10q10k10q10k.net

What changed in Sea Ltd's 20-F — 2022 vs 2023

vs

Paragraph-level year-over-year comparison of Sea Ltd's 2022 and 2023 20-F annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+791 added−770 removedSource: 20-F (2024-04-26) vs 20-F (2023-04-06)

Top changes in Sea Ltd's 2023 20-F

791 paragraphs added · 770 removed · 620 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

207 edited+43 added−44 removed328 unchanged
Biggest changeRisks Related to Our Digital Entertainment Business • We derive a significant portion of digital entertainment revenue and gross profit from a limited number of online games. • We have a limited track record in game development and global game distribution. • We rely on third-party game developers for some of our digital entertainment content and also allow our users to contribute and interact with user generated content. • Our games are subject to scrutiny regarding the appropriateness of their content. 7 Table of Contents Risks Related to Our Digital Financial Services Business • We face uncertainties and risks relating to our digital financial services business. • We face risks related to our lending and consumer and merchant credit businesses. • Our banking and consumer and merchant credit businesses are subject to credit cycle volatility and risk of credit losses. • Our banking business may subject us to additional material business, operational, financial, legal and compliance requirements and risks. • We face risks related to our insurance business. • We could be held liable if our digital financial services and products are used for fraudulent, illegal or improper purposes.
Biggest changeRisks Related to Our Digital Financial Services Business • We face uncertainties and risks relating to our digital financial services business. • We face risks related to our credit and banking businesses. • Our banking business may subject us to additional material business, operational, financial, legal and compliance requirements and risks. • We face risks related to our insurance business. • We could be held liable if our digital financial services and products are used for fraudulent, illegal or improper purposes. 8 Table of Contents Risks Related to Our Digital Entertainment Business • We derive a significant portion of digital entertainment revenue and gross profit from a limited number of online games. • We have a limited track record in game development and global game distribution. • We rely on third-party game developers for some of our digital entertainment content and also allow our users to contribute and interact with user generated content. • Our games are subject to scrutiny regarding the appropriateness of their content.
O ur operations and expansions in new markets may become subject to risks associated with: 13 Table of Contents • user acceptance of a digital economy, especially in the new markets to which we may expand in the future; • lack of experience operating in these new markets, including our ability to understand different user behaviors and/or culture in new markets and roll-out relevant products and services localized to each market’s needs or preferences; • challenges in adapting our approach and strategies in existing markets to new markets; • recruiting and retaining talented and capable management and employees in various markets; • our ability to appropriately deploy resources and management attention that otherwise would be focused on the development of our existing markets and businesses; • limited technology infrastructure and low levels of use of the internet; • challenges caused by distance, language and cultural differences, and local and regional competitive landscapes; • providing content and services that appeal to the tastes and preferences of users in a larger number of markets; • implementing our businesses in a manner that complies with local laws and practices, which may differ significantly from market to market, including laws regarding data protection, privacy, network security, cybersecurity, encryption and payments; • maintaining adequate internal and accounting control across various markets, each with its own accounting principles that must be reconciled to U.S.
O ur operations and expansions in new markets may become subject to risks associated with: • user acceptance of a digital economy, especially in the new markets to which we may expand in the future; 13 Table of Contents • lack of experience operating in these new markets, including our ability to understand different user behaviors and/or culture in new markets and roll-out relevant products and services localized to each market’s needs or preferences; • challenges in adapting our approach and strategies in existing markets to new markets; • recruiting and retaining talented and capable management and employees in various markets; • our ability to appropriately deploy resources and management attention that otherwise would be focused on the development of our existing markets and businesses; • limited technology infrastructure and low levels of use of the internet; • challenges caused by distance, language and cultural differences, and local and regional competitive landscapes; • providing content and services that appeal to the tastes and preferences of users in a larger number of markets; • implementing our businesses in a manner that complies with local laws and practices, which may differ significantly from market to market, including laws regarding data protection, privacy, network security, cybersecurity, encryption and payments; • maintaining adequate internal and accounting control across various markets, each with its own accounting principles that must be reconciled to U.S.
Such restrictions may alter the way in which we do business, increase our costs or liabilities or reduce demand for our platforms, which could adversely affect our business, financial condition and results of operations. From time to time we have received inquiries from or are subject to investigations by competition authorities.
Such restrictions may alter the way in which we do business, increase our costs or liabilities or reduce demand for our platforms, which could adversely affect our business, financial condition and results of operations. From time to time, we have received inquiries from or are subject to inquiries and investigations by competition authorities.
Our ability to obtain external financing in the future is subject to a variety of uncertainties, including market conditions, our future financial condition, results of operations, cash flows, share price performance, liquidity of international capital and lending markets, governmental regulations over foreign investment and the e-commerce, digital entertainment and digital financial services industries in our various markets.
Our ability to obtain external financing in the future is subject to a variety of uncertainties, including market conditions, our future financial condition, results of operations, cash flows, share price performance, liquidity of international capital and lending markets, governmental regulations over foreign investment and the e-commerce, digital financial services, and digital entertainment industries in our various markets.
OECD has also introduced Global Anti-Base Erosion Rules to ensure that multinational enterprises pay a minimum level of tax on the income arising in each of the jurisdictions where they operate.
The OECD has also introduced Global Anti-Base Erosion Rules to ensure that multinational enterprises pay a minimum level of tax on the income arising in each of the jurisdictions where they operate.
Any of these factors could materially and adversely affect our business, financial condition and results of operations. We have limited business insurance coverage. We do not have extensive insurance coverage.
Any of these factors could materially and adversely affect our business, financial condition and results of operations. We have limited insurance coverage. We do not have extensive insurance coverage.
Accordingly, our use of the terms referring to our geographic markets and industries such as e-commerce, digital entertainment and digital financial services markets may be subject to interpretation, and the resulting industry data, projections and estimates may not be reliable.
Accordingly, our use of the terms referring to our geographic markets and industries such as e-commerce, digital financial services, and digital entertainment markets may be subject to interpretation, and the resulting industry data, projections and estimates may not be reliable.
Our businesses and our directors and officers may be, and in some instances have been, subject to claims, lawsuits (including class actions and individual lawsuits), regulatory and government investigations, and other proceedings relating to alleged infringement or violation of third-party intellectual property rights, consumer protection, privacy and data protection, content restrictions, labor and employment, import and export practices, antitrust or competition, securities, tax, marketing and communications practices, contracts, commercial disputes, consumer complaints, and various other matters.
Our businesses and our directors and officers may be, and in some instances are or have been, subject to claims, lawsuits (including class actions and individual lawsuits), regulatory and government investigations, and other proceedings relating to alleged infringement or violation of third-party intellectual property rights, consumer protection, privacy and data protection, content restrictions, labor and employment, import and export practices, antitrust or competition, securities, tax, marketing and communications practices, contracts, commercial disputes, consumer complaints, and various other matters.
Our user base and engagement could be adversely affected if: • we fail to maintain the popularity of our platforms among users; • we are unable to maintain the quality of our existing content and services; • we are unsuccessful in innovating or introducing new, best-in-class content and services; • we fail to adapt to changes in user preferences, market trends or advancements in technology; • technical, regulatory, governmental or other reasons prevent us from delivering our content or services in a timely and reliable manner, or at all, or otherwise affect the user experience; • there are user concerns related to privacy, data protection, safety, fund security or other factors; • monetization and cost reduction measures by us cause users to reduce their activity on our platforms or shift to other platforms; • new games cause players to shift from our existing games without growing the overall size of our user base or online games platform; • there are adverse changes to our platforms or offerings that are mandated by, or that we elect to make, to address legislation, regulation, government orders, or litigation, including settlements or consent decrees; • our users fail to accept or comply with our terms of service or the privacy policies that we have implemented or may implement, or we adopt terms, policies, or procedures that are perceived negatively by our users; • our marketing campaigns or promotional strategies fail to achieve the intended effect among users – for example, users may develop negative perceptions towards our marketing campaigns or promotional strategies; • we are unable to achieve the expected synergies among our businesses, we are unable to achieve synergies in a cost-effective manner, or we fail to balance the interests of all participants in our ecosystem; • we fail to maintain the brand image of our platforms or our reputation is damaged or changes negatively; or • changes to demographic trends or economic development affect our markets.
Our user base and engagement could be adversely affected if: • we fail to maintain the popularity of our platforms among users; • we are unable to maintain the quality of our existing content and services; • we are unsuccessful in innovating or introducing new, best-in-class content and services; • we fail to adapt to changes in user preferences, market trends or advancements in technology; • technical, regulatory, governmental or other reasons prevent us from delivering our content or services in a timely and reliable manner, or at all, or otherwise affect the user experience; • there are user concerns related to privacy, data protection, safety, fund security or other factors; • monetization and cost reduction measures by us cause users to reduce their activity on our platforms or shift to other platforms; 9 Table of Contents • new games cause players to shift from our existing games without growing the overall size of our user base or online games platform; • there are adverse changes to our platforms or offerings that are mandated by, or that we elect to make, to address legislation, regulation, government orders, or litigation, including settlements or consent decrees; • our users fail to accept or comply with our terms of service or the privacy policies that we have implemented or may implement, or we adopt terms, policies, or procedures that are perceived negatively by our users; • our marketing campaigns or promotional strategies fail to achieve the intended effect among users – for example, users may develop negative perceptions towards our marketing campaigns or promotional strategies; • we are unable to achieve the expected synergies among our businesses, we are unable to achieve synergies in a cost-effective manner, or we fail to balance the interests of all participants in our ecosystem; • we fail to maintain the brand image of our platforms or our reputation is damaged or changes negatively; or • changes to demographic trends or economic development affect our markets.
As Shopee is readily identifiable, buyers may seek claims against us rather than the seller, which in the aggregate could be costly to defend. We also receive inquiries or demands from regulators and law enforcement regarding defective, unregistered, unlicensed or fraudulent products sold by sellers through our Shopee platform.
As Shopee is readily identifiable, buyers may seek claims against us rather than the seller, which in the aggregate could be costly to defend. We also receive inquiries or demands from regulators and law enforcement regarding defective, unregistered, unlicensed or fraudulent or restricted products sold by sellers through our Shopee platform.
