PROVISIONS FOR ENCOURAGING DOMESTIC AND FOREIGN INVESTMENTS IN TIBET

These Provisions are formulated for attracting domestic and foreign investments to speed up economic development in Tibet.

   Article 1. The Autonomous Region encourages domestic and foreign businesses, companies, other economic organizations, or individuals (hereinafter
referred to as “businessmen”) to make investments in Tibet to start economic entities or various economic and social undertakings.

   Article 2. The Autonomous Region shall protect the legitimate rights and interests of businessmen according to law. Assets set up by businessmen
shall not be nationalized. When the assets are to be conceded to the State by the businessmen, or have to be expropriated by the
State according to public interests, legal procedures shall be followed with corresponding compensation given.

   Article 3. Investments to Tibet can be made in the following forms without any restriction in areas, departments and trades:

(1) Joint equity, cooperative, solely funded ventures or other types of businesses allowed by law.

Terms of operation, proportions of investment, and the form of joint operation shall be determined in contracts of both sides approval
by departments in charge.

(2) Purchases of stocks and bonds.

(3) Participation in operation by sharing of capital, contracting or leasing.

(4) Technical cooperation, transfer, and contracting.

(5) Compensation trade, processing and assembling with supplied materials, and co-production.

(6) Purchase of real estates and development of land through land leasing.

(7) Coop with businesses of the Autonomous Region to run joint equity or cooperative ventures in China’s special economic zones, open
cities, economic and technological development areas, and inland provinces and cities, as well as in places abroad.

(8) Other conventional forms of business at home and abroad.

   Article 4. Projects funded by domestic and foreign businessmen in Tibet shall be given priority for planning approval, supporting funds, starting
construction, setting up of enterprises, and registration.

   Article 5. On the principle of separating the ownership of land from the right to use land, the Region shall sell the land-use right to businessmen,
who can also use State land in the Region in other ways.

(1) The term of land use is 50-70 years. Prices for land-use shall be set at preferential terms.

(2) The Tibetan partner in a joint equity or cooperative venture, or in other joint operation can use their original right of land
use as investment or share.

(3) Solely-funded enterprises in the Region with an operation term of 10 years or more use State land in the Region, shall be exempted
from urban land-use tax or farmland-occupation tax in the construction period approved. The enterprises shall pay half the land-use
tax in the eight years after their starting operation. Enterprises that have an operation term of less than 10 years shall be exempted
from land-use tax for use of farmland and, in the construction period, from urban land-use tax.

(4) When joint equity or cooperative ventures or other joint operations use the site of a business in the Region to build a project
or use new State land with approval to do so, it shall be exempted from urban land-use tax and farmland-occupation tax in the construction
period approved. They shall be exempted from land-use tax for eight years after their starting operation.

(5) Enterprises funded by businessmen to engage in production shall enjoy preferential treatment in land-use charges.

   Article 6. Businessmen can develop mineral resources in the Region with payment according to law. Except for special mineral resources stipulated
by the State, businessmen can establish joint equity, cooperative or solely-funded ventures to explore and exploit mineral resources
in the Region with the approval of the Regional People’s Government.

   Article 7. Beginning from the profit-making year, industrial enterprises funded by businessmen shall pay 10% income tax for their operation.
They shall be exempted from local income tax. Enterprises that engage in the following operations shall enjoy further preference:

(1) Enterprises with an operation term of 10 years or more that engage in energy, transportation, agriculture or animal husbandry
shall be exempted from income tax in the first five profit-making years and pay half the income tax in the following three years.

(2) Enterprises with an operation term of 10 years or more that engage in processing animal by-products and native and special produce,
or in national handicrafts, or tourist merchandise, or other processing industries, shall be exempted from income tax in the first
four profit-making years and pay half the income tax in the following two years.

(3) Enterprises engaging in tourism that have an investment topping US$5 million or RMB30 million each and an operation term of 10
years or more shall be exempted from income tax in the first three profit-making years and pay half the income tax in the fourth
year. Those that are not up to the above standards shall be exempted from income tax in the first two profit-making years and pay
half the income tax in the third year.

   Article 8. Businessmen who do not set up any entity in the Region but receive dividends, interests, rent, charges of using special rights, or
other income from the Region shall pay income tax at a rate of 20%, except those who are exempted from income tax according to law.

   Article 9. Businessmen who earn profits from enterprises in the Region but make new investment in other projects or in expanded reproduction
with an operation term of not less than five years, shall have all their income tax already paid for that part of profit that is
used as new investment refunded.

   Article 10. For other taxes other than income tax businessmen shall pay as or according to similar trade in the Region. They are allowed to pay
taxes in RMB.

   Article 11. When businessmen remit their profits from China or when foreign workers and staff members remit their personal income, they shall
be exempted from tax for the remittance.

