Company: FEBO
Filing Date: 2025-05-14
Form Type: 20-F
Source: 0001641172-25-010075
Chunk: 54

Company: Fenbo Holdings Ltd
Filing Date: 2025-05-14
Form: 20-F
Item: Item 3
Chunk 54
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 by us outside of the PRC involving PRC Taxable Assets to be subject to the foregoing
regulations, which may subject our Shareholders or us to additional PRC tax reporting obligations or tax liabilities.

We may be classified as a PRC resident enterprise
for PRC enterprise income tax purposes and be subject to PRC taxation on our worldwide income, which could result in unfavorable tax consequences
to us and our shareholders.

Under the EIT Law, if an enterprise
is established outside of the PRC with a “de facto management body” located within the PRC, such enterprise will be considered
a PRC tax resident enterprise for tax purposes. Under the regulation on the Implementation of the EIT Rules, the term “de facto
management body” is defined as a body that exercises full and substantial control over and overall management of the business, production,
personnel, accounts, and properties of an enterprise, so we may be considered a PRC resident enterprise by the PRC tax authorities and
will normally be subject to the enterprise income tax on our worldwide income at the rate of 25%. Please see “ Regulatory Environment”
in this Annual Report for further details.

It is unclear how the PRC tax
authorities will determine whether an offshore entity is a non-PRC resident enterprise. There is no assurance that PRC tax authorities
will not consider us as a “resident enterprise.” If the PRC tax authorities subsequently determine that we or our offshore
holding companies are deemed to be or should be classified as “resident enterprise(s),” such entity or entities may be subject
to enterprise income tax on their worldwide income at a rate of 25%, which could have a material and adverse impact on our financial condition
and results of operations.

The statement by the SEC regarding proposed
rule changes submitted by Nasdaq and an act passed by the U. S. Senate and the U. S. House of Representatives all call for additional and
more stringent criteria to be applied to emerging market companies. These developments could add uncertainties to our offering, business
operations, share price and reputation.

U. S. public companies that have
substantially all of their operations in China (including in Hong Kong) have been the subject of intense scrutiny, criticism, and negative
publicity by investors, financial commentators, and regulatory agencies, such as the SEC. Much of the scrutiny, criticism and negative
publicity has centered on financial and accounting irregularities and mistakes, a lack of effective internal controls over financial accounting,
in