If any of these occurrences results in our inability to direct the activities of our VIEs or Thai subsidiaries that most significantly impact such entity’s economic performance, or prevent us from receiving the economic benefits or absorbing losses from such entity, we may not be able to consolidate the entity in our consolidated financial statements in accordance with U.S. GAAP.
If any of these occurrences results in our inability to direct the activities of our VIEs or Thai subsidiaries that most significantly impact such entity’s economic performance, or prevent us from receiving the economic benefits or absorbing losses from such entity, we may not be able to consolidate the entity in our consolidated financial statements in accordance with U.S.
Such laws, regulations and guidelines may impose rules and/or restrictions on the type of banking products and services we offer, eligibility criteria of our customers, related party transactions, market entry, risk management, corporate governance, minimum capital requirements, capital adequacy, liquidity and/or regulatory ratios, and tax and accounting policies, among other things.
Such laws, regulations and guidelines may impose rules and/or restrictions on the type of banking products and services we offer, eligibility criteria of our customers, related party transactions, market entry, risk management, corporate governance, regulatory capital requirements, capital adequacy, liquidity and/or regulatory ratios, and tax and accounting policies, among other things.
In addition, in September 2022, Tencent granted an irrevocable voting proxy with respect to all its Class A ordinary shares to our board of directors to vote on matters that are subject to the vote of shareholders of Sea. Such proxy gives our board of directors (duly constituted from time to time) approximately 8.7% of voting power. See “Item 6.
In addition, in September 2022, Tencent granted an irrevocable voting proxy with respect to all its Class A ordinary shares to our board of directors to vote on matters that are subject to the vote of shareholders of Sea. Such proxy gives our board of directors (duly constituted from time to time) approximately 8.6% of voting power. See “Item 6.
Upon the effectiveness of such amendment, the voting power of our Class B ordinary shares increased from three votes per share to 15 votes per share on all matters subject to vote at general meetings of our company and Forrest Xiaodong Li, our founder, chairman and Group Chief Executive Officer, is the sole beneficial owner of all our Class B ordinary shares.
Upon the effectiveness of such amendment, the voting power of our Class B ordinary shares increased from three votes per share to 15 votes per share on all matters subject to vote at general meetings of our company and Forrest Xiaodong Li, our founder, chairman and Chief Executive Officer, is the sole beneficial owner of all our Class B ordinary shares.
The monetary, commercial or equivalent authorities in the markets in which we operate could impose new or additional licensing requirements, capital commitments, governance standards, reporting obligations or other regulatory requirements, requiring us to devote substantial operational and financial resources to comply with such requirements. We may fail to compete effectively.
The monetary, commercial, customs or equivalent authorities in the markets in which we operate could impose new or additional licensing requirements, capital commitments, governance standards, reporting obligations or other regulatory requirements, requiring us to devote substantial operational and financial resources to comply with such requirements. We may fail to compete effectively.
We face competition in each of our business lines and the failure to compete effectively in any of them could materially and adversely affect our business, financial condition and results of operations. Our e-commerce business faces competition from global and regional players that operate across several markets, and from single-market players.
We face competition in each of our business lines and the failure to compete effectively in any of them could materially and adversely affect our business, financial condition and results of operations. Our e-commerce business faces competition from global and regional players and retailers that operate across several markets, and from single-market players and retailers.
There are various factors used to help us assess the credit risks of our banking and consumer and merchant credit businesses. These factors may be based on limited history or be beyond our control, and we may be unable to accurately predict the creditworthiness of a borrower, merchant or consumer due to inaccurate assumptions.
There are various factors used to help us assess the credit risks of our banking and consumer and SME credit businesses. These factors may be based on limited history or be beyond our control, and we may be unable to accurately predict the creditworthiness of a borrower, merchant or consumer due to inaccurate assumptions.
If local authorities find that our arrangements do not comply with their prohibition or restrictions on foreign investment in our lines of business, or if the relevant government otherwise finds that we or any of our subsidiaries, VIEs or their subsidiaries are in violation of the relevant laws or regulations or lack the necessary registrations, permits or licenses to operate our businesses in such jurisdictions, they would have broad discretion in dealing with such violations or failures, including: • revoking the business licenses and/or operating licenses of such entities; • discontinuing or placing restrictions or onerous conditions on the operations of our VIEs or Thai subsidiaries, or on our operations through any transactions between our company or our Cayman Islands or Singapore subsidiaries on the one hand and our VIEs, subsidiaries of such VIEs or our Thai subsidiaries on the other hand; 36 Table of Contents • imposing fines, prohibiting payments by our VIEs or their shareholders to us as contemplated in the contractual arrangements with our VIEs, confiscating income from us, our Cayman Islands or Singapore subsidiaries, VIEs or Thai subsidiaries, or imposing other requirements with which such entities may not be able to comply; • imposing criminal penalties, including fines and imprisonment on our VIEs or Thai subsidiaries, their shareholders or directors; • requiring us to restructure our ownership structure or operations, including terminating the contractual arrangements with our VIEs and their shareholders, which in turn would affect our ability to consolidate, derive economic interests from, or exert effective control over our VIEs or Thai subsidiaries; or • restricting or prohibiting us from providing funding to our business and operations in Vietnam and Thailand.
If local authorities find that our arrangements do not comply with their prohibition or restrictions on foreign investment in our lines of business, or if the relevant government otherwise finds that we or any of our subsidiaries, VIEs or their subsidiaries are in violation of the relevant laws or regulations or lack the necessary registrations, permits or licenses to operate our businesses in such jurisdictions, they would have broad discretion in dealing with such violations or failures, including: • revoking the business licenses and/or operating licenses of such entities; • discontinuing or placing restrictions or onerous conditions on the operations of our VIEs or Thai subsidiaries, or on our operations through any transactions between our company or our Cayman Islands or Singapore subsidiaries on the one hand and our VIEs, subsidiaries of such VIEs or our Thai subsidiaries on the other hand; • imposing fines, prohibiting payments by our VIEs or their shareholders to us as contemplated in the contractual arrangements with our VIEs, confiscating income from us, our Cayman Islands or Singapore subsidiaries, VIEs or Thai subsidiaries, or imposing other requirements with which such entities may not be able to comply; • imposing criminal penalties, including fines and imprisonment on our VIEs or Thai subsidiaries, their shareholders or directors; • requiring us to restructure our ownership structure or operations, including terminating the contractual arrangements with our VIEs and their shareholders, which in turn would affect our ability to consolidate, derive economic interests from, or exert effective control over our VIEs or Thai subsidiaries; or • restricting or prohibiting us from providing funding to our business and operations in Vietnam and Thailand.
In addition to market and industry factors, the price and trading volume for the ADSs may be highly volatile for factors specific to our own operations, including the following: • variations in our quarterly or annual revenue, earnings and cash flow; • guidance or other projections we may provide to the public, including any changes or failure to meet any guidance or other projections; • announcements of new investments, acquisitions, strategic partnerships or joint ventures by us or our competitors; • announcements of new content and services or plans of expansion or exits by us or our competitors; • changes in financial estimates by securities analysts and data providers, or our failure to meet these estimates or the expectations of investors; • downgrades by industry or securities analysts that publish research or reports on us; 41 Table of Contents • detrimental adverse publicity about us, our businesses or our industries or investor sentiment with respect to our competitors, our shareholders and investors, and our industry in general; • additions or departures of key personnel; • release of lock-up or other transfer restrictions on our outstanding equity securities or sales of additional equity securities, including the perception that these sales could occur; • dilution of the ownership interests of our ADS holders due to conversions of our 2023, 2024, 2025 and 2026 convertible notes, which we may choose to settle by issuing ADSs, or from the unwinding of capped call transactions in connection with our 2024 and 2025 convertible notes; • current or potential litigation, government actions or regulatory investigations, including class actions; • volatility in the stock market, including price and volume fluctuations in the overall stock market, changing trends in the economy, interest rate hikes or other interest rate-related decisions; and • general political, economic, or market conditions, or other events or factors, including those resulting from war, incidents of terrorism, pandemics, and other disruptive external events, or responses to these events.
In addition to market and industry factors, the price and trading volume for the ADSs may be highly volatile for factors specific to our own operations, including the following: • variations in our quarterly or annual revenue, earnings and cash flow; • guidance or other projections we may provide to the public, including any changes or failure to meet any guidance or other projections; • announcements of new investments, acquisitions, strategic partnerships or joint ventures by us or our competitors; • announcements of new content and services or plans of expansion or exits by us or our competitors; • changes in financial estimates by securities analysts and data providers, or our failure to meet these estimates or the expectations of investors; • downgrades by industry or securities analysts that publish research or reports on us; • detrimental adverse publicity about us, our businesses or our industries or investor sentiment with respect to our competitors, our shareholders and investors, and our industry in general; • additions or departures of key personnel; • release of lock-up or other transfer restrictions on our outstanding equity securities or sales of additional equity securities, including the perception that these sales could occur; • dilution of the ownership interests of our ADS holders due to conversions of our 2024, 2025 and 2026 convertible notes, which we may choose to settle by issuing ADSs, or from the unwinding of capped call transactions in connection with our 2024 and 2025 convertible notes; • current or potential litigation, government actions or regulatory investigations, including class actions; • volatility in the stock market, including price and volume fluctuations in the overall stock market, changing trends in the economy, interest rate hikes or other interest rate-related decisions; and • general political, economic, or market conditions, or other events or factors, including those resulting from war, incidents of terrorism, pandemics, and other disruptive external events, or responses to these events.
Investments and acquisitions entail uncertainties and risks, such as: 17 Table of Contents • we may fail to successfully achieve the intended objectives; • our investments or acquisitions may be viewed negatively by customers, financial markets or investors; • the costs of identifying and consummating these transactions may be significant; • acquisitions and the subsequent integration of new assets and businesses into our own could require significant management attention and could divert resources from our existing businesses; • we may have difficulty in transitioning and integrating the business, technologies, products, personnel or operations of the acquired businesses; • we may face unforeseen operating challenges; • our relationships with existing employees, customers and business partners of our group, or those of the target, may be impaired; • we may assume pre-existing contractual relationships of an acquired company that we would not have otherwise entered into, the termination or modification of which may be costly or disruptive to our business; • an acquisition may result in a delay or reduction of customer purchases for both us and the company acquired due to customer uncertainty about continuity and effectiveness of service from either company; • we may face challenges associated with managing additional and/or geographically remote businesses; • investments and acquisitions could result in the use of substantial amounts of cash or significant capital contributions, which could limit other potential uses for our cash; • investments and acquisitions could result in increased leverage, dilutive issuances of equity securities, adverse tax consequences, goodwill impairment charges or write-offs, amortization expenses for other intangible assets; • if we incur debt to fund any investments or acquisitions, such debt may subject us to material restrictions on our ability to conduct our business, including financial maintenance covenants; • we may need to issue new shares as acquisition consideration or to raise additional capital to fund the acquisition consideration, which may dilute our existing investors’ interest in us; • we may assume unknown material liabilities of acquired companies, or may be exposed to claims and disputes by shareholders and third parties, including intellectual property claims and disputes; • we may be unsuccessful in accurately projecting revenue, cost or other metrics of the invested or acquired entity in the due diligence process; • the invested or acquired assets or businesses may not generate the financial results we expect; and • the market value of our investments or acquisitions may fluctuate, particularly in volatile markets, or they may become obsolete.
