Company: RETO
Filing Date: 2025-10-24
Form Type: 424B5
Source: 0001213900-25-102262
Chunk: 96

Company: ReTo Eco-Solutions, Inc.
Filing Date: 2025-10-24
Form: 424B5
Chunk 96
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 PRC subsidiaries subject to the approval from governmental authorities and limitation of amount, or ReTo may make additional capital contributions to its PRC subsidiaries. Furthermore, loans by ReTo to its PRC subsidiaries to finance their activities cannot exceed the difference between their respective total project investment amount and registered capital or 2.5 times of their net worth and capital contributions to its PRC subsidiaries are subject to the requirement of making necessary filings in the Foreign Investment Comprehensive Management Information System and registration with other governmental authorities in China. The SAFE promulgated the Notice of the State Administration of Foreign Exchange on Reforming the Administration of Foreign Exchange Settlement of Capital of Foreign -investedEnterprises, or SAFE Circular19, effective on June 1, 2015, in replacement of the Circular on the Relevant Operating Issues Concerning the Improvement of the Administration of the Payment and Settlement of Foreign Currency Capital of Foreign -InvestedEnterprises, the Notice from the State Administration of Foreign Exchange on Relevant Issues Concerning Strengthening the Administration of Foreign Exchange Businesses, and the Circular on Further Clarification and Regulation of the Issues Concerning the Administration of Certain Capital Account Foreign Exchange Businesses. According to SAFE Circular19, the flow and use of the RMB capital converted from foreign currency -denominatedregistered capital of a foreign -investedcompany is regulated such that RMB capital may not be used for the issuance of RMB entrusted loans, the repayment of inter -enterpriseloans or the repayment of bank loans that have been transferred to a third party. Although SAFE Circular 19 allows RMB capital converted from foreign currency -denominatedregistered capital of a foreign -investedenterprise to be used for equity investments within mainland China, it also reiterates the principle that RMB converted from the foreign currency -denominatedcapital of a foreign -investedcompany may not be directly or indirectly used for purposes beyond its business scope. Thus, it is unclear whether the SAFE will permit such capital to be used for equity investments in mainland China in actual practice. The 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 Circular16, effective on June 9, 2016, which reiterates some of the rules set forth in SAFE Circular19, but changes the prohibition against using RMB capital converted from foreign currency -denominatedregistered capital of a foreign -investedcompany to issue RMB entrusted loans to a prohibition against using such capital to grant loans to non -