The JLJ Group

1. 2011 The JLJ Group Solutions for China Entry & Growth

2. FIVE SERVICE LINES ASSISTING START-UPSThe JLJ Group – Solutions for China Entry & Growth One-stop service provider assisting companies to enter & grow in China Tax & Accounting Consulting FDI HR Services Recruitment Division Executive Search & staffing solutions Corporate tax and general accounting services HR Payroll Outsourcing; social benefits, etc. Set–up advisory, Corporate Formation, site location Market Research & Consulting Focus

3. JLJ CHINA ENTRY & GROWTH MODEL Client’s Stages Research Entry Growth • Investigate the market • Establish a presence in China • Grow in the China market JLJ Services • Market Research & Assessment • Market Strategy Consulting • Regulatory Environment Analysis • Partner Search & Due Diligence • Location Search • Entry Strategy Consulting • Location Selection • Corporate Formation • Human Resource Planning & Setup • Tax & Accounting Planning & Setup • Market Research & Analysis • Management Consulting • Human Resource Management Market Research & Consulting ▪ Corporate Formation ▪ Accounting ▪ Recruitment ▪ HR Payroll Outsourcing

4. OUR FOUR-CATEGORY TEAM Foreign Companies • Need professional services • Used to International standards • International cultural, education, experience • Experienced first-hand cultural shock 1. Western Professionals • International/Chinese education & experience • Speak both cultural “languages” 2. Chinese Returnees • Used to local business practices • Drive results “the Chinese way” 3. Chinese Local Managers • Fast changing and bureaucratic, requires local knowledge… China business environment / Chinese Gov’t Bureau

5. FOUR KEY AREAS JLJ CAN HELP COMPANIES IN CHINA • Consulting Services • Legal Setup / Corporate Formation • Headhunting for executive team • Payroll and Accounting Outsourcing

6. ASSIST IN IDENTIFYING VC/ANGEL INVESTORSConsulting – Case Study (I) Ongoing JLJ analysis Step 1: Preparation Step 2: Project Setup Step 3: Introductory Meeting Setup Step 3: Search Execution In-depth study of potential partners Initial Scan • Work with client and understand background of products, types of funds needed, etc. • Identify criteria for potential investors • Scan market for potential investors meeting initial criteria • Contact investors to discuss potential project, gauge interest on investors side • Conduct business due diligence on investors • Target most promising potential investors and set up face-to-face meeting • JLJ attends initial meeting to provide support • Investor search especially important for small startups with innovative technolgies or ideas • Similar methodology for other partner search projects

7. MAPPING SYSTEM AND IDENTIFYING PARTNERS TO COMMERCIALIZE TECHNOLOGYConsulting – Case Study (II) Technology Unsuccessful Company X Foreign Incubator / Gov. Org. State Owned Company Technology Testing Platform ? Technology Successful The “China Scale” can be massive; small companies may need support from larger firms to commercialize technology

8. DETERMINING LEGAL SETUP CRUCIAL STEP Comparison of Legal Setup Options (*) Denotes business activities from which revenue can be generated (**) Figures in RMB; reflects minimum as required but does not guarantee approval (#) Represents maximum duration of approval by the government Incorrect legals setup can lead to lost time and money in the mid-long term as well as possible fines from the government = Prohibited = Ideal

9. LOCATION OF COMPANY SETUP IMPORTANT Example: Analysis of Key Competitor Locations of Company X Competitor Competitor Xuzhou Yangzhou JIANGSU Liyang Shanghai Competitor Suzhou Wuxi Competitor GUANGDONG Competitor Shenzhen Looking at key customer locations and even competitor locations important; customer base and supply chain established Source: JLJ analysis based on multiple sources including company websites

10. JLJ (HUIJIE) ABLE TO FILL KEY ROLES OF COMPANIES BEGINNING CHINA OPERATIONS Foreign Management (Located Overseas) Who will be your China GM? Team Member Team Member Team Member Team Member The “right” leadership at the start can make a difference in the success or failure of a company in China

11. ACCOUNTING & HR SERVICES ALLOW COMPANIES TO FOCUS ON CORE BUSINESS Peripheral Business Peripheral Business CORE BUSINESS HR Services Tax & Accounting Technology • Labor Contract • Visa (foreign staff) • Payroll • Social Benefits • … • Tax registration • Tax compliance • Book keeping • FS generation • … Etc… R & D Assembly Sales & Distribution Outsourcing allows experts to take care of peripheral business processes

12. EMPLOYEE COST CALCULATION Employer’s and employee’s share of social benefits and individual income tax Components Example Employer's total expense Employer’s share of social benefits Add 1,329 =44.3% Gross salary 3,000 Employee’s social benefits Subtract 669 =22.2%+3 Employee’s taxes Subtract 16.55 Net salary 2,314.45 Net salary 0 4,329 EXAMPLE The “right” leadership at the start can make a difference in the success or failure of a company in China

13. SEVERAL KEY STEPS FOR COMPANIES’ SUCCESS Understand the market (Research) Focus on Core business Have the right Leadership in place Setup Proper Legal Entity Have the right vision and plan Invest appropriately Choose the right partners

14. FUNDING ALWAYS AN IMPORTANT FACTOR APEC may be able to asist through special funds in key areas as well as provide other incubation services

15. THANK YOU FOR YOUR ATTENTION! • China Offices: • Beijing Office • Suite 2002, Building 1 Blue Castle International Centre 3 Xi Dawang Road, Chaoyang District Beijing, 100026 China Tel: +86 10 6582 0268 Fax:+86 10 6582 0251 • Shanghai Office • Suite 603-605Oriental Center699 Nanjing West Road Shanghai, 200041 China • Tel: +86 21 5211 0068 • Fax:+86 21 5211 0069 Shanghai • Beijing • Boston • Milan info@jljgroup.com www.JLJGroup.com

16. Provide basic advice on various China-related issues such as: China market entry & growth strategies Regulatory updates relevant to foreign investments Market trends in key industries Share experience & expertise at events Contribute relevant articles to print/online publications Provide regular information and updates of developments in China Host delegations visiting China Launch joint research projects on specific topics/industries in China Coordinate meeting for trade missions or delegation … WHAT ELSE CAN WE DO? Examples

17. JLJ PARTNERED WITH SEVERAL CHAMBERS AND ORGANIZATION

18. Company’s Chinese Name Approval Stage I: • Licensing Approval to Establish Company Registration of Business License Filing and Carving Seals* Enterprise Code Certification** Stage II: • Post- Licensing Foreign Exchange Approval Registration with Tax Bureau Statistics Bureau Registration† Open RMB & Foreign Currency Bank Accounts Stage III: • Post-Capital Injection Capital Verification Update Business License *Official company stamps required for many business and banking transactions in China **Equivalent to a personal identification number for the licensed company • † This process can be completed at any stage following foreign exchange approval and registration with the tax bureau BUSINESS REGISTRATION FLOW CHART Corporate Formation

19. EMPLOYER REQUIRED TO PAY SOCIAL BENEFITS • Average salary of 2009 Beijing: RMB 4,037/month • The contribution cap base is 3 times the average salary – RMB12,111