Investments and acquisitions entail uncertainties and risks, such as: 17 Table of Contents • we may fail to successfully achieve the intended objectives; • our investments or acquisitions may be viewed negatively by customers, financial markets or investors; • the costs of identifying and consummating these transactions may be significant; • acquisitions and the subsequent integration of new assets and businesses into our own could require significant management attention and could divert resources from our existing businesses; • we may have difficulty in transitioning and integrating the business, technologies, products, personnel or operations of the acquired businesses; • we may face unforeseen operating challenges; • our relationships with existing employees, customers and business partners of our group, or those of the target, may be impaired; • we may assume pre-existing contractual relationships of an acquired company that we would not have otherwise entered into, the termination or modification of which may be costly or disruptive to our business; • an acquisition may result in a delay or reduction of customer purchases for both us and the company acquired due to customer uncertainty about continuity and effectiveness of service from either company; • we may face challenges associated with managing additional and/or geographically remote businesses; • investments and acquisitions could result in the use of substantial amounts of cash or significant capital contributions, which could limit other potential uses for our cash; • investments and acquisitions could result in increased leverage, dilutive issuances of equity securities, adverse tax consequences, goodwill impairment charges, investment impairment charges or write-offs, and amortization expenses for other intangible assets; • if we incur debt to fund any investments or acquisitions, such debt may subject us to material restrictions on our ability to conduct our business, including financial maintenance covenants; • we may need to issue new shares as acquisition consideration or to raise additional capital to fund the acquisition consideration, which may dilute our existing investors’ interest in us; • we may assume unknown material liabilities of acquired companies, or may be exposed to claims and disputes by shareholders and third parties, including intellectual property claims and disputes; • we may be unsuccessful in accurately projecting revenue, cost or other metrics of the invested or acquired entity in the due diligence process; • the invested or acquired assets or businesses may not generate the financial results we expect; and • the market value of our investments or acquisitions may fluctuate, particularly in volatile markets, or they may become obsolete. 18 Table of Contents These factors could adversely affect our financial results.
We may be liable for security breaches and attacks against our or our third-party partners’ platforms and network, particularly with regard to confidential user information and personal or other data or any other privacy or data protection compliance issue, and our platforms and games may contain unforeseen “bugs” or errors.
We may be liable for security breaches and attacks against our or our third-party partners’ platforms and network, particularly with regard to confidential user information and personal or other data or any other privacy or data protection compliance issue, and our platforms and games may contain unforeseen “bugs”, vulnerabilities or errors.
In order to sustain monetization of our digital entertainment business, we must maintain paying users and convert active game players to paying users and increase their spending. Spending in our games is discretionary and our users may be price-sensitive, which may negatively affect our ability to monetize our business.
In order to sustain monetization of our digital entertainment business, we must maintain paying users and convert active game players to paying users and increase their spending. Spending on our games is discretionary and our users may be price-sensitive, which may negatively affect our ability to monetize our business.
Conversion of Thai baht to another currency is subject to regulations promulgated by the Ministry of Finance and Bank of Thailand. Conversion of Indonesian rupiah into any foreign currency that exceeds certain specific threshold is required to have an underlying transaction and supported by underlying transaction documents.
Conversion of Thai baht to another currency is subject to regulations promulgated by the Ministry of Finance and Bank of Thailand. Conversion of Indonesian rupiah into any foreign currency that exceeds a certain specific threshold is required to have an underlying transaction and supported by underlying transaction documents.
Our memorandum and articles of association contain a dual-class voting structure that gives disproportionate voting power to the Class B ordinary shares, all of which are held by Forrest Xiaodong Li, our founder, chairman and Group Chief Executive Officer.
Our memorandum and articles of association contain a dual-class voting structure that gives disproportionate voting power to the Class B ordinary shares, all of which are held by Forrest Xiaodong Li, our founder, chairman and Chief Executive Officer.
Competitors in the digital banking space such as banks and larger financial institutions may be able to offer more extensive or enhanced products and services, or offer such products and services at more attractive rates, credit or other terms, including more attractive rates on deposits and rates on loans.
Competitors in the banking space such as banks and larger financial institutions may be able to offer more extensive or enhanced products and services, or offer such products and services at more attractive rates, credit or other terms, including more attractive rates on deposits and rates on loans.
If we are a PFIC for any taxable year during which a U.S. investor held the ADSs or Class A ordinary shares, the U.S. investor might be subject to increased U.S. federal income tax liability and to additional reporting obligations.
If we are a PFIC for any taxable year during which a U.S. investor held the ADSs or Class A ordinary shares, the U.S. investor might be subject to increased U.S. federal income tax and to additional reporting obligations.
Some of these regulations also implicate licensing requirements, and the variety of potentially applicable laws and regulations can make it difficult to know or determine which licenses and approvals are necessary, or the processes for obtaining them.
Some of these regulations also implicate licensing and approval requirements, and the variety of potentially applicable laws and regulations can make it difficult to know or determine which licenses and approvals are necessary, or the processes for obtaining them.
Any negative developments or occurrences to any of our key revenue-earning games including Free Fire, such as decline in popularity, content quality issues, competing products, content restrictions, government actions, regulatory or legal changes that affect our ability to monetize our games, reductions in consumer spending and engagement levels, delay or failure in producing new engaging content, or real or perceived security risks could lead to material decline or slower growth.
Any negative developments or occurrences to any of our key revenue-earning games including Free Fire, such as decline in popularity, content quality issues, competing products, content restrictions, government actions, regulatory or legal changes that affect our ability to monetize our games, reductions in consumer spending and engagement levels, delay or failure in producing new engaging content, or real or perceived security risks or data breaches could lead to material decline or slower growth.
This may lead to loss of revenues or increased cost of developing technological measures to respond to these, either of which could negatively affect our business, financial condition and results of operations .
This may lead to loss of revenues or increased cost of developing technological measures to respond to these, either of which could negatively affect our business, reputation, financial condition and results of operations .
We are subject to a variety of regulations, including those relating to game operations, game ratings, e-commerce, social networking, internet applications or content services, digital platforms, marketing, advertising, privacy, personal information, data use, data transfer, data processing, data localization, data storage, data retention and data protection, livestreaming services, antitrust or competition laws, employment and labor laws, national language requirements, intellectual property, virtual items, user generated content, loot boxes, national security, nationalization, content restrictions, platform regulations, sale of regulated or prohibited items, protection of minors, data of minors, consumer protection, pricing, product safety and product liability, prevention of money laundering and financing criminal activity and terrorism, anti-bribery and anti-corruption regulation, economic or other trade prohibitions or sanctions, electronic contracts and other communications, digital financial services regulation, electronic payment services regulation, foreign investment and currency control regulation and regulations related to logistics, insurance, and digital banking.
We are subject to a variety of regulations, including those relating to game operations, game ratings, e-commerce, social networking, internet applications or content services, digital platforms, marketing, advertising, artificial intelligence technology and services, privacy, personal information, data use, data transfer, data processing, data localization, data storage, data retention and data protection, livestreaming services, antitrust or competition laws, employment and labor laws, national language requirements, intellectual property, virtual items, user generated content, loot boxes, national security, nationalization, content restrictions, platform regulations, sale of regulated or prohibited items, protection of minors, data of minors, consumer protection, pricing, product safety and product liability, prevention of money laundering and financing criminal activity and terrorism, anti-bribery and anti-corruption regulation, economic or other trade prohibitions or sanctions, electronic contracts and other communications, digital financial services regulation, electronic payment services regulation, lending regulation, foreign investment and currency control regulation and regulations related to logistics, insurance, and banking.
In addition, to the extent Apple, Google, or any of our other platform providers or game distribution channels restrict the use of loot boxes or similar mechanism in games, we may need to adjust our game content or monetization strategy in order to continue distribution on such platforms or channels, which may cause a decline in the revenues generated from these games and require us to incur additional costs.
In addition, to the extent Apple, Alphabet, or any of our other platform providers or game distribution channels restrict the use of loot boxes or similar mechanism in games, we may need to adjust our game content or monetization strategy in order to continue distribution on such platforms or channels, which may cause a decline in the revenues generated from these games and require us to incur additional costs.
Each of our e-commerce, digital entertainment and digital financial services businesses involves the participation of third parties such as third-party game developers, owners of other third-party intellectual properties, users who generate content on our platforms, including livestreaming or other real-time content dissemination, sellers and merchants who own the content and services offered through our platforms, as well as intermediaries and other third-party service providers.
Each of our e-commerce, digital financial services and digital entertainment businesses involves the participation of third parties such as third-party game developers, owners of other third-party intellectual properties, users who generate content on our platforms, including livestreaming or other real-time content dissemination, sellers and merchants who own the content and services offered through our platforms, as well as intermediaries and other third-party service providers including other financial institutions providing financial services.
We are also uncertain as to whether we will be able to obtain the licenses we apply for in a timely manner or at all.
We are also uncertain as to whether we will be able to obtain the licenses or approvals we apply for in a timely manner or at all.
Our ability to continue to successfully monetize our digital financial services business in the future will depend significantly on our user base, the number of use cases available, the strengths of our credit modeling and risk management capability, and the availability of funds for our consumer and merchant credit business, which may not be achieved at the level we anticipate.
Our ability to continue to successfully monetize our digital financial services business in the future will depend significantly on our user base, the number of use cases available, the strengths of our credit modeling and risk management capability, and the availability of funds for our digital financial services business which may not be achieved at the level we anticipate.
