SecProbe.io

CORRESP
1
filename1.htm

November
30, 2022

VIA
EDGAR

Ms.
Julie Sherman

Division
of Corporation Finance

Office
of Life Sciences

Securities
and Exchange Commission

100
F Street, N.E.

Washington,
D.C. 20549

    Re:
    China Foods Holdings Ltd. (the
    “Company”)

    Form 10-K for the Fiscal Year Ended December 31,
    2021

    Filed April 15, 2022

    Form
    10-Q for the Quarterly Period ended March 31, 2022

    Filed
    May 16, 2022

    File
    No. 001-32522

Dear
Ms. Sherman:

This
letter sets forth certain of the Company’s responses to the comments contained in the letter dated May 25, 2022 from the staff
(the “Staff”) of the Securities and Exchange Commission (the “Commission”) regarding the Company’s
Form 10-K for the fiscal year ended December 31, 2021 filed with the Commission on April 15, 2022 (the “2021 Form 10-K”).
The Staff’s comments are repeated below in bold and are followed by the Company’s responses thereto. All capitalized terms
used but not defined in this letter shall have the meaning ascribed to such terms in the 2021 Form 10-K. This response includes the responses
previously provided via October 13, 2022 letter.

FORM
10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2021

2.
At the onset of Part I, please disclose prominently that you are not a Chinese operating company but a Delaware holding company with
operations conducted by your subsidiaries. In addition, please provide early in the Business section a diagram of the company’s
corporate structure.

The
Company proposes to add the following disclosure:

The
Company is a Delaware holding company and we conduct our business through our wholly owned subsidiary Guangzhou Xiao Xiang Health Industry
Company Limited, a limited liability company organized under the laws of China on March 8, 2017 (“GXXHIC”). GXXHIC is wholly
owned by Alpha Wellness (HK) Limited, a limited liability company organized under the laws of Hong Kong on April 24, 2019, which is in
turn wholly owned by Elite Creation Group, a limited liability company formed under the laws of the British Virgin Islands formed on
September 5, 2018. Alpha Wellness (HK) Limited and Elite Creation Group are holding companies without operations and are wholly owned
by the Company.

3.
Provide prominent disclosure about the legal and operational risks associated with being based in or having the majority of the company’s
operations in China. Your disclosure should make clear whether these risks could result in a material change in your operations and/or
the value of the securities you have registered for sale or could significantly limit or completely hinder your ability to offer or continue
to offer securities to investors and cause the value of such securities to significantly decline or be worthless. Your disclosure should
address how recent statements and regulatory actions by China’s government, such as those related to the use of variable interest
entities and data security or anti-monopoly concerns, have or may impact the company’s ability to conduct its business, accept
foreign investments, or list on a U.S. or other foreign exchange.

The
Company proposes to add the following disclosure:

We
are a Delaware corporation and we conduct our primary operations in China through our subsidiary GXXHIC. We
face various risks and uncertainties related to doing business in China， Our subsidiary GXXHIC is subject to complex and evolving
PRC laws and regulations. Recently, the PRC enacted rules and regulations governing offshore offerings, anti-monopoly actions, and additional
oversight on cybersecurity and data privacy.

We
do not believe there GXXHIC is in violation of any laws, rules or regulations but since these newly enacted rules are still evolving,
we cannot assure you that our business operations comply with such regulations and authorities’ requirements in all respects during
the development of these new rules. However, in terms of business operation, GXXHIC expects to adapt to the newly issued rules and take
dependent measures to comply with the laws and regulations of the Chinese authorities.

The
PRC government’s authority in regulating our operations and its oversight and control over offerings and listings conducted overseas
by, and foreign investment in, China-based issuers could significantly limit or completely hinder our ability to offer or continue to
offer securities to investors. Implementation of industry-wide regulations in this nature may cause the value of such securities to significantly
decline or be worthless. Risks and uncertainties arising
from the legal system in China, including risks and uncertainties regarding the enforcement of laws and quickly evolving rules and regulations
in China, could result in a material adverse change in our operations and the value of our securities. But so far, the current operation
and securities value of the CFO are stable, and we believe that its risks are to the Company are manageable.

