Company: NTCL
Filing Date: 2025-12-29
Form Type: F-3
Source: 0001104659-25-124826
Chunk: 37

Company: NetClass Technology Inc
Filing Date: 2025-12-29
Form: F-3
Chunk 37
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 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 the PRC. 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. Furthermore, if our subsidiaries
in the PRC incur debt on their own in the future, the instruments governing the debt may restrict their ability to pay dividends or make
other payments. If we or our subsidiaries are unable to receive all of the revenues from our operations, we may be unable to pay dividends
on our Class A Ordinary Shares.

Cash dividends, if any, on our Class A Ordinary
Shares will be paid in U.S. dollars. If we are considered a PRC tax resident enterprise for tax purposes, any dividends we pay to our
overseas shareholders may be regarded as PRC-sourced income and as a result may be subject to PRC withholding tax at a rate of up to 10.0%.

For us to pay dividends to our shareholders, we
will rely on payments made from NetClass HK, our Hong Kong subsidiary, and NetClass Singapore and NetClass Asia, our Singapore
subsidiaries, as well as our PRC subsidiaries, i.e. NetClass Education, NetClass Management and NetClass HR, NetClass Training
to WFOE, from WFOE to NetClass HK, from NetClass HK to NetClass. Certain payments from our PRC subsidiaries to NetClass HK
are subject to PRC taxes, including business taxes and VAT. As of the date of this prospectus, our PRC subsidiaries have not made any
transfers or distributions.

Pursuant to the Arrangement between Mainland
China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, or the Double Tax
Avoidance Arrangement, the 10% withholding tax rate may be lowered to 5% if a Hong Kong resident enterprise owns no less than 25% of a
PRC entity. However, the 5% withholding tax rate does not automatically apply and certain requirements must be satisfied, including, without
limitation, that (a) the Hong Kong entity must be the beneficial owner of the relevant dividends; and (b) the Hong Kong entity
must directly hold no less than 25% share ownership in the PRC