Company: XHG
Filing Date: 2025-01-22
Form Type: 20-F
Source: 0001213900-25-005499
Chunk: 92

Company: XChange TEC.INC
Filing Date: 2025-01-22
Form: 20-F
Item: Item 4
Chunk 92
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Enterprise Law, together with their implementation rules and ancillary regulations, as the legal foundation for foreign investment in
the PRC. Generally speaking, the PRC Company Law or the PRC Partnership Law shall apply with respect to an FIE’s organization.
This is aimed to put an end to any discrepancy between the Three FIE Laws and the Company Law.

The Foreign Investment Law mainly stipulates
four forms of foreign investors, which includes: (a) a foreign investor, individually or collectively with other investors, establishes
a foreign-invested enterprise within PRC; (b) a foreign investor acquires stock shares, equity shares, interests in assets, or other
like rights and interests of an enterprise within PRC; (c) a foreign investor, individually or collectively with other investors, invests
in a new project within PRC; and (d) foreign investors invest in China through any other methods under laws, administrative regulations,
or provisions prescribed by the State Council. Compared with the Three FIE Laws, the Foreign Investment Law is profoundly different in
the following aspects:

  Application of a pre-establishment national treatment.                                                                                     

  Application of an updated Investment Management. Pursuant                                                                                   

In addition, the Foreign Investment Law also
provides several protective rules and principles for foreign investors and their investments in the PRC, including, among others, that
local governments shall abide by their policy commitments to the foreign investors and perform all contracts entered into in accordance
with the law; foreign-invested enterprises are allowed to issue stocks and corporate bonds; except for special circumstances, in which
case statutory procedures shall be followed and fair and reasonable compensation shall be made in a timely manner, expropriate or requisition
the investment of foreign investors is prohibited; mandatory technology transfer is prohibited; foreign investors’ funds are allowed
to be freely transferred out and into the territory of PRC, which run through the entire lifecycle from the entry to the exit of foreign
investment; and providing an all-around and multi-angle system to guarantee fair competition of foreign-invested enterprises in the market
economy. Furthermore, the Foreign Investment Law provides that foreign-invested enterprises established according to the existing laws
regulating foreign investment may maintain their structure and corporate governance within five years after the implementation of the
Foreign Investment Law, which means that foreign-invested enterprises may be required to adjust the structure and corporate governance
in accordance with the current PRC Company Law and other laws and regulations governing the corporate governance.

On