Company: XHG
Filing Date: 2025-01-22
Form Type: 20-F
Source: 0001213900-25-005499
Chunk: 104

Company: XChange TEC.INC
Filing Date: 2025-01-22
Form: 20-F
Item: Item 4
Chunk 104
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 offshore
assets or interests, referred to in this circular as a “special purpose vehicle”. Under Circular 37, the term “ PRC
institutions” refers to entities with legal person status or other economic organizations established within the territory of the
PRC. The term “ PRC individual residents” includes all PRC citizens (also including PRC citizens abroad) and foreigners who
habitually reside in the PRC for economic benefit. A registered special purpose vehicle is required to amend its SAFE registration or
file with respect to such vehicle in connection with any change of basic information including PRC individual resident shareholder, name,
term of operation, or PRC individual resident’s increase or decrease of capital, transfer or exchange of shares, merger, division
or other material changes. In addition, if a non-listed special purpose vehicle grants any equity incentives to directors, supervisors
or employees of domestic companies under its direct or indirect control, the relevant PRC individual residents could register with the
local SAFE branch before exercising such options. The SAFE simultaneously issued a series of guidance to its local branches with respect
to the implementation of Circular 37. Under Circular 37, failure to comply with the foreign exchange registration procedures may result
in restrictions being imposed on the foreign exchange activities of the relevant onshore company, including restrictions on the payment
of dividends and other distributions to its offshore parent company and the capital inflow from the offshore entity, and may also subject
the relevant PRC residents and onshore company to penalties under the PRC foreign exchange administration regulations.

On February 15, 2012, SAFE issued the Notice
of the State Administration of Foreign Exchange on Issues concerning the Foreign Exchange Administration of Domestic Individuals’
Participation in Equity Incentive Plans of Overseas Listed Companies, or the Circular 7, which replaced the Application Procedures of
Foreign Exchange Administration for Domestic Individuals Participating in Employee Stock Ownership Plans or Stock Option Plans of Overseas
Publicly-listed Companies issued by SAFE on March 28, 2007. Under the Circular 7, a PRC entity’s directors, supervisors, senior
management officers, other staff or individuals who have an employment or labor relationship with a Chinese entity and are granted stock
options by an overseas publicly-listed company are required, through a qualified PRC domestic agent which could be a PRC subsidiary of
such overseas publicly-listed company, to register with SAFE and complete certain other procedures. Such PRC resident participants must
also retain an overseas entrusted institution to handle