Company: ZDAN
Filing Date: 2025-06-30
Form Type: F-1
Source: 0001683168-25-004840
Chunk: 198

Company: Zerolimit Technology Holding Co. Ltd.
Filing Date: 2025-06-30
Form: F-1
Chunk 198
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 capital of the enterprises. Companies may, at their discretion, allocate a portion
of their after-tax profits based on PRC accounting standards to staff welfare and bonus funds. These reserves are not distributable as
cash dividends.

Regulations on Foreign Exchange Registration of Overseas Investment by PRC Residents

SAFE promulgated the Circular
on Relevant Issues Relating to Domestic Resident’s Investment and Financing and Roundtrip Investment through Special Purpose Vehicles
(“SAFE Circular 37”), in July 2014. SAFE Circular 37 requires PRC residents or entities to register with SAFE or its local
branches in connection with their establishment or control of an offshore entity established for the purpose of overseas investment or
financing. In addition, such PRC residents or entities must update their SAFE registrations when the offshore special purpose vehicle
undergoes material events relating to any change of basic information (including change of such PRC citizens or residents, names and
operation terms), increases or decreases in investment amount, transfers or exchanges of shares, or mergers or divisions.

SAFE Circular 37 was issued
to replace the Notice on Relevant Issues Concerning Foreign Exchange Administration for PRC Residents Engaging in Financing and Roundtrip
Investments via Overseas Special Purpose Vehicles (“SAFE Circular 75”), issued by SAFE in October 2005. SAFE further enacted
SAFE Circular 13, which allows PRC residents or entities to register with qualified banks in connection with their establishment or control
of an offshore entity established for the purpose of overseas investment or financing. However, remedial registration applications made
by PRC residents that previously failed to comply with SAFE Circular 37 continue to fall under the jurisdiction of the relevant local
branch of SAFE.

In the event that a PRC
shareholder holding interests in a special purpose vehicle fails to fulfill the required SAFE registration, the PRC subsidiaries of that
special purpose vehicle may be prohibited from distributing profits to the offshore parent and from carrying out subsequent cross-border
foreign exchange activities, and the special purpose vehicle may be restricted in its ability to contribute additional capital into its
PRC subsidiary. Failure to comply with the various SAFE registration requirements described above could result in liability under PRC
law for evasion of foreign exchange controls.

Regulations Relating to Tax in the PRC

Enterprise Income Tax

According to the
Enterprise Income Tax Law promulgated by the National People’s Congress in March 2007 and amended in February 2017
and December 2018, and the Implementation Rules of the Enterprise Income Tax