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ajia_corresp.htm

 November 10, 2022

 Division of Corporation Finance

 Office of Trade & Services

 Securities and Exchange Commission

 Division of Corporation Finance

 100 F Street N.E.

 Washington, D.C. 20549

 Re: Ajia Innogroup Holdings, Ltd.

 Annual Report on Form 10-K

 Filed October 13, 2022

 File No. 333-206450

 Dear Ms. Beysolow and Ms. Ransom:

 Ajia Innogroup Holdings, Ltd., a Nevada corporation (the “Company”), has received and reviewed your letter of October 12, 2022, pertaining to the Company’s Annual Report on Form 10-K (the “2021 10-K”) filed on September 28, 2021, with the Securities & Exchange Commission (the “Commission”). As per our conversation, as we have recently filed the Company’s Form 10-K for the year ended 2022, as filed on October 13, 2022, (“2022 10-K”), we have addressed your comments of October 12, 2022, in the 2022 10-K. We believe this approach will fully addresses your previously issued comments and will alleviate  additional burden and costs of continuing to amend the 2021 10-K. Accordingly, and specific to your comments, our responses below are in addition to those filed via the Edgar system.

 The following numbered responses correspond to those numbered comments as set forth in the comment letter dated October 12, 2022.

 Item 1. Business, page 4

 1. We note your response to comment 1. Please reconcile the information contained in your response with your disclosure or advise. For example, revise to disclose that you have not had any cash transfers including dividends involving your subsidiary in China since July 1, 2020 and that cash is transferred from your subsidiaries to your entity or account in Hong Kong, and then to your US investors. Please revise to reflect your response regarding restrictions and your ability to transfer cash among all of your current entities; and on your ability to distribute earnings from your company, including your subsidiaries, to the parent company and U.S. investors. Provide the basis for this conclusion including how your experience validates such conclusions. With respect to your subsidiaries outside of China, quantify any dividends or distributions that a subsidiary has made to the parent 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. Provide cross-references to the consolidated financial statements.

 RESPONSE: We have amended the 2022 10-K on page 4 to include the following disclosure:

 “As of September 2022, we have disposed of our operation in the PRC, and operate primarily from our Hong Kong based subsidiaries. Current PRC regulations permit our PRC Subsidiaries to pay dividends to us through our subsidiaries in Hong Kong, only out of their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, each of our PRC Subsidiaries 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. As of the date hereof, we have had no transactions that involved the transfer of cash or assets throughout our corporate structure since at least July 1, 2020. The PRC Subsidiaries have not transferred cash or other assets to the Company, including by way of dividends. The Company does not currently plan or anticipate transferring cash or other assets from our operations in China to any non-Chinese entity. As of the date hereof, no transfers, dividends, or distributions have been made to our U.S. investors.”

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 2. We note your response to comment 2, however, notwithstanding the fact that your Chinese subsidiary was disposed of on September 1, 2022, we continue to believe that there are risks associated with the ability to transfer cash from your Hong Kong subsidiaries to you. Revise to provide prominent disclosure here, in the summary risk factors and risk factors sections to state that, to the extent cash in the business is in Hong Kong or a Hong Kong entity, the funds may not be available to fund operations or for other use outside of Hong Kong due to interventions in or the imposition of restrictions and limitations on the ability of you and your subsidiaries by the government to transfer cash. Acknowledge the limitations upon transfer and tax obligations imposed by Hong Kong laws.

 RESPONSE: We have amended the 2022 10-K to include the following disclosure: (i) on page 9 we have added the following section,

 “SUMMARY RISK FACTORS

 Changes in China’s economic, political, or social conditions or government policies could have a material adverse effect on our business, results of operations, financial condition, and prospects. For more details, see “Risk Factors - General Risks Associated with Doing Business in China - Changes in the policies, regulations, rules, and the enforcement of laws of the PRC government may be quick with little advance notice and could have a significant impact upon the business we may be able to conduct in the PRC and the profitability of such business.

