Company: CAAS
Filing Date: 2025-07-25
Form Type: F-4/A
Source: 0001104659-25-070492
Chunk: 52

Company: China Automotive Systems, Inc.
Filing Date: 2025-07-25
Form: F-4/A
Chunk 52
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 Stock Incentive Plan of Overseas Publicly Listed
Company, replacing earlier rules promulgated in 2007. Pursuant to these rules, PRC citizens and non-PRC citizens who reside in China
for a continuous period of not less than one year and participate in any stock incentive plan of an overseas publicly listed company,
subject to a few exceptions, are required to register with SAFE through a domestic qualified agent, which could be the mainland China
subsidiaries of such overseas-listed company, and complete certain other procedures. In addition, an overseas-entrusted institution must
be retained to handle matters in connection with the exercise or sale of stock options and the purchase or sale of shares and interests.
As the Company is an oversea-listed company, its Chinese domestic directors and employees who are PRC citizens or who reside in China
for a continuous period of not less than one year and who may be granted share options or shares shall become subject to these regulations.
As of December 31, 2024, the Company has completed such SAFE registration and other related procedures according to PRC law. If the
Company or its Chinese domestic directors or employees fail to comply with these regulations in the future, the Company or its Chinese
domestic directors or employees may be subject to fines or other legal sanctions imposed by the SAFE or other Chinese government authorities.

In addition, the State Administration of Taxation,
or the SAT has issued certain circulars concerning employee share options. Under these circulars, our Chinese domestic employees who exercise
share options will be subject to PRC individual income tax. Our China-based subsidiaries have obligations to file documents related to
employee share options with tax authorities and to withhold individual income taxes of those employees who exercise their share options.
If our Chinese domestic employees fail to pay or we fail to withhold their income taxes according to laws and regulations, we may face
sanctions imposed by the tax authorities or other PRC government authorities.

Capital outflow policies in China may hamper the Company’s ability to declare and pay dividends to its stockholders.

China has adopted currency and capital transfer
regulations. These regulations may require the Company to comply with complex regulations for the movement of capital. Although the Company’s
management believes that it will be in compliance with these regulations, should these regulations or the interpretation of them by courts
or regulatory agencies change, the Company may not be able to pay dividends to its stockholders outside of China. In addition, under current
Chinese law, the Company’s joint