DNB Bank

DNB Shanghai Branch

Facts

$0

$5

$10

$15

2010 2011 2012 2013 2014 2015 20160 %

5 %

10 %

15 %

Trill

ions

GDP (current US$) GDP growth (annual %)

GDP

• GDP at marked prices (current US$): $11.199 trillion (2016)

• GDP growth (annual): 6.7 % (2016)

• Population, total: 1.378 billion (2016)

• Urban population: 57% (2016)

8 %

40 %52 %

Agriculture

Industry

Services

Value added (% of GDP)

China at a glance

Key Aspects of the 13th FYP

• Economic Growth Remains Central: 6.5% average annual growth

• Innovation-Driven Development: Increase spending on R&D,

raise the quality and volume of Chinese patents and enhance

human capital

• Shift to Higher-Value-Added Manufacturing

• Green growth: Clean energy and green manufacturing

• Belt and Road: Expand its interregional and international trade

DNB has a long history in China

3

1982: Representative office in Beijing

- Focused on Export Credits/Trade Finance

2006: Branch Office in Shanghai

- Nordic Companies

- Local & International Shipping Clients

- Local & International Energy Clients

2010: Received Full RMB License

- RMB and Foreign Currency Loans

- Currency hedging products and advice

- E-Banking

1982 2006 2010

DNB Shanghai Branch

Business area

Support unit

Group staff unit

ComplianceDavid Li

General managerRudy Hassam

Admin & Operations

Veronica Wei Wang

Corporate & EnergyMia Luo

Bing ZhaoWilliam Sun

MarketsCandice PuVicky Wei

Client servicesConnie Yan Han

ITGerald Yu

AccountingCindy Lei Chen

Common types of company registration in mainland ChinaBusiness structure Description Pros ConsWholly Foreign Owned Enterprise (WFOE)

A limited liability company wholly owned by the foreign investor

- Freedom of operation and full business functionality of a company in China

- Generally takes longer to setup and has higher fixed costs than other options

Joint Venture (JV) A limited liability company formed between a Chinese company investor and a Foreign investor

- Access to the network of a local Chinese partner

- A partner can provide a ready made sales connections for your business in China

- Difficult to maintain control & leverage over your Chinese Joint Venture partner

- There is the risk that you could handover your IP to your Chinese Joint Venture partner and lose control if the partnership is dissolved.

Representative Office (Rep Office)

Established to engage in business liaisons, quality control, product promotion, market research, exchange of technology and other permitted activities.

- Quick and easy option to open a business in China

- You can leverage strong local expertise of how to operate in China immediately

- Easily transfer to your own WFOE in China if your business in China takes off

- No direct ownership over an entity in China

- Can not engaged in any business for profit or sign contracts or deals on behalf of the parent enterprise

Foreign Invested Partnership Enterprise (FIPE)

A unlimited liability business entity without minimum requirements on registered capital.

- Requires no registered capital but can still hire people, collect payments, issue invoices, apply for work and residence in China freely.

- Unlimited liability, a partnership must pay all its debts with property contributed to the partnership by the partners

GAINING FUNDING

How to secure funding for your Chinese entity

OnshoreOffshore

Shareholder Loan

SAFE & PBOC approvals

Amount determined by company’s borrowing gap/net assets

Once SAFE approved, debt servicing is automatically allowed

Up to 10% WH tax on interest payments

Capital Injection

MOFCOM, SAFE & PBOC approvals

Up to 10% WH tax on dividend

Provides additional borrowing gap

Bank lending

Working capital or fixed assets

Annual renewal or term loan

All major currencies

Umbrella working cap facility (multi-borrowers)

Entrustment loan

Intercompany loan

Facilitated by intermediary bank

Three way agreement between each party

KEY TAKEAWAYS:

China has many opportunities, make sure you utilize these by :

Planning Ahead

Committing Time

Taking Local Advice

Banking in China

Banking – keeping RMB 'v' Foreign Currency separate

Onshore

RENMINBI:

- Local currency, critical for local working

capital

- Reduce fx exposure

- Deposit rates fixed, lending rates semi-

fixed

- Variable funding quota

- RMB loans can be freely converted into

Foreign Currency.

FOREIGN CURRENCY:

- Predominately USD market

- Foreign banks have a tendency for

competitive advantage

- Tight funding quotas (short & long term)

- FCY loans cannot be freely converted into

RMB.

Key characteristics:

Banking in China

Full Range of Corporate Banking Products

Risk Management

Trade Finance / Guarantees

Export / Import Letters of Credit Bank guarantees Stand-by Letters of Credit

Financing

Credit Facilities (short/long term)

Working Capital Loans Investment Loans Export Financing Syndicated Loan Facilities

CM & FXCash Management

All relevant Accounts Payments Electronic Banking / DNB connect

DNB Markets Spot Derivatives (FX, IR, Commodities)

SPECIALIZE IN SELECTED INDUSTRIES

Trusted by leading companies in selected industries

Our strategy is based on industry knowledge and long-term relationships.DNB is in it for the long run

SELECTION OF CLIENTS

Energy

Manufacturingindustries Telecoms

Healthcare

DNB Shanghai’s Competitiveness & AdvisoryCredit• Flexible organization – quick decision making process• Good credit capability / quotas in China• Pricing according to Group relationships

Service• Tailor-Made solutions

• Service to all angles of Customer Group Local Contacts Group Contact DNB Inter-branch communication

• Dedicated Customer teams

Advisory & Knowledge Transfer • All Bank & Financing matters• How to set up business in China• Regulatory issues• FX/Currency risk training of your staff• Market updates

Our comparative advantage is understanding your business and our goal is to optimize your China banking solutions in a global perspective

• Innovation Norway• Norwegian Chinese Chamber of Commerce• Royal Norwegian Embassy• Norwegian Business Association China

Potential partners in China for Norwegian companies

DNB Bank

Shanghai Branch901, Shanghai Central Plaza, 381 Huai Hai Zhong Lu, Shanghai, 200020, P.R.China

Switch. + 86 21 6132 2888 Fax. + 86 21 6132 2999 E-mail. dnb.china@dnb.no Web www.dnb.no

Corporate & EnergyMia LuoTel: +(86 21) 6132 2871mia.luo@dnb.no

Bing ZhaoTel. +(86 21) 6132 2867bing.zhao@dnb.no

William SunTel. +(86 21) 6132 2870william.sun@dnb.no

DNB MarketsCandice PuTel. +(86 21) 6391 6262candice.pu@dnbbank.com

General ManagerRudy Jean-Paul HassamTel. +(86 21) 6132 2801rudy.hassam@dnb.no