be found. If you are interested in a property in Paris, but find it too expensive, or if the hectic pace of life makes you doubtful in the long run, Lyon could be the perfect alternative for you.

Video

Map & location: Lyon

Monaco and Monte-Carlo: principality

If you like the French Mediterranean coast, you’ll love the Principality of Monaco. As in many exclusive places in this world, it is not so easy to buy a property in Monaco. Those who are often in Kitzbühel in winter, for example, know that one has to live in Kitzbühel for 5 years in order to be allowed to buy a property or a plot of land. But why does a city council do such a thing? It is mainly to protect the residents, because the more “speculators” come to such a relatively small town or principality, the greater the vacancy of properties. Used once a year as a holiday home or never if the property is considered a pure speculative investment. But Monaco also wants to protect itself from this by such regulations. Accordingly, there are laws that clearly regulate the acquisition of real estate and land.

• Buy property Monaco

House & Apartment for sale in France

From the valuation to the speculation tax. In this guide you will find all the important factors simply explained. Learn step by step the procedure in the apartment sale to be able to answer the question: Selling with or without an estate agent? The private sale of real estate involves many risks and sources of error, starting with the apartment valuation to the offer price to the individual marketing, from “advertising” to internal customer network and off market real estate sales.

• Sell apartment
• Sell house
• Sell land
• Sell property

Buying: Portals for cheap real estate

Real EstateScout24

Everyone knowsImmobilienScout24. This real estate website brokers properties all over the world. Here you will not only find properties for sale, but also if you are looking for a property that is rented, you are exactly right here. If you are looking for a property on ImmobilienScout24, you will benefit from a clear presentation and also the popularity of this portal.

Green-Acres.com

This online portal focuses on France, Portugal, Spain, Italy and Greece. This could be the right place for you if you are already sure that you want to buy a property abroad, but still doubt whether France is the right country. You have the possibility to make comparisons, which can concern the price, the area or also the location.

Franimo

As the name“Franimo” suggests, this online portal focuses solely on France. Accordingly, this website has a lot of properties for different places in France to offer. If you haven’t found a favourite place in France for yourself yet, you can read our place recommendations further down in the article beforehand.

AuSud

The online portal“auSud” also only deals with the country of France. The most important information about a property is clearly presented here in a table and there is also a small description of the property. You can specify the price range from the outset and also the location.

Immowelt

The portal Immowelt mediates real estate all over the world and for this reason also has a large offer for France. Sellers have the opportunity to create clear advertisements for their properties. The contact is usually directly under the ad and you have the opportunity to immediately contact the seller.

Buying property abroad: Tips

• New York, LA, London & Co: Luxury Real Estate
• Real estate agent
• Buy a holiday home
• Foreign property Italy
• Foreign property Spain
• Foreign property Mallorca
• Luxury Real Estate Mallorca
• Off market – especially in hot real estate markets

Sun, warmth & good mood: Life in Italy

You need a break from the daily grind in Germany? What is nicer than having the opportunity to escape for a few weeks in your property abroad in Italy? Nothing at all. If it is financially possible for you, a property abroad is a great investment. Here we have a few examples of beautiful places in Italy and show you examples of beautiful properties that are available there.

Lake Garda: life on the lake

Lake Garda is one of the most popular destinations in Italy. Not entirely improbable is the thought for holidaymakers who visit the same holiday destination in Italy every year to buy their own small holiday home here. They save not only the search for a suitable accommodation and have to worry whether this is then also available at the planned time, they also save a lot of money. Nevertheless, you should consider that a foreign property requires a certain care. At this point you should weigh up whether the purchase is worthwhile for you.

Lake Garda Map & Location in Italy

Ambience and view

Sardinia: Italian Mediterranean Island

The Italian Mediterranean island of Sardinia is also an extremely popular destination in Italy. No wonder, because here there are incredibly many sandy beaches and also the landscape is ideal for hiking. The villa from this video is for most people not a foreign property in question, but it is interesting to see how beautiful life can be in Sardinia. It is possible to find your dream property here. Use the best for a suitable real estate portal.

