JOYY Inc. [YY] Filings

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

(Mark One)

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For the fiscal year ended December 31, 2023.

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Date of event requiring this shell company report _____________

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For the transition period from _____________to _____________

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Commission file number:   001-35729

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Securities registered or to be registered pursuant to Section 12(b) of the Act:

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* Not for trading, but only in connection with the listing on The Nasdaq Stock Market LLC of the American depositary shares (“ADSs”).

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Securities registered or to be registered pursuant to Section 12(g) of the Act:

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Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

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Indicate the number of outstanding shares of each of the Issuer’s classes of capital or common stock as of the close of the period covered by the annual report. 890,843,639 Class A common shares, par value US$0.00001 per share, and 326,509,555 Class B common shares, par value US$0.00001 per share, were outstanding as of December 31, 2023.

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Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.   Yes ☒ No ☐

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If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.   Yes ☐ No ☒

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Note–Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

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Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes ☒ No ☐

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Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   Yes ☒ No ☐

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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act.  ☐

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† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

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Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.  ☒

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If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

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Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

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If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.   Item 17 ☐        Item 18 ☐

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If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes ☐ No ☒

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(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

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Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.   Yes ☐ No ☐

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INTRODUCTION

Unless otherwise indicated and except where the context otherwise requires, references in this annual report on Form 20-F to:

Our reporting currency is U.S. dollars since a majority of our revenues and expenses are denominated in U.S. dollars.

On November 16, 2020, we entered into definitive agreements with affiliates of Baidu, Inc. (Nasdaq: BIDU; HKEX: 9888), or Baidu, subsequently amended on February 7, 2021. Pursuant to the agreements, Baidu would acquire JOYY’s video-based entertainment live streaming business in mainland China, which we refer to as YY Live, including the YY mobile app, the YY.com website and the YY PC app, among others, for an aggregate purchase price of approximately US$3.6 billion in cash, subject to certain adjustments. Subsequently, the sale was substantially completed as of February 8, 2021, with certain matters remaining to be completed, including necessary regulatory approvals from government authorities. As a result, YY Live’s historical results were presented in our consolidated financial statements as discontinued operations and we ceased consolidation of YY Live’s business since February 8, 2021. On January 1, 2024, we received a written notice from an affiliate of Baidu, purporting to terminate the share purchase agreement. Baidu asserted in the written notice that it has and exercised the right to terminate the referenced share purchase agreement and effectively cancel the transaction. We are currently in discussion with Baidu on the next steps following the termination of the share purchase agreement. We are also seeking legal advice and will consider all options at our disposal in response to Baidu’s written notice and expressly reserve all rights. From January 1, 2024 to the date of this annual report, we have not obtained control of YY Live and have not consolidated YY Live.

The financial information and other relevant information disclosed in this annual report is presented on a continuing operations basis, unless otherwise specifically stated. For the avoidance of confusion, the continuing operations for the year ended December 31, 2021, 2022 and 2023 as presented in this annual report primarily consisted of the BIGO segment (primarily including Bigo Live, Likee and imo) and the All other segment, and did not include YY Live.

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FORWARD-LOOKING STATEMENTS

This annual report contains forward-looking statements that involve risks and uncertainties. All statements other than statements of historical facts are forward-looking statements. These forward-looking statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from those expressed or implied by the forward-looking statements.

You can identify these forward-looking statements by words or phrases such as “may,” “will,” “expect,” “is expected to,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “is/are likely to” or other similar expressions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. These forward-looking statements include, but are not limited to, statements about:

You should thoroughly read this annual report and the documents that we refer to herein with the understanding that our actual future results may be materially different from and/or worse than what we expect. Other sections of this annual report, including “Item 3. Key Information—D. Risk Factors” and “Item 5. Operating and Financial Review and Prospects” sections, discuss factors which could adversely impact our business and financial performance. Moreover, we operate in an evolving environment. New risk factors emerge from time to time and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. We qualify all of our forward-looking statements by these cautionary statements.

You should not rely upon forward-looking statements we make as predictions of future events. The forward-looking statements made in this annual report relate only to events or information as of the date on which the statements are made in this annual report. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

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PART I

ITEM 1.     IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS

Not applicable.