These other shareholders may have interests that are inconsistent with ours. All or any such factors could have an adverse effect on our business, prospects, financial condition and results of operations. There may also be heightened government scrutiny of shareholding arrangements in industries or sectors that have foreign ownership restrictions.
These other shareholders may have interests that are inconsistent with ours. All or any such factors could have an adverse effect on our businesses, prospects, financial condition and results of operations. There may also be heightened government scrutiny of shareholding arrangements in industries or sectors that have foreign ownership restrictions.
Under the deposit agreement for the ADSs, the depositary will give us a discretionary proxy to vote our Class A ordinary shares underlying our ADSs at shareholders’ meetings if holders of ADSs do not give voting instructions to the depositary, unless: • we have failed to timely provide the depositary with our notice of meeting and related voting materials; • we have instructed the depositary that we do not wish a discretionary proxy to be given; • we have informed the depositary that there is substantial opposition as to a matter to be voted on at the meeting; or • a matter to be voted on at the meeting would have a material adverse impact on shareholders.
Under the deposit agreement for the ADSs, the depositary will give us a discretionary proxy to vote our Class A ordinary shares underlying our ADSs at shareholders’ meetings if holders of ADSs do not give voting instructions to the depositary, unless: • we have failed to timely provide the depositary with our notice of meeting and related voting materials; • we have instructed the depositary that we do not wish a discretionary proxy to be given; 43 Table of Contents • we have informed the depositary that there is substantial opposition as to a matter to be voted on at the meeting; or • a matter to be voted on at the meeting would have a material adverse impact on shareholders.
Similarly, our business, financial condition and results of operations could be materially and adversely affected by severe weather conditions, natural disasters, geopolitical events, terrorist attacks, wars, sanctions, the occurrence or re-occurrence of other outbreaks, epidemics or pandemics, including avian influenza, severe acute respiratory syndrome, the influenza A (H1N1) or H7N9, and other catastrophic events that disrupt our operations, adversely affect our markets or the economy generally or adversely affect our employees, third-party service providers, business partners or a significant portion of our users.
Our business, financial condition and results of operations could be materially and adversely affected by severe weather conditions, natural disasters, geopolitical events, terrorist attacks, wars, sanctions, the occurrence or re-occurrence of other outbreaks, epidemics or pandemics, including COVID-19, avian influenza, severe acute respiratory syndrome, the influenza A (H1N1) or H7N9, and other catastrophic events that disrupt our operations, adversely affect our markets or the economy generally or adversely affect our employees, third-party service providers, business partners or a significant portion of our users.
We rely on a number of third-party channels to provide content and services to our users, as well as performing other functions of our platform. For example, we primarily rely on third-party application distribution channels, such as the iOS App Store and the Google Play Store, to allow users to download and access our applications and games.
We rely on a number of third-party channels to provide content and services to our users, as well as performing other functions of our platforms. For example, we primarily rely on third-party application distribution channels, such as the iOS App Store and the Google Play Store, to allow users to download and access our applications and games.
Our management has concluded that our internal control over financial reporting is effective as of December 31, 2022. See “Item 15. Controls and Procedures—Management’s Annual Report on Internal Control over Financial Reporting.” Our independent registered public accounting firm has issued an attestation report on management’s assessment on the effectiveness of internal control over financial reporting.
Our management has concluded that our internal control over financial reporting is effective as of December 31, 2023. See “Item 15. Controls and Procedures—Management’s Annual Report on Internal Control over Financial Reporting.” Our independent registered public accounting firm has issued an attestation report on management’s assessment on the effectiveness of internal control over financial reporting.
The provision of financial services such as mobile wallet services, payment processing, cross-border e-commerce transactions, consumer and merchant credit products, insurtech and banking services and products are typically more regulated and subject to a broad range of complex laws and regulations that are rapidly changing.
The provision of financial services such as mobile wallet services, payment processing, cross-border e-commerce transactions, consumer and SME credit products, banking and insurtech services are typically more regulated and subject to a broad range of complex laws and regulations that are rapidly changing.
Although we have adopted measures to reduce infringements or offense by product listings on our Shopee platform before they appear on the marketplace, these efforts may not always be successful. In January 2023, the Office of the U.S.
Although we have adopted measures to reduce infringements or offense by product listings on our Shopee platform before they appear on the marketplace, these efforts may not always be successful. In January 2024, the Office of the U.S.
Adverse consequences for the failure to do so may include unanticipated system disruptions, security breaches, computer virus attacks, slower response times, impaired quality of experiences for our users and delays in reporting accurate operating and financial information. The internet infrastructure in some of the markets where we operate may not support the demands associated with continued growth in internet usage.
Adverse consequences for the failure to do so may include unanticipated system disruptions, security breaches, computer virus attacks, slower response times, impaired quality of experiences for our users and delays in reporting accurate operating and financial information. 31 Table of Contents The internet infrastructure in some of the markets where we operate may not support the demands associated with continued growth in internet usage.
Although there are trends of uptick of digital financial services and products across the globe, there is no certainty that this will continue or will result in widespread market acceptance of our digital financial services and products across all or any of the markets in which we operate.
Although there are trends of uptick of digital financial services and products across the globe, there is no guarantee that this will continue or will result in widespread market acceptance of our digital financial services and products across all or any of the markets in which we operate.
If local or national authorities reach a different conclusion, they would have broad discretion including imposing penalties, and the business operations of such entity could be disrupted, and our reputation may be damaged. 37 Table of Contents MARKETS RELATED RISKS Our businesses and operations in Taiwan may be materially and adversely impacted if we are deemed to be a PRC investor.
If local or national authorities reach a different conclusion, they would have broad discretion including imposing penalties, and the business operations of such entity could be disrupted, and our reputation may be damaged. MARKETS RELATED RISKS Our businesses and operations in Taiwan may be materially and adversely impacted if we are deemed to be a PRC investor.
Interruptions or failures in such logistics services could prevent the timely delivery of Shopee’s orders.
Interruptions or failures in such logistics services could prevent the timely or successful delivery of Shopee’s orders.
In particular, we will need to defend against the putative shareholder class action lawsuit described in “Item 8. Financial Information—A. Consolidated Statements and Other Financial Information—Legal and Administrative Proceedings,” including any appeals of such action. We are currently unable to ascertain the possible loss or possible range of loss, if any, associated with the resolution of this lawsuit.
In particular, we will need to defend against the putative shareholder class action lawsuits described in “Item 8. Financial Information—A. Consolidated Statements and Other Financial Information—Legal and Administrative Proceedings,” including any appeals of such action. We are currently unable to ascertain the possible loss or possible range of loss, if any, associated with the resolution of such lawsuits.
In Malaysia, the foreign exchange policy requires the approval of the Central Bank of Malaysia (BNM) for cross-border remittances which are either set out in the foreign exchange notices or applied for on an ad hoc basis.
In Malaysia, the foreign exchange policy requires the approval of the Central Bank of Malaysia (BNM) for cross-border remittances which are either set out in the foreign exchange policy notices (“FEP Notices”) or applied for on an ad hoc basis.
For example, credit risks may be affected by changes in the political, economic or social environment, volatility in the financial markets resulting from bank failures and disruptions to the banking system, market concerns related to the liquidity, solvency or capitalization of banks or other financial institutions, such as the availability and terms of government assistance to financial institutions under financial pressure and limited liquidity in accessing bank deposits, or credit cycles, rising interest rates, changes in consumer behavior, legal or regulatory changes, and other factors.
Credit risks may be affected by changes in the political, economic or social environment, volatility in the financial markets resulting from bank failures and disruptions to the banking system, market concerns related to the liquidity, solvency or capitalization of banks or other financial institutions, such as the availability and terms of government assistance to financial institutions under financial pressure and limited liquidity in accessing bank deposits, or credit cycles, rising interest rates, changes in user base or consumer behavior, legal or regulatory changes, and other factors.
Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse of corporate assets and subject us to potential delisting from the New York Stock Exchange, regulatory investigations and civil or criminal sanctions. We may be subject to risks related to litigation and regulatory proceedings.
Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse of corporate assets and subject us to potential delisting from the New York Stock Exchange, regulatory investigations and civil or criminal sanctions. 35 Table of Contents We may be subject to risks related to litigation and regulatory proceedings.
Factors that may contribute to the fluctuations of our results include, among others, (i) fluctuations and changes in overall consumer demand for our products and services in certain markets or overall or during certain months and holidays, including calendar year-end holiday season, or due to certain short-lived consumer trends, hypes or other factors; (ii) timing of new products and services releases and monetization rates of our products and services or content enhancements in different markets; (iii) increases in sales and marketing and other operating expenses; (iv) timing of promotional and marketing activities; (v) macro-economic conditions including recessionary fears or rising inflation and their effect on consumer spending; (vi) the impact of the COVID-19 pandemic, (vii) geopolitical conditions; and (viii) other risk factors as described in this annual report.
Factors that may contribute to the fluctuations of our results include, among others, (i) fluctuations and changes in overall consumer demand for our products and services in certain markets or overall or during certain months and holidays, including calendar year-end holiday season, or due to certain short-lived consumer trends, hypes or other factors; (ii) timing of new products and services releases and monetization rates of our products and services or content enhancements in different markets; (iii) increases in sales and marketing and other operating expenses; (iv) timing of promotional and marketing activities; (v) macro-economic conditions including recessionary fears, rising inflation or interest rates, and their effect on consumer spending; (vi) geopolitical conditions; and (vii) other risk factors as described in this annual report.
Operating and Financial Review and Prospects—A. Operating Results—Major Factors Affecting Our Results of Operations” and “Item 11. Quantitative and Qualitative Disclosures About Market Risk.” 20 Table of Contents We may enter into foreign exchange derivatives transactions and incur relevant costs from time to time to manage our exposure to exchange rate risk.
Operating and Financial Review and Prospects—A. Operating Results—Major Factors Affecting Our Results of Operations” and “Item 11. Quantitative and Qualitative Disclosures About Market Risk.” We may enter into foreign exchange derivatives transactions and incur relevant costs from time to time to manage our exposure to exchange rate risk.
As part of our continued efforts to encourage user participation and user content creation, we have recently introduced and begun to explore game features that enable users to contribute and interact with user generated content.
As part of our continued efforts to encourage user participation and user content creation, we have introduced and continued to explore game features that enable users to contribute and interact with user generated content.
