Company: GURE
Filing Date: 2025-04-11
Form Type: 10-K
Source: 0001193805-25-000461
Chunk: 44

Company: GULF RESOURCES, INC.
Filing Date: 2025-04-11
Form: 10-K
Item: Item 1A
Chunk 44
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 nationals. As a result, it may be difficult for our shareholders to effect service of process upon us
or those persons inside the PRC. In addition, the PRC does not have treaties providing for the reciprocal recognition and enforcement
of judgments of courts with the U.S. and many other countries and regions. Therefore, recognition and enforcement in the PRC of judgments
of a court in any of these non-PRC jurisdictions in relation to any matter not subject to a binding arbitration provision may be difficult
or impossible.

We may rely on dividends
and other distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements we may have, and any limitation
on the ability of our PRC subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business.

We rely principally
on dividends and other distributions on equity from our PRC subsidiaries for our cash requirements, including for services of any debt
we may incur.

Our PRC subsidiaries’
ability to distribute dividends is based upon their distributable earnings. Current PRC regulations permit our PRC subsidiaries to pay
dividends to their respective shareholders only out of their accumulated profits, if any, determined in accordance with PRC accounting
standards and regulations. In addition, each of our PRC subsidiaries, as a Foreign Invested Enterprise, or FIE, are required to draw 10%
of its after-tax profits each year, if any, to fund a common reserve, which may stop drawing its after tax profits if the aggregate balance
of the common reserve has already accounted for over 50 percent of its registered capital. These reserves are not distributable as cash
dividends. If our PRC subsidiaries incur debt on their own behalf in the future, the instruments governing the debt may restrict their
ability to pay dividends or make other payments to us. Any limitation on the ability of our PRC subsidiaries to distribute dividends or
other payments to their respective shareholders could materially and adversely limit our ability to grow, make investments or acquisitions
that could be beneficial to our business, pay dividends or otherwise fund and conduct our business.

In addition,
the Enterprise Income Tax Law and its implementation rules provide that a withholding tax rate of up to 10% will be applicable to dividends
payable by Chinese companies to non-PRC-resident enterprises unless otherwise exempted or reduced according to treaties or arrangements
between the PRC central government and governments of other countries or regions where the non-PRC resident enterprises are