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ITEM 2.     OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

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ITEM 3.     KEY INFORMATION

Our Holding Company Structure and Contractual Arrangements with the Variable Interest Entities

JOYY Inc. is a Cayman Islands holding company that does not have substantive operations on its own. We conduct our operations primarily through (i) our subsidiaries in Singapore, the United States, the United Kingdom, and other jurisdictions for a majority of our global business; and (ii) the variable interest entities, or the VIEs, with which we have maintained contractual arrangements, and their subsidiaries for some of our remaining business in mainland China. Laws and regulations of mainland China prohibit or restrict foreign investment in certain internet-related business, value-added telecommunication services and other-related businesses. Accordingly, we operate these businesses in mainland China through the variable interest entities, the structure of which is used to provide investors with exposure to foreign investment in companies based in mainland China where laws and regulations prohibit or restrict direct foreign investment in certain operating companies, and rely on contractual arrangements among our subsidiaries and the variable interest entities in mainland China as well as their shareholders to direct the business operations of the variable interest entities. Revenues contributed by the variable interest entities and their subsidiaries accounted for 17.1%, 19.8% and 13.3% of our total net revenues for the year ended December 31, 2021, 2022 and 2023, respectively. As used in this annual report, “we,” “us,” “our company” and “our” refers to JOYY Inc., its subsidiaries, and, in the context of describing our operations in mainland China and consolidated financial information, also include the variable interest entities and their subsidiaries, primarily including Guangzhou Huaduo Network Technology Co., Ltd., or Guangzhou Huaduo, and Guangzhou BaiGuoYuan Network Technology Co., Ltd, or Guangzhou BaiGuoYuan. Uncertainties remain as to whether YY Live will be returned to us for re-consolidation due to Baidu’s purported termination of the share purchase agreement in connection with the sale of YY Live. If revenue contribution by the variable interest entities increases due to the re-consolidation of YY Live, we will be exposed to additional risks relating to heightened reliance on the variable interest entities. Investors in our ADSs are purchasing equity interest in a holding company incorporated in the Cayman Islands that holds equity interests in its subsidiaries in various jurisdictions. JOYY Inc. does not hold any equity interest in the variable interest entities in mainland China, so investments in our ADSs would not render the investors any equity interest in the variable interest entities.

A series of contractual agreements, including voting rights proxy agreements, exclusive service agreements, equity interest pledge agreements and exclusive option agreements, have been entered into by and among our subsidiaries and the variable interest entities in mainland China as well as their respective shareholders. Terms contained in each set of contractual arrangements with the variable interest entities and their respective shareholders are substantially similar. As a result of the contractual arrangements, we are considered the primary beneficiary of these companies, and we have consolidated the financial results of these companies in our consolidated financial statements under U.S. GAAP for accounting purposes. For more details of these contractual arrangements, see “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—VIE Structure and the Contractual Arrangements.”

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However, the contractual arrangements may not be as effective as direct ownership in providing us with control over the variable interest entities and we may incur substantial costs to enforce the terms of the arrangements. If the variable interest entities or the nominee shareholders fail to perform their respective obligations under the contractual arrangements, we could be limited in our ability to enforce the contractual arrangements. Meanwhile, there are very few precedents as to whether contractual arrangements would be judged to form effective control over the variable interest entities through the contractual arrangements, or how contractual arrangements in the context of a variable interest entity should be interpreted or enforced by the courts of mainland China. Furthermore, if we are unable to direct the operations of the variable interest entities and to obtain economic benefits from them through contractual arrangements, we would not be able to continue to consolidate the financial results of these entities in our financial statements. See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure—We rely on contractual arrangements with the variable interest entities and their shareholders for some of our operation in mainland China, which may not be as effective as direct ownership. If the variable interest entities and their shareholders fail to perform their obligations under these contractual arrangements, we may have to resort to litigation or other legal proceedings to enforce our rights, which may be time-consuming, unpredictable, expensive and damaging to our operations and reputation.”

