Company: RETO
Filing Date: 2025-07-31
Form Type: F-3
Source: 0001213900-25-070052
Chunk: 23

Company: ReTo Eco-Solutions, Inc.
Filing Date: 2025-07-31
Form: F-3
Chunk 23
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 affect our operations”
in our 2024 Annual Report, which is incorporated by reference into this prospectus. We currently do not have cash management policies
that dictate how funds are transferred between our BVI holding company and our subsidiaries.

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Restrictions on Our Ability to Transfer Cash Out of China and to U.S. Investors

Our PRC subsidiaries’
ability to distribute dividends is based upon their distributable earnings. Current PRC regulations permit our PRC subsidiaries to pay
dividends to their respective shareholders only out of their accumulated profits, if any, as determined in accordance with PRC accounting
standards and regulations. In addition, under PRC law, each of our PRC subsidiaries is required to set aside at least 10% of its after-tax
profits each year, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of its registered capital. These
reserves are not distributable as cash dividends. If any of our PRC subsidiaries incurs debt on its own behalf in the future, the instruments
governing such debt may restrict its ability to pay dividends to ReTo.

To address persistent capital
outflows and the RMB’s depreciation against the U.S. dollar in the fourth quarter of 2016, the People’s Bank of China and
the State Administration of Foreign Exchange, or SAFE, implemented a series of capital control measures in the subsequent months, including
stricter vetting procedures for China-based companies to remit foreign currency for overseas acquisitions, dividend payments and shareholder
loan repayments. The PRC government may continue to strengthen its capital controls and our PRC subsidiaries’ dividends and other
distributions may be subject to tightened scrutiny in the future. The PRC government also imposes controls on the conversion of RMB into
foreign currencies and the remittance of currencies out of mainland China. Therefore, we may experience difficulties in completing the
administrative procedures necessary to obtain and remit foreign currency for the payment of dividends from our profits, if any.

Effect of Holding Foreign Companies Accountable Act

The HFCAA, which was signed
into law on December 18, 2020, requires a foreign company to submit that it is not owned or manipulated by a foreign government or disclose
the ownership of governmental entities and certain additional information, if the PCAOB is unable to inspect completely a foreign auditor
that signs the company’s financial statements. If the PCAOB is unable to inspect the Company’s auditors