clwt_corresp

Euro Tech Holdings Company Ltd. (the “Company”) hereby provides the following information in response to the comments received from the staff (the “Staff”) of the U.S. Securities and Exchange Commission (the “Commission”) in its letter to the Company dated August 23, 2022 (the “Comment Letter”). The Company’s responses are preceded by a reproduction of the corresponding Staff comments in bold as set forth in the Comment Letter.

Also enclosed herein is an amended Form 20-F marked with redline to reflect the proposed additional disclosure the Company plans to make pursuant to the Comment Letter. All page number references contained in the Company’s responses below correspond to the page numbers in the Amended 20-F. Any capitalized terms used herein but not defined herein shall have the meanings given to them in the Amended 20-F.

In a separately captioned section at the beginning of Item 3 (the China Section), please disclose prominently that you are not a Chinese operating company but a British Virgin Islands holding company with operations conducted by your subsidiaries based in China and that this structure involves unique risks to investors. Disclose that investors may never hold equity interests in the Chinese operating company. Your disclosure should acknowledge that Chinese regulatory authorities could disallow this structure, which would likely result in a material change in your operations and/or a material change in the value of your securities, including that it could cause the value of such securities to significantly decline or become worthless. Provide a cross reference to your detailed discussion of risks facing the company as a result of this structure. Please provide aresponse letter with your proposed disclosure.

Company Response: The Company acknowledges the Staff’s comment that the Company is not a Chinese operating company but a British Virgin Islands holding company with operations conducted by its subsidiaries based in China, and has added the disclosure in the section titled “Our Corporate Structure” in Item 3 of the Annual Report on Form 20-F accordingly.

However, the Company does not have the so-called VIE structure, i.e. it does not operate its business through any controlled affiliates, but instead operates its business through its subsidiaries. The Company does not believe the risk of Chinese regulatory authorities disallowing the Company’s operating structure exists. Therefore, the Company does not believe that the following suggested disclosure is appropriate: “Your disclosure should acknowledge that Chinese regulatory authorities could disallow your operating structure, which would likely result in a material change in your operations and/or a material change in the value of the securities you are registering for sale, including that it could cause the value of such securities to significantly decline or become worthless.”

In the China Section, 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, and include cross-references to the relevant risk factors contained in Item 3.D. Your disclosure should make clear whether these risks could result in a material change in your operations and/or the value of your securities or could significantly limit or completely hinder your ability 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 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. Please 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, Accelerating Holding Foreign Companies Accountable Act, and related regulations will affect your company. Discuss the inspection time frames under both Acts and include a cross-reference to the related detailed risk factor. Please provide a response letter with your proposed disclosure.

Company Response: The Company acknowledges the Staff’s comment and has added the disclosure in the section titled “Risks Associated with Being Based in and Having the Majority of Our Operations in China” and the section titled “The Holding Foreign Companies Accountable Act” in Item 3 of the Annual Report on Form 20-F accordingly.

In the China Section, please state that you have been included on the conclusive list of issuers identified under the HFCAA on our website, and acknowledge the ramifications of such identification, including volatility in the trading price of your securities. Please provide a response letter with your proposed disclosure.

In the China Section, 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. Disclose clearly the entity (including the domicile) in which investors hold an interest. Please provide a response letter with your proposed disclosure.

In the China Section, provide a clear description of how cash is transferred through your organization and disclose your intentions to distribute earnings or settle amounts owed. Quantify any cash flows and transfers of other assets by type that have occurred between the holding company, 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. Provide a cross-reference to your discussion of this issue in your summary risk factors and risk factors sections, as well. Please provide a response letter with your proposed disclosure.

Company Response: The Company acknowledges the Staff’s comment and has added the disclosure to the sections titled “Transfer of Cash Through Our Organization” and “Restrictions and Limitations on Transfer of Cash and Cash Dividend Distribution” in Item 3 of the Annual Report on Form 20-F accordingly.

As a related matter, please disclose in the China Section, the summary risk factors section and the risk factors section that, to the extent cash in the business is in a PRC entity, the funds may not be available to fund operations or for other use outside of the PRC due to interventions in or the imposition of restrictions and limitations on the ability of you or your subsidiaries by the PRC government to transfer cash. Provide a cross reference in the China Section to the discussions in the summary risk factors and risk factors. Please provide a response letter with your proposed disclosure.

To the extent you have cash management policies that dictate how funds are transferred between you, your subsidiaries, or investors, summarize the policies in the China Section, and disclose the source of such policies (e.g., whether they are contractual in nature, pursuant to regulations, etc.); alternatively, state that you have no such cash management policies that dictate how funds are transferred. Please provide a response letter with your proposed disclosure.