There are also substantial uncertainties regarding the interpretation and application of current and future laws, regulations and rules of mainland China regarding the status of the rights of our Cayman Islands holding company with respect to its contractual arrangements with the variable interest entities and their shareholders. It is uncertain whether any new laws or regulations of mainland China relating to variable interest entity structure will be adopted or what they would provide if adopted. If we or any of the variable interest entities is found to be in violation of any existing or future laws or regulations of mainland China, or fail to obtain or maintain any of the required permits or approvals, the relevant regulatory authorities of mainland China would have broad discretion to take action in dealing with such violations or failures. See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure—If the mainland China’s government finds that the structure we have adopted for our business operations in mainland China does not comply with laws and regulations of mainland China, or if these laws or regulations or interpretations of existing laws or regulations change in the future, we could be subject to severe penalties, including the shutting down of our platforms and our business operations currently operated in mainland China” and “Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure—If the variable interest entities fail to obtain and maintain the requisite licenses and approvals required under the complex regulatory environment for internet-based businesses in mainland China, our business, financial condition and results of operations in mainland China may be adversely affected.”

Our corporate structure is subject to risks associated with our contractual arrangements with the variable interest entities. If the mainland China’s government deems that our contractual arrangements with the variable interest entities do not comply with regulatory restrictions of mainland China on foreign investment in the relevant industries, or if these regulations or the interpretation of existing regulations change or are interpreted differently in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations. Our holding company, our subsidiaries and the consolidated variable interest entities in mainland China, and investors of our company face uncertainty about potential future actions by the mainland China’s government that could affect the enforceability of the contractual arrangements with the variable interest entities and, consequently, significantly affect the financial performance of the variable interest entities and our company as a whole. For a detailed description of the risks associated with our corporate structure, please refer to risks disclosed under “Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure.”

These risks could result in a material adverse change in our operations and the value of our ADSs, significantly limit or completely hinder our ability to continue to offer securities to investors, or cause the value of such securities to significantly decline or become worthless. For a detailed description of risks related to doing business in multiple jurisdictions, please refer to risks disclosed under “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in Jurisdictions We Operate.”

Permissions and Approvals Required from the Authorities of Mainland China for Our Operations

We currently operate in several key markets across the globe, such as North America, Europe, the Middle East, Southeast Asia, Eastern Pacific regions, and others. We face various risks and uncertainties related to doing business in multiple jurisdictions across the globe. In particular, for our operations in mainland China, we are subject to complex and evolving laws and regulations of mainland China to the extent applicable.

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We generated 16.8%, 19.7% and 15.3% of our total net revenues from mainland China for the year ended December 31, 2021, 2022 and 2023, respectively. We conduct the mainland China portion of our business primarily through our subsidiaries and the variable interest entities in mainland China and are therefore subject to the laws and regulations of mainland China to the extent applicable. As of the date of this annual report, our subsidiaries and the variable interest entities in mainland China have obtained the requisite licenses and permits from the mainland China’s government authorities that are material for the continuing business operations of our holding company, our subsidiaries and the variable interest entities in mainland China, including, among others, the Internet Culture Operation License, the Value-added Telecommunications Business Operation License (ICP License), the Radio and Television Program Production and Operating Permit and the License for Online Transmission of Audio-Visual Programs. Given the uncertainties of interpretation and implementation of relevant laws and regulations and the enforcement practice by relevant mainland China’s government authorities, we may be required to obtain additional licenses, permits, filings or approvals for the functions and services of our platform in the future. For more detailed information, see “Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure—If the variable interest entities fail to obtain and maintain the requisite licenses and approvals required under the complex regulatory environment for internet-based businesses in mainland China, our business, financial condition and results of operations in mainland China may be adversely affected.”

The China Securities Regulatory Commission, or the CSRC, promulgated the Trial Administrative Measures of the Overseas Securities Offering and Listing by Domestic Companies, or the Overseas Listing Trial Measures, and five relevant guidelines on February 17, 2023, which came into effect on March 31, 2023. The Overseas Listing Trial Measures regulate both direct and indirect overseas offering and listing by domestic company in mainland China by adopting a filing-based regulatory regime. For details of the Overseas Listing Trial Measures, see “Item 4. Information on the Company—B. Business Overview—Regulations in Multiple Jurisdictions Where We Operate—Mainland China Regulations—Regulations on Overseas Listing by Domestic Companies.” Given the interpretation and implementation of the Overseas Listing Trial Measures and our global operations, we could not rule out the possibility that we may be required to file the relevant documents with the CSRC in connection with our future offerings and listings outside mainland China.