Changes in current laws or regulations or the imposition of new laws and regulations regarding our industries may slow the growth of our industries and adversely affect our financial condition and results of operations. 39 Table of Contents It is not certain if Sea Limited will be classified as a Singapore tax resident.
Changes in current laws or regulations or the imposition of new laws and regulations regarding our industries may slow the growth of our industries and adversely affect our financial condition and results of operations. It is not certain if Sea Limited will be classified as a Singapore tax resident.
Holders of ADSs may not realize a return on their investment in our ADSs and may even lose their entire investment in our ADSs. Our memorandum and articles of association contain anti-takeover provisions and a dual-class voting structure that could have a material adverse effect on the rights of holders of our Class A ordinary shares and our ADSs.
Holders of ADSs may not realize a return on their investment in our ADSs and may even lose their entire investment in our ADSs. 44 Table of Contents Our memorandum and articles of association contain anti-takeover provisions and a dual-class voting structure that could have a material adverse effect on the rights of holders of our Class A ordinary shares and our ADSs.
Any costs incurred as a result of such liability or asserted liability could also harm our business. 21 Table of Contents As the number of interactive games increases and the features and content of these games continue to overlap, software developers and distributors have increasingly become subject to infringement claims.
Any costs incurred as a result of such liability or asserted liability could also harm our business. As the number of interactive games increases and the features and content of these games continue to overlap, software developers and distributors have increasingly become subject to infringement claims.
In addition, if internet access fees or other charges to internet users increase, our user traffic may decrease, which in turn may cause our revenue to decline. 31 Table of Contents We may fail to attract, motivate and retain the key members of our management team or other experienced and capable employees.
In addition, if internet access fees or other charges to internet users increase, our user traffic may decrease, which in turn may cause our revenue to decline. We may fail to attract, motivate and retain the key members of our management team or other experienced and capable employees.
The holders of our 2023, 2024, 2025 and 2026 convertible notes may convert their convertible notes in accordance with the instruments governing such convertible notes at the initial conversion rate of 50.5165 ADSs, 19.9475 ADSs, 11.0549 ADSs and 2.0964 ADSs per US$1,000 principal amount, respectively.
The holders of our 2024, 2025 and 2026 convertible notes may convert their convertible notes in accordance with the instruments governing such convertible notes at the initial conversion rate of 19.9475 ADSs, 11.0549 ADSs and 2.0964 ADSs per US$1,000 principal amount, respectively.
This means that holders of ADSs may not be able to exercise the right to vote and may have no legal remedy if the Class A ordinary shares underlying our ADSs are not voted as they requested. 45 Table of Contents Holders of ADSs may be subject to limitations on the transfer of their ADSs.
This means that holders of ADSs may not be able to exercise the right to vote and may have no legal remedy if the Class A ordinary shares underlying our ADSs are not voted as they requested. Holders of ADSs may be subject to limitations on the transfer of their ADSs.
If any collection personnel are involved with any misconduct or there are perceptions that our collection practices are considered to be aggressive or not compliant with relevant laws and regulations, our reputation and business may be harmed o r may become subject to fines or other penalties.
If any third-party collection personnel are involved with any misconduct or there are perceptions that these collection practices are considered to be aggressive or not compliant with relevant laws and regulations, our reputation and business may be harmed o r may become subject to fines or other penalties.
Accordingly, the effect of declines in our bookings are not fully reflected in our results of operations until future periods. We may fail to monetize our businesses effectively.
Accordingly, the effects of declines in our bookings are not fully reflected in our results of operations until future periods. We may fail to monetize our businesses effectively.
Governments in some of our markets have discussed promulgating or promulgated laws to require e-commerce marketplace operators to assist in the enforcement of tax requirements on sellers and collection of taxes with respect to revenues or profits generated by sellers.
Governments in some of our markets have discussed promulgating or promulgated laws to require e-commerce marketplace operators and the payment service providers to assist in the enforcement of tax requirements on sellers and collection of taxes with respect to revenues or profits generated by sellers.
Our user metrics may also differ from estimates published by third parties or from similarly titled metrics of our competitors due to differences in assumptions, methodologies or data used. 34 Table of Contents Errors or inaccuracies in our metrics or data could result in incorrect business decisions and inefficiencies.
Our user metrics may also differ from estimates published by third parties or from similarly titled metrics of our competitors due to differences in assumptions, methodologies or data used. Errors or inaccuracies in our metrics or data could result in incorrect business decisions and inefficiencies.
We have no control over these factors and fluctuations in fee or premium rates, and our revenues and profitability are subject to change to the extent that fee or premium rates fluctuate or trend in a particular direction. We could be held liable if our digital financial services and products are used for fraudulent, illegal or improper purposes.
We have no control over these factors and fluctuations in fee or premium rates, and our revenues and profitability are subject to change to the extent that fee or premium rates fluctuate or trend in a particular direction. 28 Table of Contents We could be held liable if our digital financial services and products are used for fraudulent, illegal or improper purposes.
It is costly to establish, develop and maintain international operations, adapt our business model to new or diverse regulatory environments and to promote our brand internationally. Our international operations may not become profitable on a sustainable basis, if at all.
It is costly to establish, develop and maintain international operations, adapt our business model to new or diverse regulatory environments and to promote our brand internationally. Our international operations may not become profitable on a sustainable basis.
As we further diversify our credit product offerings and services and our business scale remains large or further increase, we may require additional funds, explore alternative funding methods such as partnering with external funding providers or consider securitization of our credit portfolio.
As we further diversify our credit product offerings and services and our business scale remains large or further increase, we may explore alternative funding methods such as partnering with external funding providers or consider securitization of our credit portfolio.
Some local governments also exercise significant control over the economic growth and public order in their respective jurisdictions through allocating resources, controlling payment of foreign currency-denominated obligations, setting monetary policies, and providing preferential treatment to particular industries or companies.
Some local governments also exercise significant control over the economic growth, foreign capital investments, tax regulations and public order in their respective jurisdictions through allocating resources, controlling payment of foreign currency-denominated obligations, setting monetary policies, and providing preferential treatment to particular industries or companies.
Criminals are using increasingly sophisticated methods to engage in illegal activities such as counterfeiting and to gain unauthorized access to other users’ accounts. We could be subject to fraud or related claims if confidential information obtained from our users is used for unauthorized purposes.
Criminals are using increasingly sophisticated methods to capture consumer personal information and engage in illegal activities such as counterfeiting and to gain unauthorized access to other users’ accounts. We could be subject to fraud related claims if confidential information obtained from our users is used for unauthorized purposes.
We compete to attract, engage, and retain buyers based on the variety and value of products and services listed on our marketplaces, overall user experience and convenience, online communication tools, social features, integration with mobile and networking applications and tools, mobile applications and availability, quality and costs of payment and logistics services.
We compete with online and offline players to attract, engage, and retain buyers based on the variety and value of products and services listed on our marketplaces, overall user experience and convenience, online communication tools, social features, integration with mobile and networking applications and tools, mobile applications and availability, quality and costs of payment, customer support and logistics services.
For our consumer and merchant credit business, other non-bank fintechs, neobanks, credit unions, multi-finance companies, off-card financing, private credit card and point-of-sale service providers, banks and larger financial institutions may also build solutions to compete in the consumer and merchant lending space.
For our consumer and SME credit business, we compete with other non-bank fintechs, neobanks, credit unions, multi-finance companies, off-card financing, private credit card and point-of-sale service providers, banks and larger financial institutions may also build solutions to compete in the consumer and SME lending space.
We may not be able to control the actions of these or other third parties and thus are subject to various risks associated with working with or relying on third parties in our businesses, including: • risks relating to third-party sellers on our platforms and merchant partners, including deficiencies in the quality of products, misrepresentation of products, listing of restricted or prohibited products, and potential intellectual property issues (see “—We may be subject to intellectual property-related risks”); • risks relating to third-party publishing or distribution channels we use to make our applications available for download, such as the iOS App Store and the Google Play Store; • risks relating to user generated content in our games (see “—We rely on third-party game developers for some of our digital entertainment content and also allow our users to contribute and interact with user generated content”), e-commerce platform, or other platforms, including livestreaming content or other content posted in real-time that may be illegal, obscene, defamatory, infringing or otherwise inappropriate or unlawful; • risks relating to third-party payment service providers we depend on to provide users with various payment options or mobile wallet top-up options, such as the iOS App Store and the Google Play Store, payment on delivery, bank transfers, direct carrier billing, credit cards, debit cards, telecommunication card top-up and payment through other third-party payment services; • risks relating to services by third-party logistics service providers (see “—We face risks related to logistics and fulfillment”); • risks relating to third party collection agents in relation to our credit products and loans receivable; • risks relating to manpower agencies and independent contractors (see “—We face manpower-related risks”); • risks relating to business process outsourcing vendors, including customer service agents; 19 Table of Contents • risks relating to users’ personal data that is received or used by third parties in connection with our services, such as when sellers or third-party logistics providers receive user information in connection with order fulfillment; • risks relating to third party banks, insurance and wealth management service providers providing services on our platforms.
We may not be able to control the actions of these or other third parties and thus are subject to various risks associated with working with or relying on third parties in our businesses, including: • risks relating to third-party sellers on our platforms and merchant partners, including deficiencies in the quality of products, misrepresentations of or about products, listing or sale of restricted or prohibited products, failure to comply with applicable laws and regulations, and potential intellectual property issues (see “—We may be subject to intellectual property-related risks”); • risks relating to third-party publishing or distribution channels we use to make our applications available for download, such as the iOS App Store and the Google Play Store; • risks relating to content generated by third parties and any user generated content in our games (see “—We rely on third-party game developers for some of our digital entertainment content and also allow our users to contribute and interact with user generated content”), e-commerce platform, or other platforms, including content posted in real-time, which may be illegal, obscene, defamatory, infringing or otherwise inappropriate or unlawful; • risks relating to third-party payment service providers we depend on to provide users with various payment options or mobile wallet top-up options, such as the iOS App Store and the Google Play Store, payment on delivery, bank transfers, direct carrier billing, credit cards, debit cards, telecommunication card and over-the-counter top-up and payment through other third-party payment services; • risks relating to services by third-party logistics service providers (see “—We face risks related to logistics and fulfillment”); • risks relating to third party developers and independent software vendors; 19 Table of Contents • risks relating to third party collection agents in relation to our credit products and loans receivable; • risks relating to manpower agencies and independent contractors (see “—We face manpower-related risks”); • risks relating to business process outsourcing vendors, including customer service agents; • risks relating to users’ personal data that is received or used by third parties in connection with our services, such as when sellers or third-party payments or logistics providers receive user information in connection with payment services or order fulfillment; • risks relating to third party banks, insurance, lending and wealth management service providers providing services on our platforms.
