Company: GURE
Filing Date: 2025-04-11
Form Type: 10-K
Source: 0001193805-25-000461
Chunk: 45

Company: GULF RESOURCES, INC.
Filing Date: 2025-04-11
Form: 10-K
Item: Item 1A
Chunk 45
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 incorporated.

24 

PRC regulation of
loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay
us from making loans or additional capital contributions to our PRC subsidiaries, which could materially and adversely affect our liquidity
and our ability to fund and expand our business.

Any funds
we transfer to our PRC subsidiaries, either as a shareholder loan or as an increase in registered capital, are subject to approval by
or registration with relevant governmental authorities in China. According to the relevant PRC regulations on foreign- invested enterprises,
or FIEs, in China, capital contributions to our PRC subsidiaries are subject to the approval of or filing with the Ministry of Commerce,
or MOFCOM or its local branches and registration with a local bank authorized by the State Administration of Foreign Exchange, or SAFE.
In addition, (i) a foreign loan of less one year duration procured by our PRC subsidiaries is required to be registered with SAFE or its
local branches and (ii) a foreign loan of one year duration or more procured by our PRC subsidiaries is required to be applied to the
National Development and Reform Commission, or NDRC, in advance for undergoing recordation registration formalities. Any medium or long-term
loan to be provided by us to our PRC operating subsidiaries, must be registered with the NDRC and the SAFE or its local branches. We may
not be able to complete such registrations on a timely basis, with respect to future capital contributions or foreign loans by us to our
PRC Subsidiary. If we fail to complete such registrations, our ability to capitalize our PRC operations may be negatively affected, which
could adversely affect our liquidity and our ability to fund and expand our business.

On March
30, 2015, the SAFE promulgated the Circular on Reforming the Management Approach Regarding the Foreign Exchange Capital Settlement of
Foreign-Invested Enterprises, or SAFE Circular 19, which took effect as of June 1, 2015. SAFE Circular 19 launched a nationwide reform
of the administration of the settlement of the foreign exchange capitals of FIEs and allows FIEs to settle their foreign exchange capital
at their discretion, but continues to prohibit FIEs from using the Renminbi fund converted from their foreign exchange capital for expenditure
beyond their business scopes, providing entrusted loans or repaying loans between nonfinancial enterprises. The SAFE issued the Circular
on Reforming and Regulating Policies on