Company: LICN
Filing Date: 2025-04-29
Form Type: 20-F
Source: 0001213900-25-036244
Chunk: 18

Company: Lichen International Ltd
Filing Date: 2025-04-29
Form: 20-F
Item: Item 4
Chunk 18
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 fund another
subsidiary’s operations. We have not been notified of any other restriction which could limit our PRC subsidiaries’ ability
to transfer cash between PRC subsidiaries. The Company’s subsidiaries in the PRC have not transferred any earnings or cash to the
Company to date. As of the date of this report, there has not been any assets or cash transfer between the holding company and its subsidiaries.
As of the date of this report, there has not been any dividends or distributions made to US investors. The Company’s business is
primarily conducted through its subsidiaries. The Company is a holding company and its material assets consist solely of the ownership
interests held in its PRC subsidiaries. The Company relies on dividends paid by its subsidiaries for its working capital and cash needs,
including the funds necessary: (i) to pay dividends or cash distributions to its shareholders, (ii) to service any debt obligations and
(iii) to pay operating expenses. As a result of PRC laws and regulations (noted below) that require annual appropriations of 10% of after-tax
income to be set aside in a general reserve fund prior to payment of dividends, the Company’s PRC subsidiaries are restricted in
that respect, as well as in other respects noted below, in their ability to transfer a portion of their net assets to the Company as a
dividend.

With respect to transferring
cash from the Company to its subsidiaries, increasing the Company’s registered capital in a PRC subsidiary requires the filing of
the local commerce department, while a shareholder loan requires a filing with the State Administration of Foreign Exchange or its local
bureau. Aside from the declaration to the State Administration of Foreign Exchange, there is no restriction or limitations on such cash
transfer or earnings distribution.

With respect to the payment
of dividends, we note the following:

  PRC regulations currently permit                                                                                                         

  Our PRC subsidiaries are required to set aside, at a minimum, 10% of their net income after taxes, based on PRC accounting standards, each year as statutory surplus reserves until the cumulativ...  

  Such reserves may not be distributed as cash dividends;  
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  Our PRC subsidiaries may also allocate a portion of their after-tax profits to fund their staff welfare and bonus funds; except in the event of a liquidation, these funds may also not be distri...  
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