Company: LICN
Filing Date: 2025-04-29
Form Type: 20-F
Source: 0001213900-25-036244
Chunk: 68

Company: Lichen International Ltd
Filing Date: 2025-04-29
Form: 20-F
Item: Item 10
Chunk 68
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 PRC in the event that Lichen International Limited is
treated as a PRC resident enterprise.

Provided that the Company
is not deemed to be a PRC resident enterprise, holders of our Class A Ordinary Shares who are not PRC residents will not be subject to
PRC income tax on dividends distributed by us or gains realized from the sale or other disposition of our shares. However, under SAT Circular
7, where a non-resident enterprise conducts an “indirect transfer” by transferring taxable assets, including, in particular,
equity interests in a PRC resident enterprise, indirectly by disposing of the equity interests of an overseas holding company, the non-resident
enterprise, being the transferor, or the transferee or the PRC entity which directly owned such taxable assets may report to the relevant
tax authority such indirect transfer. Using a “substance over form” principle, the PRC tax authority may disregard the existence
of the overseas holding company if it lacks a reasonable commercial purpose and was established for the purpose of reducing, avoiding
or deferring PRC tax. As a result, gains derived from such indirect transfer may be subject to PRC enterprise income tax, and the transferee
or other person who is obligated to pay for the transfer is obligated to withhold the applicable taxes, currently at a rate of 10% for
the transfer of equity interests in a PRC resident enterprise. We and our non-PRC resident investors may be at risk of being required
to file a return and being taxed under SAT Circular 7, and we may be required to expend valuable resources to comply with SAT Circular
7, or to establish that we should not be taxed under these circulars. See “ Risk Factors - Risks Relating to Doing Business in China
- Enhanced scrutiny over acquisition transactions by the PRC tax authorities may have a negative impact on potential acquisitions we may
pursue in the future.”

United States Federal Income Tax Considerations

The following discussion is
a summary of United States federal income tax considerations relating to the ownership and disposition of our Class A Ordinary Shares
by a U. S. holder (as defined below) that holds our Class A Ordinary Shares as “capital assets” (generally, property held for
investment) under the United States Internal Revenue Code of 1986, as amended (the “ Code”). This discussion is based upon
existing United States federal income tax law, which is subject to differing interpretations and may be changed, possibly with retroactive