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DNB Bank
DNB Shanghai Branch
Facts
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2010 2011 2012 2013 2014 2015 20160 %
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10 %
15 %
Trill
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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. [email protected] Web www.dnb.no
Corporate & EnergyMia LuoTel: +(86 21) 6132 [email protected]
Bing ZhaoTel. +(86 21) 6132 [email protected]
William SunTel. +(86 21) 6132 [email protected]
DNB MarketsCandice PuTel. +(86 21) 6391 [email protected]
General ManagerRudy Jean-Paul HassamTel. +(86 21) 6132 [email protected]