Company: QSJC
Filing Date: 2025-03-26
Form Type: 10-K
Source: 0001683168-25-001892
Chunk: 26

Company: TANCHENG GROUP CO., LTD.
Filing Date: 2025-03-26
Form: 10-K
Item: Item 1
Chunk 26
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 inability
by such shareholders to comply with SAFE regulations may subject us to fines or legal sanctions, such as restrictions on the Company’s
cross-border investment activities or our PRC subsidiaries’ ability to distribute dividends to, or obtain foreign exchange-denominated
loans from us, or prevent us from making distributions or paying dividends to our shareholders. As a result, the Company’s business
operations and the Company’s ability to make distributions to you could be materially and adversely affected.

Furthermore, as these foreign exchange regulations
and their interpretation and implementation have been constantly evolving, it is unclear how these regulations, and any future Chinese
regulation concerning offshore or cross-border transactions, will be interpreted, amended and implemented by the relevant government authorities.
In addition, if we decide to acquire a PRC domestic company, we cannot assure you that we or the owners of such company, as the case may
be, will be able to obtain the necessary approvals or complete the necessary filings and registrations required by the foreign exchange
regulations. This may restrict the Company’s ability to implement the Company’s acquisition strategy and could adversely affect
the Company’s business and prospects. 

U.S. regulatory bodies may be limited in
their ability to conduct investigations or inspections of the Company’s operations in China.

Any disclosure of documents or information located
in China by foreign agencies may be subject to jurisdiction constraints and must comply with China’s state secrecy laws, which broadly
define the scope of “state secrets” to include matters involving economic interests and technologies. There is no guarantee
that requests from U.S. federal or state regulators or agencies to investigate or inspect the Company’s operations in China will
be honored by the Company, by entities who provide services to the Company or with whom the Company associates, without violating PRC
legal requirements, especially as those entities are located in China. Furthermore, under the current PRC laws, an on-site inspection
of the Company’s facilities in China by any of these regulators may be limited or prohibited.

 16 

If we are classified as a PRC resident enterprise
for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders.

Under the PRC Enterprise Income Tax Law and its
implementation rules, an enterprise established outside of the PRC with its “de facto management body” within the PRC is considered
a “resident enterprise” and will be subject to the enterprise income tax on its global income at the rate of 25%. The implementation
rules