Company: SDAWW
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001213900-25-036086
Chunk: 40

Company: SunCar Technology Group Inc.
Filing Date: 2025-04-28
Form: 20-F
Item: Item 3
Chunk 40
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 and the Ministry of Commerce publicly released the Directory
of Industries to Encourage Foreign Investment (Encouraged Catalogue) (2020 Edition). On December 27, 2021, the National Development and
Reform Commission of China (“ NDRC”) and the Ministry of Commerce (“ MOFCOM”) jointly issued the Special Administrative
Measures for Foreign Investment Access (Negative List) (2021 Edition), and the Special Administrative Measures for Foreign Investment
Access in Pilot Free Trade Zones (Negative List) (2021 Edition), effective January 1, 2022. As per these policies, the national negative
list of foreign investment access was reduced from 33 to 31, and the negative list of foreign investment access in the FTZ was reduced
from 30 to 27. Industries listed in the 2020 Encouraged Catalogue are the encouraged industries. On the other hand, industries listed
in the 2021 Negative List are subject to special management measures. For example, establishment of wholly foreign-owned enterprises is
generally allowed in industries outside of the 2021 Negative List. Also, foreign investors are not allowed to invest in industries that
are expressly prohibited in the 2021 Negative List. The industries that are not expressly prohibited in the Negative List are still subject
to government approvals and certain special requirements.

As a company operating its
business in auto service, auto eInsurance service and technology service, which are not included in the 2021 Negative List, SunCar believes
its business is not subject to any ownership restrictions. However, in the event the 2021 Negative List is amended in the future to include
any of the business SunCar is operating, our ownership structure could be subject to change to the extent our structure is not given any
“grandfather” protection.

The PRC government will also
establish a foreign investment information reporting system, according to which foreign investors or foreign-invested enterprises shall
submit investment information to the competent department for commerce concerned through the enterprise registration system and the enterprise
credit information publicity system, and a security review system under which the security review shall be conducted for foreign investment
affecting or likely affecting the state security.

Furthermore, the PRC Foreign
Investment Law provides that foreign invested enterprises established according to the existing laws regulating foreign investment may
maintain their structure and corporate governance within five years after the implementing of the PRC Foreign Investment Law.

In addition, the PRC Foreign
Investment Law also provides several protective rules and