Company: XTKG
Filing Date: 2025-04-25
Form Type: 20-F
Source: 0001213900-25-035626
Chunk: 107

Company: X3 Holdings Co., Ltd.
Filing Date: 2025-04-25
Form: 20-F
Item: Item 4
Chunk 107
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 requirements. By contrast, approval from or registration with appropriate governmental authorities
is required where Renminbi is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment
of foreign currency-denominated loans.

On March 30, 2015, SAFE issued
the Circular of the State Administration of Foreign Exchange on Reforming the Management Approach regarding the Settlement of Foreign
Exchange Capital of Foreign-invested Enterprises, or SAFE Circular 19. Pursuant to SAFE Circular 19, the foreign exchange capital of foreign-invested
enterprises is subject to the discretional foreign exchange settlement, which means the foreign exchange capital in the capital account
of foreign-invested enterprises upon the confirmation of rights and interests of monetary contribution by the local foreign exchange bureau
(or the book-entry registration of monetary contribution by the banks) may be settled at the banks based on the actual operation needs
of the enterprises. The proportion of discretionary settlement of foreign exchange capital of foreign-invested enterprises is currently
100%. SAFE can adjust such proportion in due time based on the circumstances of international balance of payments.

The dividends paid by the
subsidiaries to its shareholder are deemed shareholder income and are taxable in China. Pursuant to the Administration Rules of the Settlement,
Sale and Payment of Foreign Exchange (1996), foreign-invested enterprises in China may purchase or remit foreign exchange, subject to
a cap approved by SAFE, for settlement of current account transactions without the approval of SAFE. Foreign exchange transactions under
the capital account are still subject to limitations and require approvals from, or registration with, SAFE and other relevant PRC governmental
authorities.

Dividend Distribution. The principal regulations governing the distribution of dividends by foreign holding companies include the Company Law of the PRC (1993),
as amended in 2013, the Foreign Investment assets or interests to a SPV, but failed to complete foreign exchange registration of overseas
investments as required prior Enterprise Law (1986), as amended in 2016, and the Administrative Rules under the Foreign Investment Enterprise
Law (1990), as amended in 2001 and 2014 respectively.

Under these regulations, wholly
foreign-owned investment enterprises in China may pay dividends only out of their retained profits, if any, determined in accordance with
PRC accounting standards and regulations. In addition, wholly foreign-owned investment enterprises in China are required to allocate at
least 10% of their respective retained profits each year, if any, to fund certain reserve