4.
Please prominently disclose whether your auditor is subject to the determinations announced by the PCAOB on December 16, 2021 and whether
and how the Holding Foreign Companies Accountable Act (“HFCAA”) and related regulations will affect your company. Additionally,
please disclose prominently that you have been included on the Commission’s conclusive list of issuers identified under the HFCAA
as having retained a registered public accounting firm to issue an audit report where the firm has a branch or office that: (1) is located
in a foreign jurisdiction and (2) the PCAOB has determined that it is unable to inspect or investigate completely because of a position
taken by an authority in the foreign jurisdiction.

The
Company proposes to update its disclosures to include:

The
Holding Foreign Companies Accountable Act (the “HFCAA”), was enacted on December 18, 2020. Our auditor, HKCM & CPA Co.,
is subject to the determinations announced by the PCOAB on December 16, 2021 and the HFCAA. The HFCAA states that if the SEC determines
that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspection by the PCAOB for
three consecutive years beginning in 2021, the SEC shall prohibit our shares from being traded on a national securities exchange or in
the over-the-counter trading market in the United States. Since our auditor is located in Hong Kong, a jurisdiction where the PCAOB has
been unable to conduct inspections without the approval of the Chinese authorities, our auditor is not currently inspected by the PCAOB.
The related risks and uncertainties could cause the value of our shares to significantly decline or be worthless.

5.
Clearly disclose how you will refer to the holding company and subsidiaries when providing the disclosure throughout the document so
that it is clear to investors which entity the disclosure is referencing and which subsidiaries or entities are conducting the business
operations. For example, disclose, if true, that your subsidiaries conduct operations in China.

The
Company updated the filing to clarify that GXXHIC is a subsidiary of the Company and operates in China, and proposes to update its disclosure
to add:

The
Company is a Delaware holding company and we conduct our business through our wholly owned subsidiary Guangzhou Xiao Xiang Health Industry
Company Limited, a limited liability company organized under the laws of China on March 8, 2017 (“GXXHIC”).

6.
Provide a clear description of how cash is transferred through your organization. Disclose your intentions to distribute earnings. Quantify
any cash flows and transfers of other assets by type that have occurred between the holding company and its subsidiaries, and direction
of transfer. Quantify any dividends or distributions that a subsidiary have made to the holding company and which entity made such transfer,
and their tax consequences. Similarly quantify dividends or distributions made to U.S. investors, the source, and their tax consequences.
Your disclosure should make clear if no transfers, dividends, or distributions have been made to date. Describe any restrictions on foreign
exchange and your ability to transfer cash between entities, across borders, and to U.S. investors. Describe any restrictions and limitations
on your ability to distribute earnings from the company, including your subsidiaries, to the parent company and U.S. investors.

The
Company proposes to update the filings by adding the follow disclosure:

Transfers
of Cash to and from Our Subsidiaries

China
Foods Holdings Ltd is a Delaware holding company with no operations of its own. We conduct our operations in Hong Kong through our subsidiary
in Hong Kong, while our operations in PRC through our subsidiary in PRC. We may rely on dividends to be paid by our Hong Kong subsidiary
to fund our cash and financing requirements, including the funds necessary to pay dividends and other cash distributions to our shareholders,
to service any debt we may incur and to pay our operating expenses. There is a possibility that the PRC could prevent our cash maintained
in Hong Kong from leaving or the PRC could restrict the deployment of the cash into our business or for the payment of dividends. Any
such controls or restrictions may adversely affect our ability to finance our cash requirements, service debt or make dividend or other
distributions to our shareholders. If our Hong Kong subsidiary incurs debt on its own behalf in the future, the instruments governing
the debt may restrict its ability to pay dividends or make other distributions to us. To date, our subsidiaries have not made any transfers,
dividends or distributions to China Foods Holdings Ltd. and China Foods Holdings Ltd. has not made any transfers, dividends or distributions
to our subsidiaries.

China
Foods Holdings Ltd. is permitted under the Delaware laws to provide funding to our subsidiaries in Hong Kong through loans or capital
contributions without restrictions on the amount of the funds, subject to satisfaction of applicable government registration, approval
and filing requirements. Our Hong Kong is also permitted under the laws of Hong Kong to provide funding China Foods Holdings Ltd. through
dividend distribution without restrictions on the amount of the funds. As of the date of this prospectus, there has been no dividends
or distributions among the holding company or the subsidiaries nor do we expect such dividends or distributions to occur in the foreseeable
future among the holding company and its subsidiaries.

