Company: LICN
Filing Date: 2025-04-29
Form Type: 20-F
Source: 0001213900-25-036244
Chunk: 3

Company: Lichen International Ltd
Filing Date: 2025-04-29
Form: 20-F
Item: Item 3
Chunk 3
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 to each other when necessary through the
way of current lending. The transfer of funds among companies are subject to the Provisions on Private Lending Cases, which was implemented
on August 20, 2020 to regulate the financing activities between natural persons, legal persons and unincorporated organizations. As advised
by our PRC counsel, Tianyuan Law Firm, the Provisions on Private Lending Cases does not prohibit using cash generated from one subsidiary
to fund another subsidiary’s operations. We have not been notified of any other restriction which could limit our PRC subsidiaries’
ability to transfer cash between PRC subsidiaries. The Company’s subsidiaries in the PRC have not transferred any earnings or cash
to the Company to date. As of the date of this report, there has not been any assets or cash transfer between the holding company and
its subsidiaries. As of the date of this report, there has not been any dividends or distributions made to US investors. The Company’s
business is primarily conducted through its subsidiaries. The Company is a holding company and its material assets consist solely of the
ownership interests held in its PRC subsidiaries. The Company relies on dividends paid by its subsidiaries for its working capital and
cash needs, including the funds necessary: (i) to pay dividends or cash distributions to its shareholders, (ii) to service any debt obligations
and (iii) to pay operating expenses. As a result of PRC laws and regulations (noted below) that require annual appropriations of 10% of
after-tax income to be set aside in a general reserve fund prior to payment of dividends, the Company’s PRC subsidiaries are restricted
in that respect, as well as in other respects noted below, in their ability to transfer a portion of their net assets to the Company as
a dividend.

With
respect to transferring cash from the Company to its subsidiaries, increasing the Company’s registered capital in a PRC subsidiary
requires the filing of the local commerce department, while a shareholder loan requires a filing with the State Administration of Foreign
Exchange or its local bureau. Aside from the declaration to the State Administration of Foreign Exchange, there is no restriction or limitations
on such cash transfer or earnings distribution.

With
respect to the payment of dividends, we note the following:

  PRC regulations currently permit the payment of dividends only out of accumulated profits, as determined in accordance with accounting standards and PRC regulations (an in-depth description of ...  

  Our PRC subsidiaries are required to set aside, at