Company: DDC
Filing Date: 2025-07-22
Form Type: F-3
Source: 0001213900-25-066342
Chunk: 132

Company: DDC Enterprise Ltd
Filing Date: 2025-07-22
Form: F-3
Chunk 132
---
 case of dividends may be withheld at
source) at a rate of 20%. Any PRC tax liability may be reduced by an applicable tax treaty. However, if we or our subsidiary established
outside China are considered a PRC resident enterprise, it is unclear whether holders of the Class A Ordinary Shares would be able to
claim the benefit of income tax treaties or agreements entered into between China and other countries or areas. If dividends paid to our
non-PRC investors, or gains from the transfer of the Class A Ordinary Shares by such investors, are deemed as income derived from sources
within the PRC and thus are subject to PRC tax, the value of your investment in the Class A Ordinary Shares may decline significantly.

<div align='center'>71</div>

We are a holding company and we rely on our subsidiaries for funding dividend payments, which are subject to restrictions under PRC laws.

We are a holding company incorporated
in the Cayman Islands, and we operate our core businesses through our subsidiaries in the PRC, Hong Kong and the United States. Therefore,
the availability of funds for us to pay dividends to our shareholders and to service our indebtedness depends upon dividends received
from our subsidiaries. If our subsidiaries incur debt or losses, their ability to pay dividends or other distributions to us may be impaired.
As a result, our ability to pay dividends and to repay our indebtedness will be restricted. Our PRC subsidiaries are required to set aside
at least 10% of its accumulated after-tax profits each year, if any, to fund a certain statutory reserve fund, until the aggregate amount
of such fund reaches 50% of its registered capital. Such reserve funds cannot be distributed to us as dividends. In addition, restrictive
covenants in bank credit facilities or other agreements that we or our Affiliated Entities may enter into in the future may also restrict
the ability of our Affiliated Entities to pay dividends to us. These restrictions on the availability of our funding may impact our ability
to pay dividends to our shareholders and to service our indebtedness.

Increases in labor costs in the PRC may adversely affect our business and results of operations.

The currently effective PRC
Labor Contract Law, or the Labor Contract Law, was first adopted on June 29, 2007 and later amended on December 28, 2012. The
PRC Labor Contract Law has reinforced the protection of employees who, under the Labor Contract Law, have the right, among others, to
have written employment contracts