   Article 12. All joint equity or cooperative ventures or other joint operations shall enjoy the above-mentioned tax-reduction and tax-free treatment,
Besides, those enterprises that export 50% of their annual output (sales amount) or more shall pay half the income tax that year.

   Article 13. Joint equity or cooperative ventures or other joint operations shall first receive their profits, then pay tax. In the final distribution,
the share of profit by the businessmen can be higher than their share of investment. The specific proportions of sharing shall be
clearly defined in their contracts. This principle holds true for the distribution of profits in foreign exchange.

   Article 14. For joint ventures established in the Region by businesses in other parts of China, gross output values shared by such businesses
can be accounted for by the localities where they come from. In the case, the businesses shall pay their income tax on their profits
to the people’s government of the localities concerned. According to negotiations between various parties or mutual-benefit contracts
between provinces, the financial department of the Region can refund a proportion of the circulation tax on the businessmen to the
financial department of their original localities.

   Article 15. Productive enterprises in Tibet established by businessmen and enterprises specified by Article 3 (7) of these provisions shall enjoy
same preference of similar enterprises in the Region.

(1) They shall obtain loans from banks in the Region according to same conditions. They shall enjoy the unified interest rate of the
Region.

(2) They shall be given equal priority for the supply for fuel, power, raw and semi-finished materials, and subsidiary materials and
for prices.

(3) The related department shall provide convenience for the sale of their products inside and outside the Region. They can also entrust
commercial departments in the Region with the sales.

(4) When they export their products, they shall enjoy foreign trade preferential treatment as do similar enterprises in the Region,
except for products specially stipulated by the State.

(5) Solely-funded and joint operated enterprises can take part in border trade between Tibet and neighboring countries and enjoy relevant
preferential treatment.

(6) Business operators shall enjoy full decision-making power in operation.

(7) They shall enjoy other preferential treatment in production and operation.

   Article 16. When businessmen import machinery, equipment, building materials, spare parts, components, and devices within the total investment
for the construction of their enterprises, they shall be exempted from import duty and industrial and commercial consolidated tax.

When businessmen import a reasonable amount of articles, for office or home use, or self-use motor vehicles, they shall be exempted
from import duty and industrial and commercial consolidated tax. Under the supervision of the Customs, they need not apply for an
import permit.

When businessmen import raw and semi-finished materials, subsidiary materials, packaging materials, spare parts, components, and devices
(hereinafter referred to as “materials and devices”) for production and export all the processed products, they shall be exempted
from import duty and industrial and commercial tax. Those who export part of their products shall be exempted from the import duty
and industrial and commercial tax imposed on the materials and devices involved. For the products sold at home, they shall pay half
the import duty and industrial and commercial tax on materials and devices.

   Article 17. Businessmen can entrust the assets of their solely-funded or joint operated in Tibet to their relative or friends in China who hold
a trust deed of legal validity. Or they can transfer or bequeath their assets and assign 3-5 relatives to work in the business, who
are allowed to move their residence from rural areas and settle in the area where the enterprise is.

   Article 18. The depreciation rate of fixed assets of enterprises in Tibet funded by businessmen can be increased by 5-10% on the current basis
stipulated by the State, with the approval of the local financial departments.

   Article 19. Businessmen can make a choice from among projects published by the related departments of the Regional government or government at
lower levels, then invest in them. Or they can propose other projects and apply to the related departments of the local government.

   Article 20. Overseas technical and managerial personnel employed by businessmen can apply for multiple entry and exit permits.

   Article 21. Should disputed arise about contracts or in execution of contracts, the disputing parties shall try to settle the disputes through
consultation. If the disputing parties do not want to consult or consultation fails, businessmen can apply to the Regional Trade
Arbitration Commission for a settlement. Or, with the agreement of all parties, they can apply to an arbitration organ outside the
Region, or a national arbitration organ, or an international arbitration organization.

   Article 22. Those who recommend investors to Tibet shall be awarded, no matter they are Chinese citizens, overseas Chinese (including Tibetans
abroad), Hong Kong and Macao compatriots, or foreign friends, provided they are not investors, project decision-makers, or assigned
introducers who are awarded introducing charges. The benefited unit shall award the recommender 3% of an investment of less than
RMB1,000,000 or US$200,000 and 5% of an investment more than that. The recommender shall be exempted from personal income tax for
the reward.

   Article 23. Chinese and foreign personages who help Tibet develop its economy and social undertakings free of charge shall receive an honorary
certificate from the People’s Government of the Tibet Autonomous Region. For those who help build major projects, the Regional government
shall report to the Chinese State Council and obtain its approval for the State to award them an honorary certificate and for establishing
a permanent memorial symbol in Tibet.