Our revenue is also affected, among other factors, by our promotional and marketing activities, including the timing of promotions, and our revenue may fluctuate due to changes in user base, user engagement, user behavior and preferences, and other factors.
Our revenue is affected, by our promotional and marketing activities, including the timing of promotions, and may fluctuate due to changes in user base, user engagement, user behavior and preferences and seasonality, and other factors.
We may not have the resources, technical sophistication, or ability to anticipate or prevent rapidly evolving or sophisticated types of cyberattack or other types of security breaches. In addition, our confidential or proprietary information or our users’ personal data or payment information may, in some instances, be stored or processed by certain third-party partners, which poses similar risks.
We may not have the resources, technical sophistication, or ability to anticipate or prevent rapidly evolving or sophisticated types of cyberattacks or other types of security breaches. 22 Table of Contents In addition, our confidential or proprietary information or our users’ personal data or payment information may, in some instances, be stored or processed by certain third-party partners, which poses similar risks.
Taxation—United States Federal Income Tax Considerations—Passive Foreign Investment Company Rules.” 46 Table of Contents Based on our income and assets, and the value of the ADSs, we do not believe that we were a PFIC, for U.S. federal income tax purposes, for the taxable year ended December 31, 2022, and do not anticipate becoming a PFIC for the current taxable year or for the foreseeable future.
Taxation—United States Federal Income Tax Considerations—Passive Foreign Investment Company Rules.” Based on our income and assets, and the value of the ADSs, we do not believe that we were a PFIC, for U.S. federal income tax purposes, for the taxable year ended December 31, 2023, and do not anticipate becoming a PFIC for the current taxable year or for the foreseeable future.
GAAP upon consolidation; • compliance with privacy laws and data security laws and compliance costs across different legal systems; • currency exchange rate fluctuations; • protectionist laws and business practices that could, among other things, hinder our ability to execute our business strategies and put us at a competitive disadvantage relative to domestic companies, including restrictions on foreign ownership ; • actions by governments or others to restrict access to our products and services, whether these actions are taken for political, security or other reasons, or that may cause us to discontinue our operations in a particular market; • complex local tax regimes; • differing, complex and potentially adverse customs, import/export laws, tax rules and regulations or other trade barriers or restrictions which may be applicable to transactions conducted through cross-border e-commerce business, related compliance obligations and consequences of non-compliance, and any new developments in these areas; • establishing strategic partnerships, as well as maintaining our relationships with any of our existing or future strategic partners; • potential political, economic and social instability, including the current tension between Russia and Ukraine and other future major geopolitical events, and related actions taken by other countries in response, or perceived, threatened or actual security concerns; and • higher costs associated with doing business in a larger number of markets. 14 Table of Contents Any of the foregoing could negatively affect our business, financial condition and results of operations.
GAAP upon consolidation; • compliance with privacy laws and data security laws and compliance costs across different legal systems; • currency exchange rate fluctuations; • protectionist laws and business practices that could, among other things, hinder our ability to execute our business strategies and put us at a competitive disadvantage relative to domestic companies, including restrictions on foreign ownership ; • actions by governments or others to restrict access to our products and services, whether these actions are taken for political, security or other reasons, or that may cause us to discontinue our operations in a particular market; • complex local tax regimes; • differing, complex and potentially adverse customs, import/export laws, tax rules and regulations or other trade barriers or restrictions which may be applicable to transactions conducted through cross-border e-commerce business, related compliance obligations and consequences of non-compliance, and any new developments in these areas; • establishing strategic partnerships, as well as maintaining our relationships with any of our existing or future strategic partners; • potential political, economic and social instability, including future major geopolitical events, and related actions taken by other countries in response, or perceived, threatened or actual security concerns; and • higher costs associated with doing business in a larger number of markets.
Because of these contractual arrangements, we have control over and are the primary beneficiary of such VIEs and hence consolidate their financial results under U.S. GAAP. For the year ended December 31, 2022, revenue from all our VIEs (which excludes entities for which we have majority direct equity ownership) accounted for 5.8% of our total revenue .
Because of these contractual arrangements, we have control over and are the primary beneficiary of such VIEs and hence consolidate their financial results under U.S. GAAP. For the year ended December 31, 2023, revenue from all our VIEs (which excludes entities for which we have majority direct equity ownership) accounted for less than 5% of our total revenue .
The shareholders of our VIEs are our local employees or other local citizens. None of these shareholders has a significant equity interest in our company and thus their interests may not be aligned with ours, or they may have other potential conflicts of interest with us.
GAAP. 37 Table of Contents The shareholders of our VIEs are our local employees or other local citizens. None of these shareholders has a significant equity interest in our company and thus their interests may not be aligned with ours, or they may have other potential conflicts of interest with us.
In addition, we may acquire land or land use rights to build warehouses and to support such capabilities, which may expose us to risks relating to declining real estate value and construction risks.
In addition, we may acquire land or land use rights to build warehouses and to support such capabilities, which may expose us to risks relating to declining real estate value, construction risks and additional regulatory requirements .
With the increasing use of e-commerce marketplaces and development of legislation in different markets towards e-commerce marketplaces, proposed and newly enacted laws as well as recent court decisions in certain markets may increase our liability as a marketplace platform for the actions of, content created by, and/or products sold by third party sellers that use our Shopee platform.
With the increasing use of e-commerce marketplaces and development of legislation in different markets towards e-commerce marketplaces, proposed and newly enacted laws as well as recent court decisions in certain markets may increase our liability as a marketplace platform for the actions of, content created by, and/or products sold by users of our Shopee platform.
As we continue to develop our last-mile delivery and warehousing capacity as well as expand the categories of services we offer through our e-commerce platform, we expect these developments to potentially require additional capital expenditures or increase our operating expenses.
As we continue to develop our last-mile delivery and warehousing capacity as well as expand the categories of services we offer through Shopee, we expect these developments to potentially require additional capital expenditures or increase our operating expenses.
Our current or future digital financial products and services may not be successful or generate sufficient revenue to cover the costs and expenses of their launch and development. We face risks related to our lending and consumer and merchant credit businesses.
Our current or future digital financial products and services may not be successful or generate sufficient revenue to cover the costs and expenses of their launch and development. We face risks related to our credit and banking businesses.

… 214 more changes not shown on this page.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

233 edited+68 added−56 removed308 unchanged
Biggest changeThailand Regulations on Foreign Investment Foreign investment in Thailand is regulated under the Thai Foreign Business Act, B.E. 2542 (1999), as amended, which states that a foreigner is restricted from engaging in certain businesses in Thailand as described in the Thai Foreign Business Act, such as advertising business, sale of food and beverage, and other service businesses which include e-payment services, unless an approval is granted by the Cabinet of Thailand or a foreign business license or a foreign business certificate is granted by the Ministry of Commerce of Thailand, depending on the type of business specified under the Annexes to the Thai Foreign Business Act, or there is an exemption under other specific laws. 71 Table of Contents The term “foreigner” under the Thai Foreign Business Act covers the following definitions: (i) a natural person who is not a citizen of Thailand; (ii) a juristic person not established in Thailand; (iii) a juristic person established in Thailand with half or more of the shares constituting its capital held by (i) or (ii) or half or more of the total capital of such juristic person invested by (i) or (ii); and (iv) a juristic person established in Thailand with half or more of the shares constituting its capital held by (i), (ii) or (iii), or half or more of the total capital of such juristic person invested by (i), (ii) or (iii).
Biggest changeMoreover, non-compete, non-solicitation and any other labor contract clauses which may be deemed to interfere with a person’s right to seek employment are difficult, if not impossible, to enforce. 71 Table of Contents Thailand Regulations on Foreign Investment Foreign investment in Thailand is regulated under the Thai Foreign Business Act, B.E. 2542 (1999), as amended, which states that a foreigner is restricted from engaging in certain businesses in Thailand as described in the Thai Foreign Business Act, such as advertising business, sale of food and beverage, and other service businesses which include e-payment services, unless an approval is granted by the Cabinet of Thailand or a foreign business license or a foreign business certificate is granted by the Ministry of Commerce of Thailand, depending on the type of business specified under the Annexes to the Thai Foreign Business Act, or there is an exemption under other specific laws.
Key Information—D. Risk Factors—Business and Operational Related Risks—Risks Applicable Across Multiple Businesses—We may be subject to intellectual property-related risks.” Also, we cannot be certain that the products and content on our platforms do not or will not infringe on the valid patents, copyrights or other intellectual property rights held by third parties.
Key Information—D. Risk Factors—Business and Operational Related Risks—Risks Applicable Across Multiple Businesses—We may be subject to intellectual property-related risks.” Also, we cannot be certain that our intellectual property and/or the products and content on our platforms do not or will not infringe on the valid patents, copyrights or other intellectual property rights held by third parties.
Risk Factors—Business and Operational Related Risks—Other Operational Risks—We may be subject to risks related to litigation and regulatory proceedings.” Competition Each of the e-commerce, online games, and digital financial services industries in our markets is highly fragmented. We face competition in each of our lines of business in each market where we operate.
Risk Factors—Business and Operational Related Risks—Other Operational Risks—We may be subject to risks related to litigation and regulatory proceedings.” Competition Each of the e-commerce, digital financial services and online games industries in our markets is highly fragmented. We face competition in each of our lines of business in each market where we operate.
The primary laws and regulations to which we are subject relate to foreign investment, dividend distributions, foreign exchange controls, e-commerce, game operating, mobile wallet, payment processing, data protection, intellectual property rights, anti-money laundering and terrorism financing and employment and labor.
The primary laws and regulations to which we are subject relate to foreign investment, dividend distributions, foreign exchange controls, e-commerce, mobile wallet, payment processing, game operating, data protection, intellectual property rights, anti-money laundering and terrorism financing and employment and labor.
