Company: NCL
Filing Date: 2025-01-29
Form Type: S-1/A
Source: 0001575872-25-000097
Chunk: 34

Company: Northann Corp.
Filing Date: 2025-01-29
Form: S-1/A
Chunk 34
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 Industry, Ringold and Marco if Benchwick) satisfies
the conditions prescribed in relevant tax rules and regulations and obtains the required approvals. However, if Benchwick is considered
a non-beneficial owner for purposes of the tax arrangement, any dividends paid to it by its PRC subsidiaries directly would not qualify
for the preferential dividend withholding tax rate of 5%, but rather would be subject to a rate of 10%.

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In addition, in response to the persistent capital
outflow and the Renminbi’s depreciation against the U.S. dollar in the fourth quarter of 2016, the People’s Bank of China
(“PBOC”) and the State Administration of Foreign Exchange, or SAFE, have implemented a series of capital control measures,
including stricter vetting procedures for China-based companies to remit foreign currency for overseas acquisitions, dividend payments
and shareholder loan repayments. The PRC government may continue to strengthen its capital controls and our PRC subsidiaries’ dividends
and other distributions may be subjected to tighter scrutiny in the future.

Risks Related to Doing Business in China

Changes in China’s political, economic or social conditions could have a material adverse effect on our business and operations.

Most of our products
are manufactured through NCP in China and as a result, our business, financial condition, results of operations, and prospects may be
influenced to a significant degree by political, economic and social conditions in China generally. The Chinese government plays a significant
role in regulating industry development by imposing industrial policies. The Chinese government also exercises significant control over
China’s economic growth by allocating resources, controlling payment of foreign currency-denominated obligations, setting monetary
policy, and providing preferential treatment to particular industries or companies.

While the Chinese economy
has experienced significant growth over the past decades, growth has been uneven, both geographically and among various sectors of the
economy. Any adverse changes of economic conditions in China, in the policies of the Chinese government, or in the laws and regulations
in China could have a material adverse effect on the overall economic growth of China. Such developments could adversely affect our business
and operating results, reduce production and weaken our competitive position. The Chinese government has implemented various measures
to encourage economic growth and guide the allocation of resources. Some of these measures may benefit the overall Chinese economy, but
may have a negative effect on us. For example, our financial condition and results of operations may be adversely affected by government
control over capital investments or changes