Company: FEBO
Filing Date: 2025-05-14
Form Type: 20-F
Source: 0001641172-25-010075
Chunk: 2

Company: Fenbo Holdings Ltd
Filing Date: 2025-05-14
Form: 20-F
Item: Item 3
Chunk 2
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 of our Company. Our Board of Directors has complete discretion as to whether to distribute
dividends. In addition, our shareholders may by ordinary resolution declare a dividend, but no dividend may exceed the amount recommended
by our Board of Directors. In either case, all dividends are subject to certain restrictions under Cayman Islands law, namely, that the
Company may only pay dividends out of profits or share premium and provided that under no circumstances may a dividend be paid if this
would result in the Company being unable to pay its debts as they fall due in the ordinary course of business. The Cayman Islands does
not impose a withholding tax on payments of dividends to shareholders.

   5  

Under the Companies Ordinance
of Hong Kong, dividends may only be paid out of distributable profits (that is, accumulated realized profits less accumulated realized
losses) or other distributable reserves. Dividends cannot be paid out of share capital. There are no restrictions or limitation under
the laws of Hong Kong imposed on the conversion of HK dollars into foreign currencies and the remittance of currencies out of Hong Kong,
nor is there any restriction on foreign exchange to transfer cash between our Company and its subsidiaries, across borders and to U. S
investors, nor on distributing earnings from our Operating Subsidiaries’ businesses to our Company and U. S. investors and amounts
owed. Under the current practice of the Inland Revenue Department of Hong Kong, no tax is payable in Hong Kong in respect of dividends.

Under PRC laws, rules and regulations,
our PRC subsidiary is required to set aside at least 10% of its after-tax profits each year after making up for previous years’
accumulated losses, if any, to fund certain statutory reserves, until the aggregate amount of such fund reaches 50% of their registered
capital. As of December 31, 2024, these restricted assets totaled approximately HK$2,806,000 (US$361,000). However, there can be no assurance
that the PRC government will not intervene or impose restrictions on our ability to transfer or distribute cash within our organization
or to foreign investors, which could result in an inability or prohibition on making transfers or distributions outside of China and may
adversely affect our business, financial condition and results of operations.

Neither the Company nor any of
its Operating Subsidiaries has paid dividends or made distributions to U. S. investors. No funds have been transferred by the holding companies
to the Operating