Under the Indonesia Investment Law, foreign investors can own up to 100% of the equity in game distribution and e-commerce marketplace businesses in Indonesia. We have obtained the investment in-principle license and the business license required for foreign investment companies engaging in game distribution and e-commerce marketplace businesses in Indonesia issued by the Indonesia Investment Coordinating Board.
Under the Indonesia Investment Law, foreign investors can own up to 100% of the equity in e-commerce marketplace and game distribution businesses in Indonesia. We have obtained the investment in-principle license and the business license required for foreign investment companies engaging in e-commerce marketplace and game distribution businesses in Indonesia issued by the Indonesia Investment Coordinating Board.
Under prevailing Indonesian laws and regulations, electronic money or e-money is defined as a payment instrument (i) issued on the basis of the source of funds being denominated in Rupiah that is deposited in advance to the e-money issuer, (ii) where the source of funds denominated in Rupiah is stored electronically in a server or a chip for purposes of transferring funds, and (iii) where the value of the e-money managed by the issuer is not considered as savings under the banking regulations.
Under prevailing Indonesian laws and regulations, electronic money or e-money is defined as a payment instrument (i) issued on the basis of the source of funds being denominated in Indonesian rupiah that is deposited in advance to the e-money issuer, (ii) where the source of funds denominated in Indonesian rupiah is stored electronically in a server or a chip for purposes of transferring funds, and (iii) where the value of the e-money managed by the issuer is not considered as savings under the banking regulations.
PSPs include most institutions providing front-end services to end-consumers such as e-money issuers, acquirers, payment gateway services providers, fund transfer/remittance services providers. PIPs are generally institutions which facilitate clearing and settlements or back-end services, between PSPs or between other PIPs. PSPs and PIPs are classified based on transaction size, interconnectivity, complexity, and whether they are replaceable.
PSPs include most institutions providing front-end services to end-consumers such as e-money issuers, acquirers, payment gateway services providers, and fund transfer/remittance services providers. PIPs are generally institutions which facilitate clearing and settlements or back-end services, between PSPs or between other PIPs. PSPs and PIPs are classified based on transaction size, interconnectivity, complexity, and whether they are replaceable.
Regulations on E-commerce As there are no specific regulations in Taiwan governing e-commerce businesses, operation of e-commerce in Taiwan is regulated by a number of legislations, such as Personal Data Protection Act, the Act Governing Electronic Payment Institutions, and Consumer Protection Act. See “—Regulations on E-payment Services” and “—Regulations on Data Protection and Information Security” below.
Regulations on E-commerce As there are no specific regulations in Taiwan governing e-commerce businesses, operation of e-commerce in Taiwan is regulated by a number of legislations, such as the Personal Data Protection Act, the Act Governing Electronic Payment Institutions, and the Consumer Protection Act. See “—Regulations on E-payment Services” and “—Regulations on Data Protection and Information Security” below.
We are also subject to other risks relating to such structural arrangements.” Regulations on Foreign Exchange The legal basis for foreign exchange control in Thailand is derived from the Exchange Control Act, B.E. 2485 (1942), as amended, and the Ministerial Regulation No. 13 (B.E. 2497 (1954)).
We are also subject to other risks relating to such structural arrangements.” Regulations on Foreign Exchange The legal basis for foreign exchange control in Thailand is derived from the Exchange Control Act, B.E. 2485 (1942), as amended, and the Ministerial Regulation No. 13 B.E. 2497 (1954), as amended.
Risk Factors—Business and Operational Related Risks—Other Operational Risks—We rely on structural arrangements to establish control over certain entities and government authorities may determine that these arrangements do not comply with existing laws and regulations.
Risk Factors—Business and Operational Related Risks—Other Operational Risks—We rely on structural arrangements to establish control over certain entities and government authorities may determine that these arrangements do not comply with existing laws and regulations.
Risk Factors—Business and Operational Related Risks—Other Operational Risks—We rely on structural arrangements to establish control over certain entities and government authorities may determine that these arrangements do not comply with existing laws and regulations.
Risk Factors—Business and Operational Related Risks—Other Operational Risks—We rely on structural arrangements to establish control over certain entities and government authorities may determine that these arrangements do not comply with existing laws and regulations.
Regulations on E-commerce Pursuant to the Commercial Registration Act, B.E. 2499 (1956), (as amended the “Commercial Registration Act”), and the Notification Regarding Requiring Business Operators to Register their Businesses No. 11, issued by the Ministry of Commerce in 2010, e-commerce business operators, including companies engaging in the sale and purchase of goods or services using electronic devices via the internet and e-marketplace, are required to register its business with the Ministry of Commerce of Thailand.
Regulations on E-commerce Pursuant to the Commercial Registration Act, B.E. 2499 (1956), (as amended, the “Commercial Registration Act”), and the Notification Regarding Requiring Business Operators to Register their Businesses No. 11, issued by the Ministry of Commerce in 2010, e-commerce business operators, including companies engaging in the sale and purchase of goods or services using electronic devices via the internet and e-marketplace, are required to register their business with the Ministry of Commerce of Thailand.
E-commerce platform providers and intermediary service providers are discharged from liability for any illegal third-party content found on their platform if the relevant provider has acted expeditiously to remove or disable access to such content after being aware of its existence. However, the E-commerce Regulation does not provide any clear criteria of what constitutes an expeditious response.
E-commerce platform providers and intermediary service providers are discharged from liability for any illegal third-party content found on their platforms if the relevant provider has acted expeditiously to remove or disable access to such content after being aware of its existence. However, the E-commerce Regulation does not provide any clear criteria on what constitutes an expeditious response.
Operating Results—Description of Certain Statement of Operations Items—Revenue” for a breakdown of our total revenues by category of activity and geographic market for each of the last three financial years. Our Businesses Shopee E-commerce Platform Our Shopee e-commerce platform is a mobile-centric, social-focused marketplace with integrated payment and logistics infrastructure and comprehensive services we offer to sellers.
Operating Results—Description of Certain Statement of Operations Items—Revenue” for a breakdown of our total revenues by category of activity and geographic market for each of the last three financial years. Our Businesses Shopee E-commerce Business Our Shopee e-commerce platform is a mobile-centric, social-focused marketplace with integrated payment and logistics infrastructure and comprehensive services we offer to sellers.
The Payment Systems Regulation expressly prohibits PSPs from: (i) accepting cryptocurrency in a payment transaction processing, (ii) processing payment transactions with virtual currency as the source of funds, and/or (iii) linking virtual currency with payment transactions processing. Regulations on Online Lending Online lending in Indonesia is regulated under two categories, namely off-balance sheet and on-balance sheet.
The Payment Systems Regulation expressly prohibits PSPs from: (i) accepting cryptocurrency in a payment transaction processing, (ii) processing payment transactions with virtual currency as the source of funds, and/or (iii) linking virtual currency with payment transactions processing. Regulations on Online Lending / Financing Online lending/financing in Indonesia is regulated under two categories, namely off-balance sheet and on-balance sheet.
If the Personal Data Controllers or the Personal Data Processors fail to comply with the PDP Law, they may be subject to sanctions in the form of warnings or written reprimands, temporary suspensions of personal data processing activities, forced deletion or destruction of personal data, and administrative fines of up to 2% of annual revenue and income of the Personal Data Controller or the Personal Data Processor may be imposed.
If the Personal Data Controllers or the Personal Data Processors fail to comply with the PDP Law, they may be subject to sanctions in the form of warnings or written reprimands, temporary suspensions of personal data processing activities, forced deletion or destruction of personal data, and administrative fines of up to 2% of annual revenue and income of the Personal Data Controller or the Personal Data Processor.
The EA provides for the minimum terms and conditions of employment, while the National Wages Consultative Council Act 2011 and Minimum Wages Order provide for the minimum salary to be paid to prescribed employees. The EA also applies to employees who are foreigners so long as they fall within the definition of “employee” under the Employment Act.
The EA provides for the minimum terms and conditions of employment, while the National Wages Consultative Council Act 2011 and Minimum Wages Order 2022 provide for the minimum salary to be paid to prescribed employees. The EA also applies to employees who are foreigners so long as they fall within the definition of “employee” under the EA.
Such termination decision may only be based on legally effective court judgments or decisions or the arbitration award under the Article 59 of Decree 31/2021/ND-CP regulating the implementation of Law on Investment.
Such termination decisions may only be based on legally effective court judgments or decisions or the arbitration award under the Article 59 of Decree 31/2021/ND-CP regulating the implementation of Law on Investment.
Regulations on the Use of Rupiah On January 12, 2023, the government of Indonesia enacted Law No. 4 of 2023 on Financial Sector Development and Reinforcement, which amends Law No. 7 of 2011 on Currency (the “Indonesia Currency Law”).
Regulations on the Use of Indonesian Rupiah On January 12, 2023, the government of Indonesia enacted Law No. 4 of 2023 on Financial Sector Development and Reinforcement, which amends Law No. 7 of 2011 on Currency (the “Indonesia Currency Law”).
To the extent provisions in existing and separate regulations relating to privacy and/or personal data protection in Indonesia such as MOCIT Regulation No. 20 of 2016 on Personal Data Protection in Electronic Systems and Government Regulation No. 71 of 2019 on the Provision of Electronic System and Transactions (collectively, “General Data Protection Regulations”), do not conflict with the PDP Law, the non-conflicting provisions in these General Data Protection Regulations remain valid.
To the extent provisions in existing and separate regulations relating to privacy and/or personal data protection in Indonesia such as MCI Regulation No. 20 of 2016 on Personal Data Protection in Electronic Systems and Government Regulation No. 71 of 2019 on the Provision of Electronic System and Transactions (collectively, “General Data Protection Regulations”), do not conflict with the PDP Law, the non-conflicting provisions in these General Data Protection Regulations remain valid.
The reporting party is required to report to PPATK any suspicious financial transaction entered into with its customers having a minimum amount of IDR500 million (US$32,068), or an equivalent value in other currencies, and/or any financial transaction involving the transfer of funds from and to other countries, no later than 14 business days after the transaction is conducted.
The reporting party is required to report to PPATK any suspicious financial transaction entered into with its customers having a minimum amount of IDR500 million (US$32,386), or an equivalent value in other currencies, and/or any financial transaction involving the transfer of funds from and to other countries, no later than 14 business days after the transaction is conducted.
