The Shanghai Pudong New Area Government issued the Notice of Pudong New Area on Promoting the Development of Enterprises for Equity Investment and Equity Investment Management Purposes ("Notice") and the Implementing Measures of Pudong New Area on Promoting the Development of Enterprises for Equity Investment and Equity investment Management Purposes ("Measures") in December 2008.

1. Types of enterprises
Only EEIs and EEIMs whose business registration, tax registration and principal business premises are all in Pudong New Area and complying with the necessary conditions specified in Article 3 in the Notice on Business Registration and Other Issues of Equity Investment Enterprises and their senior officers are eligible to enjoy said preferential treatment.

2. Incentives for enterprises
(1) An incentive on a lump-sum basis for an EEI established in company form
    An EEI with a registered capital of RMB500 million: RMB5 million
    An EEI with a registered capital of RMB1.5 billion: RMB10 million
    An EEI with a registered capital of RMB3 billion: RMB15 million
(2) An incentive on a lump-sum basis for an EEI established in partnership form
    An EEI with fund raising amounting to RMB1 billion: RMB5 million
    An EEI with fund raising amounting to RMB3 billion: RMB10 million
    An EEI with fund raising amounting to RMB5 billion: RMB15 million

3. Subsidies for senior officers
(1) For the chairman of the board, vice chairman of the board, general manager or deputy general manager of an EEI and an EEIM established in company form, a subsidy equivalent to 40% of his/her total remuneration in the current year shall be granted, and for the investment manager and project manager a subsidy equivalent to 20% of his/her total remuneration in the current year shall be granted.
(2) For the chairman of the board, vice chairman of the board, general manager or deputy general manager of an EEI established in company form with a registered capital of RMB 500 million and an EEIM established in company form with RMB 1 billion under management, he/she shall be given a housing allowance or rental subsidy of RMB 0.2 million on a lump-sum basis.

4. Encouragement of investments in Pudong's enterprises
EEIs are encouraged to invest in the state-owned enterprises, high-tech enterprises, and small and medium-sized enterprises in Pudong New Area. EEIs investing in enterprises specified in industries catalogue and encouraged in Pudong New Area, or investing in other emerging projects encouraged in Pudong New Area, shall be given an incentive equivalent to 50% of the total return on investment achieved in Pudong New Area by such EEIs.

Charles Qin: charles.qin@llinkslaw.com
Michael Mei: michael.mei@llinkslaw.com
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