Company: LICN
Filing Date: 2025-04-29
Form Type: 20-F
Source: 0001213900-25-036244
Chunk: 67

Company: Lichen International Ltd
Filing Date: 2025-04-29
Form: 20-F
Item: Item 10
Chunk 67
---
 perform their functions, bear risks and have no substantial business activities.  

Although we believe all our
related party transactions, including all payments by our PRC subsidiaries and consolidated affiliated entities to our non-PRC entities,
are made on an arm’s-length basis and our estimates are reasonable, the ultimate decisions by the relevant tax authorities may differ
from the amounts recorded in our financial statements and may materially affect our financial results in the period or periods for which
such determination is made.

We believe that none of our
entities outside of China is a PRC resident enterprise for PRC tax purposes. We do not believe that Lichen International Limited meets
all of the conditions above. Lichen International Limited is a company incorporated outside the PRC. As a holding company, its key assets
are its ownership interests in its subsidiaries, and its key assets are located, and its records (including the resolutions of its Board
of Directors and the resolutions of its shareholders) are maintained, outside the PRC. For the same reasons, we believe our other entities
outside of China are not PRC resident enterprises either. However, the tax resident status of an enterprise is subject to determination
by the PRC tax authorities and uncertainties remain with respect to the interpretation of the term “de facto management body.”
There can be no assurance that the PRC government will ultimately take a view that is consistent with us.

However, if the PRC tax authorities
determine that Lichen International Limited is a PRC resident enterprise for enterprise income tax purposes, we may be required to withhold
a 20% withholding tax from dividends we pay to our shareholders that are non-resident enterprises. In addition, non-resident enterprise
shareholders may be subject to a 10% PRC tax on gains realized on the sale or other disposition of Class A Ordinary Shares, if such income
is treated as sourced from within the PRC. It is unclear whether our non-PRC individual shareholders would be subject to any PRC tax on
dividends or gains obtained by such non-PRC individual shareholders in the event we are determined to be a PRC resident enterprise. If
any PRC tax were to apply to such dividends or gains, it would generally apply at a rate of 20% unless a reduced rate is available under
an applicable tax treaty. However, it is also unclear whether non-PRC shareholders of Lichen International Limited would be able to claim
the benefits of any tax treaties between their country of tax residence and the