Company: SDAWW
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001213900-25-036086
Chunk: 54

Company: SunCar Technology Group Inc.
Filing Date: 2025-04-28
Form: 20-F
Item: Item 3
Chunk 54
---
ufficiency of foreign exchange may restrict our ability
to obtain sufficient foreign exchange for dividend payments to investors of our Ordinary Shares or to satisfy any other foreign exchange
requirements.

It may be difficult for overseas regulators
to conduct investigation or collect evidence within China.

Shareholder claims or regulatory
investigations that are common in the United States generally are difficult to pursue as a matter of law or practicality in China. For
example, in China, there are significant legal and other obstacles in providing information needed for regulatory investigations or litigation
initiated outside China. Although the authorities in China may establish a regulatory cooperation mechanism with the securities regulatory
authorities of another country or region to implement cross-border supervision and administration, such cooperation with the securities
regulatory authorities in the Unities States may not be efficient in the absence of a mutual and practical cooperation mechanism. Furthermore,
according to Article 177 of the PRC Securities Law, or Article 177, which became effective in March 2020, no overseas securities regulator
is allowed to directly conduct investigation or evidence collection activities within the territory of the PRC. While detailed interpretation
or implementation of rules under Article 177 have yet to be promulgated, the inability for an overseas securities regulator to directly
conduct investigation or evidence collection activities within China may further increase difficulties faced by you in protecting your
interests.

If SunCar is classified as a PRC resident
enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders
and ordinary shareholders.

Under the PRC Enterprise Income
Tax Law and its implementation rules, an enterprise established outside of the PRC with “de facto management body” within
China is considered a “resident enterprise” and will be subject to the enterprise income tax on its global income at the rate
of 25%. The implementation rules define the term “de facto management body” as the body that exercises full and substantial
control and overall management over the business, productions, personnel, accounts and properties of an enterprise. In 2009, the State
Administration of Taxation, or SAT, issued the Circular of the State Administration of Taxation on Issues Relating to Identification of
PRC-Controlled Overseas Registered Enterprises as Resident Enterprises in Accordance with the De Facto Standards of Organizational Management,
or SAT Circular 82, which provides certain specific criteria for determining whether the “de facto management body” of a PRC-controlled
enterprise that is incorporated offshore is located in China.