Company: GLXG
Filing Date: 2025-10-24
Form Type: 20-F
Source: 0001213900-25-102144
Chunk: 3

Company: Galaxy Payroll Group Ltd
Filing Date: 2025-10-24
Form: 20-F
Item: Item 3
Chunk 3
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 no longer be permitted to continue
our current business operations.

There are uncertainties regarding the interpretation
and enforcement of PRC and Hong Kong laws, rules, and regulations.

A substantial amount of our
operations are conducted in Hong Kong, and are mainly governed by Hong Kong laws, rules, and regulations. The legal system in Hong Kong
is a common law system, based on a combination of English common law, local cases and local legislation. However, our subsidiaries located
in Hong Kong may become subject to laws, rules, and regulations applicable to foreign investment in China. The PRC legal system is a civil
law system based on written statutes. Unlike the common law system, prior court decisions may be cited for reference but have limited
precedential value. These laws and regulations are sometimes vague and may be subject to future changes, and their official interpretation
and enforcement could be unpredictable with little advance notice, which could result in a material change in our operations and/or the
value of our Ordinary Shares.

In 1979, the PRC government
began to promulgate a comprehensive system of laws, rules, and regulations governing economic matters in general. The overall effect of
legislation over the past three decades has significantly enhanced the protections afforded to various forms of foreign investment in
China. However, China has not developed a fully integrated legal system, and recently enacted laws, rules, and regulations may not sufficiently
cover all aspects of economic activities in China or may be subject to significant degrees of interpretation by PRC regulatory agencies.
In particular, because these laws, rules, and regulations are relatively new, and because of the limited number of published decisions
and the non-binding nature of such decisions, and because the laws, rules, and regulations often give the relevant regulator significant
discretion in how to enforce them, the interpretation and enforcement of these laws, rules, and regulations involve uncertainties and
can be inconsistent and unpredictable. In addition, the PRC legal system is based in part on government policies and internal rules, some
of which are not published on a timely basis or at all, and which may have a retroactive effect. As a result, we may not be aware of our
violation of these policies and rules until after the occurrence of the violation.

Any administrative and court
proceedings in China may be protracted, resulting in substantial costs and diversion of resources and management attention. Since PRC
administrative and court authorities have significant discretion in interpreting and implementing statutory and contractual terms, it
may