In addition, on December 28, 2021, the Cyberspace Administration of China, or the CAC, and several other administrations jointly promulgated the Measures for Cybersecurity Review, which came into effect on February 15, 2022, superseding and replacing the cybersecurity review measures that had been in effect since June 2020. The Measures for Cybersecurity Review provide that (i) a “network platform operator” holding over one million users’ personal information shall apply for a cybersecurity review when listing their securities “in a foreign country” (ii) a critical information infrastructure operator that intends to purchase internet products and services that affect or may affect national security should apply for a cybersecurity review, and (iii) a “network platform operator” carrying out data processing activities that affect or may affect national security should apply for a cybersecurity review. The Measures for Cybersecurity Review do not provide the exact scope of “network platform operator” or the criteria for determining which circumstance falls within the definition of “holding over one million users’ personal information.” Furthermore, on November 14, 2021, the CAC commenced to publicly solicit comments on the Regulations on the Administration of Cyber Data Security (Draft for Comments). This draft regulation provides that, among others, data processors that handle personal information of more than one million people contemplating to list its securities on a foreign stock exchange should apply for cybersecurity review. As a result, if the draft regulation is promulgated as it is, it is possible that we may be required to go through cybersecurity review by the CAC.

It remains unclear as to how mainland China regulations may further evolve, how mainland China’s governmental authorities will regulate overseas listing in general and whether we will be required to obtain any specific regulatory approvals from, or complete any filing procedures with, the CSRC, the CAC or any other mainland China’s governmental authorities for our offerings outside mainland China. Therefore, there can be no assurance that we will not be required to apply for a cybersecurity review pursuant to the Measures for Cybersecurity Review or a data security assessment pursuant to the Measures for Security Assessment of Cross-Border Data Transfer. To the extent any cybersecurity review or data security assessment is required, we cannot assure you that we will be able to complete it in a timely manner, or at all, and such approvals may be rescinded even if obtained. As of the date of this annual report, we have not been subject to any cybersecurity review under the Measures for Cybersecurity Review or data security assessment pursuant to the Measures for Security Assessment of Cross-Border Data Transfer.

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If we fail to obtain the relevant approval or complete other filing or review procedures for our operations and/or any future offshore offering or listing, we may face sanctions by the CSRC or other regulatory authorities of mainland China, which may include warnings, fines, suspension of business to rectify, revocation of licenses, cancellation of filings, shutdown of our platform or even criminal liability, limitations on our operating privileges in mainland China, restrictions on or prohibition of the payments or remittance of dividends by our subsidiaries in mainland China, restrictions on or delays to our future financing transactions outside mainland China, or other actions that could have a material and adverse effect on our business, financial condition, results of operations, reputation and prospects, as well as the trading price of our ADSs. For more detailed information, see “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry—Our business is subject to complex and evolving laws and regulations across the globe regarding cybersecurity, information security, privacy and data protection. Many of these laws and regulations are subject to interpretation, and any failure or perceived failure to comply with these laws and regulations could result in claims, changes to our business practices, negative publicity, legal proceedings, increased cost of operations, or declines in user growth or engagement, or otherwise harm our business” and “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in Jurisdictions We Operate—The approval of and the filing with the CSRC or other government authorities of mainland China may be required in connection with our offerings and financing activities outside mainland China in the future under the laws of mainland China, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing”

For our operations in mainland China, we also face risks associated with oversight on cybersecurity and data privacy and anti-monopoly regulatory actions. These may impact our ability to conduct certain businesses, accept foreign investments, or list on a United States or other foreign exchange. Implementation of industry-wide regulations, including data security or anti-monopoly related regulations, in this nature may cause the value of such securities to significantly decline or become worthless. Risks and uncertainties arising from the legal system in mainland China, including risks and uncertainties regarding the enforcement of laws and quickly evolving rules and regulations in mainland China, could result in a material adverse change in our operations in mainland China and the value of our ADSs.

