Company: ZDAN
Filing Date: 2025-07-28
Form Type: F-1/A
Source: 0001683168-25-005450
Chunk: 34

Company: Zerolimit Technology Holding Co. Ltd.
Filing Date: 2025-07-28
Form: F-1/A
Chunk 34
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E to HK Zerolimit, and finally to the Company as dividends. Certain payments from the VIE to WFOE are subject to PRC
taxes, including VAT.

Pursuant to the Arrangement
between Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income,
or the Double Tax Avoidance Arrangement, the 10% withholding tax rate may be lowered to 5% if a Hong Kong resident enterprise owns no
less than 25% of a mainland China project. However, the 5% withholding tax rate does not automatically apply and certain requirements
must be satisfied, including without limitation that: (a) the Hong Kong project must be the beneficial owner of the relevant dividends;
and (b) the Hong Kong project must directly hold no less than 25% share ownership in mainland China project during the 12 consecutive months
immediately preceding its receipt of the dividends. In current practice, a Hong Kong project must obtain a tax resident certificate from
the Hong Kong tax authority to apply for the 5% lower PRC withholding tax rate. As the Hong Kong tax authority will issue such a tax resident
certificate on a case-by-case basis, we cannot assure you that we will be able to obtain the tax resident certificate from the relevant
Hong Kong tax authority and enjoy the preferential withholding tax rate of 5% under the Double Taxation Arrangement with respect to dividends
to be paid by WFOE to HK Zerolimit. As of the date of this prospectus, we have not applied for the tax resident certificate from the relevant
Hong Kong tax authority. HK Zerolimit intends to apply for the tax resident certificate when WFOE plans to declare and pay dividends to
HK Zerolimit. See “Risk Factors — Risks Related to Doing Business in the PRC— We may rely on dividends and other distributions on equity paid by WFOE to fund any cash and financing requirements we may have, and any limitation on the ability of WFOE to make payments to us and any tax we are required to pay could have a material adverse effect on our ability to conduct our business.”

Further Description of Cash Transfers

The Company’s management
team monitors the cash position of each entity within its organization on a regular basis and also prepares budgets on a monthly basis
to ensure that each entity has the necessary funds to fulfill its obligations for the foreseeable future and to ensure adequate liquidity.
As a