Company: FEBO
Filing Date: 2025-05-14
Form Type: 20-F
Source: 0001641172-25-010075
Chunk: 86

Company: Fenbo Holdings Ltd
Filing Date: 2025-05-14
Form: 20-F
Item: Item 4
Chunk 86
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 PRC. No approval from the SAFE is required for opening the foreign exchange accounts, payment into certain accounts, settlement
of the foreign exchange and for the purchase and external payment of foreign exchange. Also, the transfer of foreign exchange in the PRC
under a direct investment account is no longer subject to approval by the SAFE. In addition, the foreign-invested enterprises are permitted
to remit funds to their offshore parent companies.

  53  

According to the Notice on Further
Simplifying and Improving the Policies of Foreign Exchange Administration Applicable to Direct Investment, verification, and approval
of foreign exchange registration under domestic direct investment is abolished. The banks shall, in accordance with relevant guidance,
directly examine and handle foreign exchange registration under domestic direct investment. Relevant entities may, at their discretion,
choose the banks in their respective places of registration to go through foreign exchange registration of direct investment, and may
handle subsequent formalities for opening relevant accounts, fund exchange and other services (including the outflow or inflow of profits
and dividends) under direct investment only after foreign exchange registration of direct investment is completed.

Dividend Distribution

The principal laws and regulations
governing dividend distribution of foreign holding companies include the PRC Company Law, the FIE Law and their implementation rules.
Under these laws and regulations, foreign-invested enterprises in the PRC may pay dividends only out of their after-tax profits, if any,
determined in accordance with PRC accounting standards and regulations. In addition, wholly foreign-owned enterprises in the PRC must
allocate at least 10% of their accumulated profits after tax each year, if any, to fund certain reserve funds unless these accumulated
reserves have reached 50% of their registered capital. These reserves are not distributable as cash dividends.

Laws and Regulations Relating
to Taxation in the PRC

Enterprise Income Tax. Pursuant to the Enterprise Income Tax Law of the PRC (the “ EIT Law”), the income tax rate for both resident enterprises
and foreign-invested enterprises is 25% commencing from January 1, 2008 (with certain exceptions for qualified foreign-invested enterprises).
In order to clarify certain provisions in the EIT Law, the State Council promulgated the Implementation Rules of the Enterprise Income
Tax Law of the PRC (the “ EIT Implementation Rules”). Pursuant to the EIT Law and the EIT Implementation Rules, non-resident
enterprises which have not established agencies or offices