 There are uncertainties regarding the interpretation and enforcement of PRC laws, rules, and regulations. For more details, see “Risk Factors – General Risks Related to Doing Business in China - There are uncertainties regarding the interpretation and enforcement of PRC laws, rules and regulations.”.

 We may rely on dividends and other distributions on equity paid by our PRC  or Hong Kong subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our PRC and Hong Kong subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business.  See “Risk Factors – General Risks Related to Doing Business in China - Dividends and Other Distributions to U.S. Investors and Tax Consequences

 To the extent cash in the business is in PRC, Hong Kong or a Hong Kong entity, funds may not be available to fund operations or for other use outside of Hong Kong due to interventions in or the imposition of restrictions and limitations on the ability of the Company and its subsidiaries by the PRC government to transfer cash. See “Risk Factors – General Risks Related to Doing Business in China - Transfers of Cash to and from our Subsidiaries in Hong Kong.”; and,

 (ii) in the section captioned “Risk Factors” on page 11, we added the following to the existing disclosure,

 “Transfers of Cash to and from our Subsidiaries; We may not be able to obtain certain benefits under relevant tax treaties on dividends paid by our PRC subsidiaries to us through our Hong Kong subsidiary.

 We are a US company with subsidiaries incorporated under the laws of Hong Kong and PRC (although such operations have been winded down as of September 1, 2022). We are not a Chinese operating company. The Company’s ability to pay dividends to its shareholders and to service any debt it may incur may depend upon dividends paid by our subsidiaries. If any of our subsidiaries incurs debt on its own in the future, the instruments governing such debt may restrict its ability to pay dividends to the Company. In addition, our subsidiaries are required to make appropriations to certain statutory reserve funds, which are not distributable as cash dividends except in the event of a solvent liquidation of the companies. We have never paid any dividends and do not intend to as of the date of this Report. Pursuant to the PRC Enterprise Income Tax Law, a withholding tax rate of 10% currently applies to dividends paid by a PRC “resident enterprise” to a foreign enterprise investor, unless any such foreign investor’s jurisdiction of incorporation has a tax treaty with China that provides for preferential tax treatment. Pursuant to the Arrangement between the 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, such withholding tax rate may be lowered to 5% if a Hong Kong resident enterprise owns no less than 25% of a PRC enterprise. Furthermore, the Administrative Measures for Non-Resident Enterprises to Enjoy Treatments under Tax Treaties, which became effective in August 2015, require non-resident enterprises to determine whether they are qualified to enjoy the preferential tax treatment under the tax treaties and file the relevant report and materials with the tax authorities. There are also other conditions for enjoying the reduced withholding tax rate, according to other relevant tax rules and regulations. As of the date of this Report, we did not record any withholding tax on the retained earnings of our subsidiaries in the PRC, as we intend to re-invest all earnings generated from our PRC subsidiaries for the operation and expansion of our business in China, and we intend to continue this practice in the foreseeable future. Should our tax policy change to allow for offshore distribution of our earnings, we would be subject to a significant withholding tax. We cannot assure you that our determination regarding our qualification to enjoy the preferential tax treatment will not be challenged by the relevant tax authority or if we will be able to complete the necessary filings with the relevant tax authority and enjoy the preferential withholding tax rate of 5% under the Double Taxation Arrangement with respect to dividends to be paid by our PRC subsidiaries to our Hong Kong subsidiary.

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 To address persistent capital outflows and the RMB’s depreciation against the U.S. dollar in the fourth quarter of 2016, the People’s Bank of China and the State Administration of Foreign Exchange, or SAFE, implemented a series of capital control measures in the subsequent months, including stricter vetting procedures for China-based companies to remit foreign currency for overseas acquisitions, dividend payments and shareholder loan repayments. The PRC government may continue to strengthen its capital controls and our PRC subsidiaries’ dividends and other distributions may be subject to tightened scrutiny in the future. 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. In addition, to the extent cash is in our mainland China or Hong Kong subsidiaries, there can be no assurance that the PRC government will not intervene or impose restrictions on the ability of the Company or its subsidiaries to transfer or distribute cash within our organization or to foreign investors, which could result in an inability or prohibition on funding our operations or making transfers or distributions outside of mainland China and Hong Kong for other use.