Sardinia Map & Location in Italy

South Tyrol: The natural paradise

South Tyrol is the northernmost province of Italy. This holiday resort convinces the holidaymakers by the fabulous nature. Here you can experience a combination of wine landscapes and the Alps. Especially those who want to switch off from the big city stress in a more rural way of life are exactly right here. The landscapes are ideal for hiking. If you are enthusiastic about South Tyrol and want to invest in a foreign property, the most diverse portals are suitable for a successful search.

South Tyrol Map & Location in Italy

House & Apartment for sale in Italy

From the valuation to the speculation tax. In this guide you will find all the important factors simply explained. Learn step by step the procedure in the apartment sale to be able to answer the question: Selling with or without an estate agent? The private sale of real estate involves many risks and sources of error, starting with the apartment valuation to the offer price to the individual marketing, from “advertising” to internal customer network and off market real estate sales.

• Sell apartment
• Sell house
• Sell land
• Sell property

Buying: Portals for cheap real estate

The decision has been made and you are now looking for a property abroad that fulfils your wishes? If you search the internet for a property abroad in Italy, you will come across countless portals that present the best offers for you. They often have different filter functions that you can use to narrow down your search. We have selected the best portals for you, on which the search for a suitable property abroad can be worthwhile.

Immobiliare.it: The Italy Specialist

If you should already be quite sure that you are looking for a property abroad in Italy, then this real estate portal could be just right for you. Here, the focus is entirely on the beautiful country of Italy. On this portal you can not only find properties to live in, but also if you have the idea to build up your life abroad and want to open a restaurant or a small business, you could find here a commercial property. The website Immobiliare.it also offers various filter functions from the district to the price to the type of property.

Immowelt: A large selection

The large real estate portal Immowelt could be the right thing for you if you are not quite sure yet whether you want to buy a property abroad in Italy. Perhaps you are still in doubt between Italy and Greece and for this reason it is just right for you to have a larger selection available on the real estate portal. This way you have the possibility to compare prices and the quality of the properties you are interested in. The information you need is clearly presented on this portal.

Immozentral: The multifaceted portal

The real estate portal Immozentral also focuses on real estate around the world. Here you can not only discover many properties, but also advertise some yourself. Those who want to get rid of a property abroad and do without an agent can easily try their luck here. On this portal you will find properties from over 90 countries. Especially for Italy, the website has a very large selection.

Immobilienscout24: The portal that informs at the same time

On the portal Immobilienscout24 you can get some basic information about the country you decide to live in. Here you can not only search for a suitable property around the world, you will also receive important information about popular places to live, financing tips and other things you should consider. With just a few clicks and filter functions, you will find the offer that interests you in no time.

Renting out a property abroad: The advantages

The beautiful property abroad is too bad for many that it remains unused in the time in which one stays as an owner at home. Why not use the opportunity to rent out this property and thus create a small extra income? In addition, the property is occupied and the likelihood of someone gaining unauthorized access to the property is much lower. You don’t have to worry, you create the possibility for others to spend an unforgettable holiday in your apartment or house and at the same time you even earn money.

Investing in real estate: Italy

Living and working abroad is a very memorable experience, professionally, personally, culturally and of course financially. In this free guide, you’ll get investment tips for all the major cities in Europe, America and Asia, from New York to London to Paris.

• Investing abroad: Real estate (external)

A property in Italy is not the right thing for you? Perhaps you are interested in real estate in Mallorca. For this, please read our article:

Buying property abroad: Tips

• New York, LA, London & Co: Luxury Real Estate
• Real estate agent
• Buy a holiday home
• Foreign property France
• Foreign property Spain
• Foreign property Mallorca
• Luxury Real Estate Mallorca
• Off market – especially in hot real estate markets