Company: NCL
Filing Date: 2025-01-14
Form Type: S-1/A
Source: 0001575872-25-000059
Chunk: 35

Company: Northann Corp.
Filing Date: 2025-01-14
Form: S-1/A
Chunk 35
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 foreign investment information with the Ministry of Commerce
of the PRC (the “MOFCOM”), or registration with other governmental authorities in China.

| 15 |

On March 30, 2015, SAFE issued the Notice
of the State Administration of Foreign Exchange on Reforming the Administrative Approach Regarding the Settlement of the Foreign Exchange
Capital of Foreign-invested Enterprises, or “SAFE Circular 19,” which took effect and replaced previous regulations effective
on June 1, 2015, and was amended on December 30, 2019. Pursuant to SAFE Circular 19, up to 100% of foreign currency capital
of a foreign-invested enterprise may be converted into RMB capital according to the actual operation, and within the business scope,
of the enterprise at its will. Although SAFE Circular 19 allows for the use of RMB converted from the foreign currency-denominated capital
for equity investments in the PRC, the restrictions continue to apply as to foreign-invested enterprises’ use of the converted
RMB for purposes beyond their business scope, for entrusted loans or for inter-company RMB loans. On June 9, 2016, SAFE promulgated
the Notice of the State Administration of Foreign Exchange on Reforming and Standardizing the Foreign Exchange Settlement Management Policy
of Capital Account, or “SAFE Circular 16,” effective on June 9, 2016, which reiterates some rules set forth in SAFE Circular 19,
but changes the prohibition against using RMB capital converted from foreign currency-denominated registered capital of a foreign-invested company
to issue RMB entrusted loans to a prohibition against using such capital to issue loans to non-affiliated enterprises. SAFE Circular
19 and SAFE Circular 16 may significantly limit our ability to transfer any foreign currency we hold, including the net proceeds from
our offshore offerings, to the PRC subsidiaries, which may adversely affect our liquidity and our ability to fund and expand our business
in China. On October 23, 2019, SAFE issued the Notice of the State Administration of Foreign Exchange on Further Facilitating Cross-border Trade
and Investment, or “SAFE Circular 28,” which, among other things, expanded the use of foreign exchange capital to domestic
equity investment area. Non-investment foreign-funded enterprises are allowed to lawfully make domestic equity investments by
using their capital on the premise without violation to prevailing Special Administrative Measures for Access of Foreign Investments (Edition
2021), or the “Negative List,”