Cash and Asset Flows through Our Organization

JOYY Inc. is a holding company with no material operations of its own. We conduct our operations primarily through our subsidiaries, the variable interest entities and their subsidiaries incorporated under the laws of various jurisdictions where we have business presence. As a result, JOYY Inc.’s ability to pay dividends depends upon dividends paid by our subsidiaries, which may be subject to restrictions imposed by the applicable laws and regulations in these jurisdictions. In certain jurisdictions, such as Singapore, there are currently no foreign exchange regulations which regulate the ability of our subsidiaries in these jurisdictions to distribute dividends to us. However, the relevant regulations may change and the ability of these subsidiaries to distribute dividends to us may be restricted in the future. As for the jurisdiction of mainland China, under the laws and regulations thereof, if our existing subsidiaries in mainland China or any newly formed ones incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends to us. In addition, our wholly foreign-owned subsidiaries in mainland China are permitted to pay dividends to us only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. Under the laws and regulations of mainland China, each of our subsidiaries and the variable interest entities in mainland China is required to make appropriations to certain statutory reserve funds or may make appropriations to certain discretionary funds, which are not distributable as cash dividends except in the event of a solvent liquidation of the companies. For more details, see “Item 5. Operating and Financial Review and Prospects—Liquidity and Capital Resources—Holding Company Structure.”

We have established stringent controls and procedures for cash flows within our organization. Each transfer of cash between our Cayman Islands holding company and our subsidiaries, the variable interest entities or the subsidiaries of the variable interest entities is subject to internal approval. The cash inflows of the Cayman Islands holding company were primarily generated from the proceeds we received from our public offerings of common shares, our offerings of convertible senior notes and other financing activities.

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Under the laws and regulations of mainland China, JOYY Inc. may provide funding to its subsidiaries in mainland China only through capital contributions or loans, and to the variable interest entities only through loans, subject to satisfaction of applicable government registration and approval requirements. Currently, there is no statutory limit to the amount of funding that we can provide to our subsidiaries in mainland China through capital contributions. However, the maximum amount we can loan to our subsidiaries and the variable interest entities in mainland China is subject to statutory limits. According to the current laws and regulations of mainland China, we can provide funding to our subsidiaries in mainland China through loans of up to either (i) the amount of the difference between the respective registered total investment amount and registered capital of each of our subsidiaries in mainland China, or (ii) two times, or the then applicable statutory multiple, the amount of their respective net assets, calculated in accordance with PRC GAAP, at our election. We may also fund the variable interest entities through cross-border loans and the maximum amount would be their respective limits calculated based on net assets. Increasing the difference between the respective registered total investment amount and registered capital of our subsidiaries in mainland China is subject to governmental procedures and may require a subsidiary in mainland China to increase its registered capital at the same time. If we choose to make a loan to an entity in mainland China based on its limit calculated based on net assets, the maximum amount we would be able to loan to the relevant entity in mainland China would depend on the relevant entity’s net assets and the applicable statutory multiple at the time of calculation. For details, see “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in Jurisdictions We Operate—Regulations of mainland China in relation to offshore investment activities by mainland China residents and direct investment and loans by offshore holding companies to entities in mainland China may delay or limit our ability to effectively use the proceeds of our offshore financing activities.”

For the years ended December 31, 2021, 2022 and 2023, JOYY Inc., through its intermediate holding companies, provided capital contributions of US$7.8 million, US$8.7 million and US$20.0 million, respectively, to our subsidiaries in mainland China.

For the years ended December 31, 2021, 2022 and 2023, JOYY Inc. did not provide any loan to our intermediate holding companies and subsidiaries, and received repayments of US$723.3 million, US$365.5 million and US$622.2 million, respectively.

For the years ended December 31, 2021, 2022 and 2023, cash paid by the variable interest entities to our subsidiaries for the settlement of technical support fees and software transactions were US$114.6 million, US$109.7 million and US$86.1 million, respectively. For the years ended December 31, 2021, 2022 and 2023, cash received by the variable interest entities from our subsidiaries were US$129.4 million, US$9.7 million and US$14.5 million, respectively, as the revenues earned from our subsidiaries. In the future, to the extent there is any fee owed to our subsidiaries in mainland China under the contractual arrangements with the variable interest entities, the variable interest entities intend to settle it.

