This document summarizes the legal perspectives on foreign investments in PRC real property based on different players and scenarios. It discusses the regulated environment in China and restrictions based on the investor status, property type, and intended use. Key questions for investors regarding regulations on purchasing, financing, holding and taxes are also addressed for different types of investors, including individual residence purchasers, investors in additional units, corporations, and developers.

1. Foreign Investments in PRC Real Property – A Legal Perspective John Y. Lo March 24, 2010 05/05/10

6. (1) Individual Investors Acquiring a Personal Residence 05/05/10

14. (2) Individuals to Invest in Additional Residential Units 05/05/10

20. (3) Individuals Investing in Commercial Property 05/05/10

23. (4) Corporations with Business Operations 05/05/10

26. (5) Corporate Investors to Acquire Property 05/05/10

28. 05/05/10 Before Circular 171 After Circular 171 Offshore SPV Real Property PRC Rental income Offshore SPV Real Property FIE Dividend Rental income

29. Key Circulars at a Glance 05/05/10 Issue Date Key Issues Circular # 12 July 2006 Foreign investors need to hold property via “ commercial e xistence” in China Distinction between self-use and non-self-use properties Restrictions on FIRPE 171 1 Sept 2006 SAFE tightens FX approval for FIE/foreign individuals/FIRPE 47 23 May 2007 Foreign investors need a project to establish FIRPE 50 10 July 2007 FIRPE established after 1 June 2007 cannot borrow foreign debt 130 1 July 2008 P ower to verify foreign-invested RE projects delegated to provincial level authority 23

35. (6) Developers 05/05/10

38. THANK YOU. Questions & Comments John Y. Lo [email_address]