Interview Report Summary (Jul 15-Jul 21, 2006)

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Officers in HK:                         Mdm. J. Le Roux

Assets

The PA mentioned that he has another bank account with small balance (RMB10,000) for receiving his monthly salary payment.  The officer did not seem to mind.

The PA talked about land bought (how much) and then building constructed above (cost RMB 2.8M).  The PA did receive rental income (property that used for company staff quarters) but no taxes paid on rental income.

Management Experience

Despite some tough questions from the officer, the PA answered fairly well (the costs, manpower involved in projects) and seemed to satisfy the officer.

The PA ran a retail store for 10 years (made RMB 200,000) him/herself but was then hired as GM in another company.  The PA did a good job explaining how he/she met the investor, i.e. the chairman who is the legal rep.  However, when the officer asked what the company does, the PA answered so shortly.  The officer had to ask for more details.  The officer asked for the organization chart to show where the chairman is in the chart.

The officer asked the PA to describe one day work.  Good description with sufficient details is given.

The officer asked the recent problem that the PA had to settle.  Again, explained well.

Proof of Income

The officer wanted to see proof of personal bank account the historic record that the PA received money (RMB 11M) from the sale of shares.

The PA was prepared the day before how to present the proof of employment income.  The PA did it correctly in the interview.  The officer asked for the old bank passbooks.  The PA explained that money was deposited under the spouse’s name in the past.  Since the PA deposited money under spouse’s name, the officer needed to think about it and might ask for additional document to reassure the employment income received.

Tax (focus on Enterprise Income Tax EIT)

Tax is the main issue because the tax receipts did not match with the figures in the audit report (over 30 minutes of discussion and probably the officer does not have a good knowledge of business world in China especially).  The PA indicated that he has a favorable fiscal benefit and offered to provide official document to prove it.  The officer also asked PA to show Sales Tax and VAT receipts.  The PA did not bring them but could provide them without difficulty after interview.

The officer questioned on the EIT of the wholly foreign owned company (% is different from local company).  The PA and lawyer had worked hard on this issue the day before.  The PA was very good to explain the company tax situation and original tax receipts shown.

Misc.

In addition to the usual 08h30 and 10h00 interview, it is noticed that some other interview time, e.g. 09h00, 13h30, 14h00, 15h00 after mid Sep 2006.

The PA is asked to submit after the interview the booklet of IPO of the company bearing the name of the PA and showing that the company has participated in two other companies.

The officer questions about the PA’s residency with another country.  The PA answered correctly.

The officer asked the PA to confirm the name of the consultant in the interview.

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