We
currently intend to retain all available funds and future earnings, if any, for the operation and expansion of our business and do not
anticipate declaring or paying any dividends in the foreseeable future. Any future determination related to our dividend policy will
be made at the discretion of our board of directors after considering our financial condition, results of operations, capital requirements,
contractual requirements, business prospects and other factors the board of directors deems relevant, and subject to the restrictions
contained in any future financing instruments.

Subject
to the Delaware Statutes and our bylaws, our board of directors may authorize and declare a dividend to shareholders at such time and
of such an amount as they think fit if they are satisfied, on reasonable grounds, that immediately following the dividend the value of
our assets will exceed our liabilities and we will be able to pay our debts as they become due. There is no further Nevada statutory
restriction on the amount of funds which may be distributed by us by dividend.

Under
the current practice of the Inland Revenue Department of Hong Kong, no tax is payable in Hong Kong in respect of dividends paid by us.
The laws and regulations of the PRC do not currently have any material impact on transfer of cash from China Foods Holdings Ltd. to our
Hong Kong subsidiaries or from our Hong Kong subsidiaries to China Foods Holdings Ltd. There are no restrictions or limitation under
the laws of Hong Kong imposed on the conversion of HK dollar into foreign currencies and the remittance of currencies out of Hong Kong
or across borders and to U.S investors.

Current
PRC regulations permit PRC subsidiaries to pay dividends to Hong Kong subsidiaries only out of their accumulated profits, if any, determined
in accordance with Chinese accounting standards and regulations. In addition, each of our subsidiaries in China is required to set aside
at least 10% of its after-tax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered
capital. Each of such entity in China is also required to further set aside a portion of its after-tax profits to fund the employee welfare
fund, although the amount to be set aside, if any, is determined at the discretion of its board of directors. Although the statutory
reserves can be used, among other ways, to increase the registered capital and eliminate future losses in excess of retained earnings
of the respective companies, the reserve funds are not distributable as cash dividends except in the event of liquidation. As of the
date of this prospectus, we do not have any PRC subsidiaries.

The
PRC government also imposes controls on the conversion of RMB into foreign currencies and the remittance of currencies out of the PRC.
Therefore, we may experience difficulties in completing the administrative procedures necessary to obtain and remit foreign currency
for the payment of dividends from our profits, if any. Furthermore, if our subsidiaries in the PRC incur debt on their own in the future,
the instruments governing the debt may restrict their ability to pay dividends or make other payments. If we or our subsidiaries are
unable to receive all of the revenues from our operations, we may be unable to pay dividends on our common stock.

Cash
dividends, if any, on our common stock will be paid in U.S. dollars. If we are considered a PRC tax resident enterprise for tax purposes,
any dividends we pay to our overseas shareholders may be regarded as China-sourced income and as a result may be subject to PRC withholding
tax at a rate of up to 10.0%.

In
order for us to pay dividends to our shareholders, we will rely on payments made from our Hong Kong subsidiary to China Foods. If in
the future we have PRC subsidiaries, certain payments from such PRC subsidiaries to Hong Kong subsidiaries will be subject to PRC taxes,
including business taxes and VAT. As of the date of this prospectus, we do not have any PRC subsidiaries and our Hong Kong subsidiary
has not made any transfers or distributions.

Pursuant
to the Arrangement between Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax
Evasion on Income, or the Double Tax Avoidance Arrangement, the 10% withholding tax rate may be lowered to 5% if a Hong Kong resident
enterprise owns no less than 25% of a PRC entity. However, the 5% withholding tax rate does not automatically apply and certain requirements
must be satisfied, including, without limitation, that (a) the Hong Kong entity must be the beneficial owner of the relevant dividends;
and (b) the Hong Kong entity must directly hold no less than 25% share ownership in the PRC entity during the 12 consecutive months preceding
its receipt of the dividends. In current practice, a Hong Kong entity must obtain a tax resident certificate from the Hong Kong tax authority
to apply for the 5% lower PRC withholding tax rate. As the Hong Kong tax authority will issue such a tax resident certificate on a case-by-case
basis, we cannot assure you that we will be able to obtain the tax resident certificate from the relevant Hong Kong tax authority and
enjoy the preferential withholding tax rate of 5% under the Double Taxation Arrangement with respect to dividends to be paid by a PRC
subsidiary to its immediate holding company. As of the date of this pro