For the years ended December 31, 2021, 2022 and 2023, the variable interest entities’ cash flows for investing activities provided to our subsidiaries were net cash outflows of US$35.6 million, US$194.1 million and US$129.1 million, respectively. For the years ended December 31, 2021, 2022 and 2023, the variable interest entities’ cash flows for financing activities provided by our subsidiaries were net cash inflows of US$5.4 million, US$32.8 million and US$0.5 million, respectively.

For the years ended December 31, 2021, 2022 and 2023, no assets other than cash were transferred between the Cayman Islands holding company and a subsidiary, a variable interest entity or its subsidiary within our corporate structure, and no subsidiaries paid dividends or made other distributions to JOYY Inc. For details of the financial position, cash flows and results of operations of the variable interest entities, see “—Financial Information Related to the Variable Interest Entities” and Note 4(a) to our audited consolidated financial statements included elsewhere in this annual report.

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Under laws and regulations of mainland China, our subsidiaries and the variable interest entities in mainland China are subject to certain restrictions with respect to paying dividends or otherwise transferring any of their net assets to us. Remittance of dividends by a wholly foreign-owned enterprise out of mainland China is also subject to examination by the banks designated by the State Administration of Foreign Exchange, or SAFE. Current regulations of mainland China permit our subsidiaries in mainland China to pay dividends to us only out of their accumulated after-tax profits upon satisfaction of relevant statutory condition and procedures, if any, determined in accordance with PRC accounting standards and regulations. In addition, each of our subsidiaries in mainland China is required to set aside at least 10% of its accumulated profits each year, if any, to fund certain reserve funds until the total amount set aside reaches 50% of its registered capital. As of December 31, 2023, appropriations to statutory reserves amounting to US$37.7 million were made by our subsidiaries in mainland China and the variable interest entities. These reserves are not distributable as cash dividends. Furthermore, if our subsidiaries and the variable interest entities in mainland China incur debt on their own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments to us, which may restrict our ability to satisfy our liquidity requirements. In addition, the PRC Enterprise Income Tax Law and its implementation rules provide that withholding tax rate of 10% will be applicable to dividends payable by companies in mainland China to non-mainland-China-resident enterprises unless otherwise exempted or reduced according to treaties or arrangements between the mainland China’s central government and governments of other countries or regions where the non-mainland-China-resident enterprises are incorporated. For details, see “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in Jurisdictions We Operate—Our subsidiaries and the variable interest entities in mainland China are subject to restrictions on paying dividends or making other payments to us, which may restrict our ability to satisfy our liquidity requirements.” As of the date of this annual report, the majority of our revenue and operating cash are currently generated from subsidiaries outside of mainland China, and our reliance on dividends from subsidiaries in mainland China is limited. However, uncertainties remain as to whether YY Live will be returned to us for re-consolidation due to Baidu’s purported termination of the share purchase agreement in connection with the sale of YY Live. If revenue contribution by business operations in mainland China increases due to the re-consolidation of YY Live, we will be exposed to additional risks relating to heightened reliance on our subsidiaries and the variable interest entities in mainland China.

For the years ended December 31, 2021, 2022 and 2023, JOYY Inc. declared and distributed cash dividends in accordance with its three-year quarterly dividend policies adopted in 2020. The quarterly dividend policies both expired and we paid dividends in a net aggregate amount of US$454.8 million in accordance with these quarterly dividend policies. See “Item 8. Financial Information—A. Consolidated Statements and Other Financial Information-Dividend Policy.” For the material Cayman Islands, Singapore, mainland China and U.S. federal income tax consequences of an investment in our ADSs or common shares, see “Item 10. Additional Information—E. Taxation.”

Financial Information Related to the Variable Interest Entities

The following table presents the condensed consolidating schedule of financial information of JOYY Inc., the variable interest entities, the primary beneficiaries of the variable interest entities, and other equity subsidiaries for the periods and as of the dates presented.

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Selected Condensed Consolidating Statements of Operations and Comprehensive Income (Loss) Data

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Notes:

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Selected Condensed Consolidating Balance Sheets Data

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