In the China Section, include a diagram of the company’s corporate structure, identifying the person or entity that owns the equity in each depicted entity. Identify clearly the entity in which investors hold their interest and the entity(ies) in which the company’s operations are conducted. Please provide a response letter with your proposed disclosure.

In the China Section, include a summary of risk factors. In the summary of risk factors, disclose the risks that your corporate structure and being based in or having the majority of the company’s operations in China poses to investors. In particular, describe the significant regulatory, liquidity, and enforcement risks with cross-references to the more detailed discussion of these risks in the prospectus. For example, specifically discuss risks arising from the legal system in China, including risks and uncertainties regarding the enforcement of laws and that rules and regulations in China can change quickly with little advance notice; and the risk that the Chinese government may intervene or influence your operations at any time, or may exert more control over offerings conducted overseas and/or foreign investment in China-based issuers, which could result in a material change in your operations and/or the value of your securities. Acknowledge any risks that any actions by the Chinese government to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers could significantly limit or completely hinder your ability to offer securities to investors and cause the value of such securities to significantly decline or be worthless. Include a cross-reference to the risk factors section for each risk discussed in the summary of risk factors. Please provide a response letter with your proposed disclosure.

Company Response: The Company acknowledges the Staff’s comment and has added the disclosure in the section titled “Risks Associated with Being Based in and Having the Majority of Our Operations in China” and the section titled “Risk Factors Summary” in Item 3 of the Annual Report on Form 20-F accordingly.

10.

In the China Section, disclose each permission or approval that you or your subsidiaries are required to obtain from Chinese authorities to operate your business. State whether you or your subsidiaries are covered by permissions requirements from the China Securities Regulatory Commission (CSRC), Cyberspace Administration of China (CAC) or any other governmental agency, and state affirmatively whether you have received all requisite permissions or approvals and whether any permissions or approvals have been denied. Please also describe the consequences to you and your investors if you or your subsidiaries: (i) do not receive or maintain such permissions or approvals, (ii) inadvertently conclude that such permissions or approvals are not required, or (iii) applicable laws, regulations, or interpretations change and you are required to obtain such permissions or approvals in the future. Please provide a response letter with your proposed disclosure.

11.

In the China Section, disclose that trading in your securities may be prohibited under the Holding Foreign Companies Accountable Act if the PCAOB determines that it cannot inspect or investigate completely your auditor, and that as a result an exchange may determine to delist your securities. Disclose whether your auditor is subject to the determinations announced by the PCAOB on December 16, 2021. Please provide a response letter with your proposed disclosure.

13.

You indicate here that in 2019 and 2021 you issued bonus shares. In your Form 6-K filed December 16, 2021, you also indicate that your board of directors authorized the issuance of additional bonus shares to shareholders of record as of January 7, 2022. Please tell us why these bonus share issuances were not accounted for and disclosed as stock splits in your statements of shareholders' equity, earnings per share computations for all periods presented and elsewhere throughout your filings. Alternatively, amend your Form 20-F accordingly and also tell us whether you continue to believe both your internal control over financial reporting and your disclosure controls and procedures were effective as of December 31, 2021, including the factors you considered to support these conclusions. Refer to ASC 505-20-25-2, ASC 505-20-50-1, ASC 260-10-55-12 and ASC 250-10-50-7.

These amendments do not affect the numbers set forth in the Consolidated Balance Sheet, and the Consolidated Statements of Operations and Comprehensive Income / (Loss), except for shares of outstanding common stock and earnings per share. The management has noted the deficiencies in connection with the accounting treatment for the stock splits in the form of bonus shares, but believe that such deficiencies do not rise to the level of a material weakness. We continue to believe both our internal control over financial reporting and our disclosure controls and procedures were effective. as of December 31, 2021.

14.

You indicate that the non-controlling interests of Yixing Pact Environmental Technology Co., Ltd. and Pact Asia Pacific Limited were granted a put option requiring you to acquire part or all remaining shares of these two companies at a per share price calculated by 5.2 times their average net income for the three prior fiscal years divided by the number of shares outstanding at the time the option is exercised. Please explain why the noncontrolling interests subject to the put option have not been reflected as temporary equity in your balance sheet and explain in detail how your accounting for these put options complies with the guidance in ASC 480-10-S99-3A, as applicable.

Company Response: We performed assessment of the fair value of the non-controlling interest put option of Yixing Pact Environmental Technology Co., Ltd. and Pact Asia Pacific Limited. The average net income of these two companies for the fiscal year ended December 31, 2021, 2020 and 2019 were losses, and the calculated acquisition prices were zero. We determined that the fair value of these put options were zero.

	Sincerely,

	/s/ David YL Leung

	David YL Leung, Chief ExecutiveOfficer

cc:

Sheppard Mullin Richter & Hampton LLP