Company: GDHLF
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001410578-25-000935
Chunk: 284

Company: GDS Holdings Ltd
Filing Date: 2025-04-28
Form: 20-F
Item: Item 5
Chunk 284
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 required where Renminbi is to be converted into foreign currency and remitted out of mainland China to pay capital expenses such as the repayment of loans denominated in foreign currencies. There is no requirement imposed on investors to complete registration or obtain approval from appropriate government authorities before they can receive dividend payments from GDS Holdings. See “ Item 3. Key Information - D. Risk Factors - Risks Related to Doing Business in the People’s Republic of China - Restrictions on currency exchange may limit our ability to utilize our net revenue effectively.” These statutory limitations affect, and future covenant debt limitations might affect, our mainland China subsidiaries’ ability to pay dividends to us.

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As of December 31, 2024, our cash and restricted cash were deposited in major financial institutions located in mainland China, Hong Kong, Macau, Singapore and the United States. We currently believe that such limitations on payment in foreign currencies will not impact our ability to meet our ongoing short-term cash obligations although we cannot assure you that such limitations will not affect our ability in the future to meet our short-term cash obligations and to distribute dividends to our shareholders. See “ Item 3. Key Information - D. Risk Factors - Risks Related to Doing Business in the People’s Republic of China - We rely to a significant extent on dividends and other distributions on equity paid by our principal operating subsidiaries to fund offshore cash and financing requirements” and “ - Statutory Reserves.”

We do not plan for our mainland China subsidiaries to pay dividends in the foreseeable future and we intend for those subsidiaries to retain any future earnings for use in the operation and expansion of our business in mainland China. Accordingly, our ability to pay dividends and finance debt will be affected by this current plan. In the future, we may take advantage of financing options available to us in connection with any dividend payments we may make or repayments of any offshore indebtedness we may incur. For example, we may fund dividend payments through offshore debt, whether unsecured or secured by the assets of our onshore consolidated entities. In order to service offshore debt, we may rely upon financing options through the capital markets, including issuances of equity or debt securities, the proceeds of which we may use to service offshore debt.

Pursuant to the PRC Enterprise Income Tax Law, a withholding tax rate of 10% currently applies to dividends paid by a PRC “resident enterprise” to a foreign enterprise investor, unless any such foreign investor’s jurisdiction of incorporation has a tax treaty with China that provides for preferential tax treatment