 Currently, other than complying with the applicable PRC laws and regulations, we do not have our own cash management policy and procedures that dictate how funds are transferred.

 Transfers of Cash to and from our Subsidiaries in Hong Kong

 The Company  conducts operations in Hong Kong through Ajia Creative Holdings Limited Systems, Architecture Solution Limited, and Union Passenger Limited, each a Hong Kong entity and collectively its Hong Kong subsidiaries. The Company  may rely on dividends or payments to be paid by its Hong Kong subsidiaries, to fund its cash and financing requirements, including the funds necessary to pay dividends and other cash distributions to our shareholders and U.S. investors, to service any debt we may incur and to pay our operating expenses

 The Company is permitted to provide funding to its subsidiary in Hong Kong through loans or capital contributions without restrictions on the amount of the funds. The Hong Kong Subsidiaries are  also permitted under the laws of Hong Kong to provide funding to the Company, through dividend distributions or payments, without restrictions on the amount of the funds.

 There are no restrictions or limitation on our ability to distribute earnings by dividends from our subsidiaries, including our subsidiaries in Hong Kong, to the Company and our shareholders and U.S. investors, provided that the entity remains solvent after such distribution. According to the Companies Ordinance of Hong Kong, a Hong Kong company may only make a distribution out of profits available for distribution. We have not adopted or maintain any cash management policies and procedures as of the date of this report. There is no further Hong Kong statutory restriction on the amount of funds which may be distributed by us by dividend.

 As of the date of this report, there are no restrictions or limitation under the laws of Hong Kong imposed on the conversion of HK$ into foreign currencies and the remittance of currencies out of Hong Kong or across borders and to U.S investors. The PRC laws and regulations do not currently have any material impact on transfer of cash from our Hong Kong Subsidiaries to the Company, our shareholders or U.S. investors. However, in the future, funds may not be available to fund operations or for other use outside of Hong Kong, due to interventions in, or the imposition of restrictions and limitations on, our ability or on our subsidiary’s ability by the PRC government to transfer cash. Any limitation on the ability of our subsidiary to make payments to us could have a material adverse effect on our ability to conduct our business and might materially decrease the value of our Shares or cause them to be worthless. Currently, all of our operations are in Hong Kong. We do not have or intend to set up any subsidiary or enter into any contractual arrangements to establish a variable interest entity, or VIE, structure with any entity in mainland China. Since Hong Kong is a special administrative region of the PRC and the basic policies of the PRC regarding Hong Kong are reflected in the Basic Law of the Hong Kong Special Administrative Region of the People’s Republic of China, or the Basic Law, providing Hong Kong with a high degree of autonomy and executive, legislative and independent judicial powers, including that of final adjudication under the principle of “one country, two systems”. The PRC laws and regulations do not currently have any material impact on transfer of cash between the Company and the Hong Kong Subsidiaries and the investors in the U.S. However, the Chinese government may, in the future, impose restrictions or limitations on our ability to transfer money out of Hong Kong, to distribute earnings and pay dividends to and from the other entities within our organization, or to reinvest in our business outside of Hong Kong. Such restrictions and limitations, if imposed in the future, may delay or hinder the expansion of our business to outside of Hong Kong and may affect our ability to receive funds from our operating subsidiary in Hong Kong. The promulgation of new laws or regulations, or the new interpretation of existing laws and regulations, in each case, that restrict or otherwise unfavorably impact the ability or way we conduct our business, could require us to change certain aspects of our business to ensure compliance, which could decrease demand for our services, reduce revenues, increase costs, require us to obtain more licenses, permits, approvals or certificates, or subject us to additional liabilities. To the extent any new or more stringent measures are required to be implemented, our business, financial condition and results of operations could be adversely affected and such measured could materially decrease the value of our Shares, potentially rendering it worthless.

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