Copyright is conferred on a work once all the statutory requirements for eligibility and qualification are met. The ownership of copyright in Malaysia can however be recorded formally with the Director General of MyIPO through the Copyright Voluntary Notification System or evidenced by way of a statutory declaration under section 42 of the Copyright Act 1987.
Copyright is conferred on a work once all the statutory requirements for eligibility and qualification are met. The ownership of copyright in Malaysia can however be recorded formally with the Director General of MyIPO through the Copyright Voluntary Notification System or evidenced by way of a statutory declaration under section 42 of the CA 1987.
We are also subject to other risks relating to such structural arrangements.” Thailand Shareholding Structure Our operating entities in Thailand are established using a tiered structure that maximizes our equity interests in the entity while also complying with the Thai law requirement that each Thai company has the minimum number of required shareholders and, without approval from Thai authorities, direct foreign ownership of share capital of each entity operating the restricted business under the Thai Foreign Business Act is limited to less than 50%.
We are also subject to other risks relating to such structural arrangements.” 90 Table of Contents Thailand Shareholding Structure Our operating entities in Thailand are established using a tiered structure that maximizes our equity interests in the entity while also complying with the Thai law requirement that each Thai company has the minimum number of required shareholders and, without approval from Thai authorities, direct foreign ownership of share capital of each entity operating the restricted business under the Thai Foreign Business Act is limited to less than 50%.
The financial services industry is heavily regulated and we are required to obtain and maintain certain licenses in the jurisdictions in which we provide financial services.
Regulation The financial services industry is heavily regulated and we are required to obtain and maintain certain licenses in the jurisdictions in which we provide financial services.
Intellectual Property Our business is based significantly on the acquisition, creation, use, and protection of intellectual property. Free Fire, our self-developed game, is one of our key intellectual properties. Other forms of this intellectual property include the technology and know-how that we developed and use to operate our e-commerce and payment products.
Intellectual Property Our business is based significantly on the acquisition, creation, use, and protection of intellectual property. Free Fire, our self-developed game, is one of our key intellectual properties. Other forms of this intellectual property include the technology and know-how that we developed and use to operate our e-commerce, payment and other financial services products.
We compete to attract, engage, and retain buyers based on the variety and value of products and services listed on our marketplaces, overall user experience and convenience, online communication tools, social features, integration with mobile and networking applications and tools, mobile applications and availability, quality and costs of payment and logistics services.
We compete with online and offline players to attract, engage, and retain buyers based on the variety and value of products and services listed on our marketplaces, overall user experience and convenience, online communication tools, social features, integration with mobile and networking applications and tools, mobile applications and availability, quality and costs of payment and logistics services.
Regulations on Digital Lending Any personal loan operators under the Supervised Personal Loan Notification, who use digital technology and alternative data to facilitate provision of loans in regard to the assessment of the ability or willingness to repay the loan, disbursement and repayment, and disclosure of information, are subject to the Notification of the Bank of Thailand No.
Regulations on Digital Lending Any personal loan operators under the Supervised Personal Loan Notification, who use digital technology and alternative data to facilitate provision of loans in regard to the assessment of the ability or willingness to repay the loan, disbursement and repayment, and disclosure of information, are subject to the Bank of Thailand’s Notification No.
Loans provided by offshore lenders to Vietnam entities with a term of (i) more than 12 months, (ii) 12 months or below but extended to more than 12 months and (iii) 12 months or below but with the outstanding principal loan amount and interest remaining outstanding one year from the first disbursement date, unless such principal amount is settled within 30 days, must be registered with the State Bank of Vietnam and must satisfy certain conditions with respect to the term, type and purpose of the loan.
Loans provided by offshore lenders to Vietnam entities with a term of (i) more than 12 months, (ii) 12 months or below but extended to more than 12 months and (iii) 12 months or below but with the outstanding principal loan amount and interest remaining outstanding one year from the first disbursement date, unless such principal amount is settled within 30 days, must be registered with the State Bank of Vietnam and must satisfy certain conditions with respect to, among others, the term, type, amount, currency and purpose of the loan.
The Indonesia Social Security Agency Law further stipulates that an employer that violates its obligation to provide the requisite financial contributions to healthcare social security insurance and employment social security will be subject to up to eight years of imprisonment and fines of IDR1 billion (US$64,135).
The Indonesia Social Security Agency Law further stipulates that an employer that violates its obligation to provide the requisite financial contributions to healthcare social security insurance and employment social security will be subject to up to eight years of imprisonment and fines of IDR1 billion (US$64,771).
If the content is related to terrorism, child pornography, or any other content that may disturb public order, the take down request will be considered as urgent and must be concluded within four hours upon receiving notice from MOCIT.
If the content is related to terrorism, child pornography, or any other content that may disturb public order, the take down request will be considered as urgent and must be concluded within four hours upon receiving notice from MCI.
Regulations on Information Technology Regulation of Internet Content The Broadcasting Act 1994 of Singapore prohibits the provision of certain broadcasting services, including internet content, in or from Singapore without a license issued by the Infocomm Media Development Authority. The Infocomm Media Development Authority is the regulator of the information, communications and media sectors in Singapore.
Regulations on Information Technology Regulation of Internet Content The Broadcasting Act 1994 of Singapore prohibits the provision of certain broadcasting services, including internet content, in or from Singapore without a license issued by the Infocomm Media Development Authority (“IMDA”). The IMDA is the regulator of the information, communications and media sectors in Singapore.
We plan to continue to expand our game development capabilities and publishing business. Game Players We have a large and active user base for our online game business. 52 Table of Contents The table below sets forth certain of our operating metrics for the periods indicated.
We plan to continue to expand our game development capabilities and publishing business. 53 Table of Contents Game Players We have a large and active user base for our online game business. The table below sets forth certain of our operating metrics for the periods indicated.
More detailed guidelines are provided in the Private Electronic Systems Regulation, which specifically addresses the steps to be taken by user-generated-content platforms (“UGC platforms”), to be discharged from liabilities arising from prohibited content uploaded by its users.
More detailed guidelines are provided in the Private Electronic Systems Regulation, which specifically addresses the steps to be taken by user-generated-content platforms (“UGC platforms”), to be discharged from liabilities arising from prohibited content uploaded by their users.
See “—Regulations on Foreign Investment” above. 69 Table of Contents The operation of electronic games is mainly governed by Decree No. 72/2013/ND-CP, which regulates the management, provision and use of internet services and online information, and Circular No. 24/2014/TT-BTTTT, as amended and supplemented by Decree No. 27/2018/ND-CP and Decree No. 150/2018/ND-CP, which provide further guidance to Decree No.72/2013/ND-CP.
See “—Regulations on Foreign Investment” above. The operation of electronic games is mainly governed by Decree No. 72/2013/ND-CP, which regulates the management, provision and use of internet services and online information, and Circular No. 24/2014/TT-BTTTT, as amended and supplemented by Decree No. 27/2018/ND-CP and Decree No. 150/2018/ND-CP, which provide further guidance to Decree No. 72/2013/ND-CP.
We provide our game developer-partners access to a large user base in highly diverse markets across the globe, enabling our games to quickly become popular. Our services to third-party game developers include game launch and hosting, localization, marketing, distribution, monetization, integrated payment infrastructure, including access to our SeaMoney platform, and online and offline community building activities.
We provide our game developer-partners access to a large user base in highly diverse markets across the globe, enabling our games to quickly become popular. Our services to third-party game developers include game launch and hosting, localization, marketing, distribution, monetization, integrated payment infrastructure, including access to our SeaMoney mobile wallet services, and online and offline community building activities.
Risk Factors—Business and Operational Related Risks—Risks Applicable Across Multiple Businesses—We may fail to compete effectively.” E-commerce We face competition principally from regional players that operate across several markets and global players that expand into our markets by building local platforms or making their existing platforms accessible to users in our markets. We also face competition from single-market players.
Risk Factors—Business and Operational Related Risks—Risks Applicable Across Multiple Businesses—We may fail to compete effectively.” E-commerce We face competition from regional players that operate across several markets and global players that expand into our markets by building local platforms or making their existing platforms accessible to users in our markets and from single-market players and retailers.
If the total balance of funds such company collects/pays exceed NT$2 billion (US$65 million) in the average daily amount of a year, or if such company conducts either accepting deposits of funds as stored value funds, or transferring funds between e-payment accounts, then such company shall apply for a license to qualify as an electronic payment institution.
If the total balance of funds such company collects/pays exceed NT$2 billion (US$65 million) in the average daily amount of a year, or if such company conducts either accepting deposits of funds as stored value funds, or transferring funds between e-payment accounts or by using a stored value card, then such company shall apply for a license to qualify as an electronic payment institution.
The Ministry of Local Government Development of Malaysia (“KPKT”) is the regulator administering the provisions of the Moneylenders Act 1951 and have also issued guidelines in connection with the Moneylenders Act 1951 including its Guidelines on Online Moneylending applicable to licensed online moneylenders.
The Ministry of Housing and Local Government of Malaysia (“KPKT”) is the regulator administering the provisions of the Moneylenders Act 1951 and have also issued guidelines in connection with the Moneylenders Act 1951 including its Guidelines on Online Moneylending applicable to licensed online moneylenders.
Whilst a DFB will eventually be expected to comply with the minimum paid-up capital requirement set by the MAS of S$1.5 billion (US$1.1 billion) which is applicable to all existing qualifying full banks, prior to it becoming a fully functioning DFB, the minimum paid up capital requirement applicable to a restricted DFB will initially be reduced to S$15,000,000 (US$11.2 million).
Whilst a DFB will eventually be expected to comply with the minimum paid-up capital requirement set by the MAS of S$1.5 billion (US$1.1 billion) which is applicable to all existing qualifying full banks, prior to it becoming a fully functioning DFB, the minimum paid up capital requirement applicable to a restricted DFB will initially be reduced to S$15 million (US$11.4 million).
Due in large part to these tensions, Taiwan has imposed restrictions on investments by PRC investors. Investment in Taiwan by PRC investors is governed by the Measures Governing Investment Permits to the People of the Mainland Area, (the “Measures”), which was last amended on December 30, 2020, and promulgated by the Ministry of Economic Affairs of Taiwan, or the MOEA.
Due in large part to these tensions, Taiwan has imposed restrictions on investments by PRC investors. 64 Table of Contents Investment in Taiwan by PRC investors is governed by the Measures Governing Investment Permits to the People of the Mainland Area, (the “Measures”), which was last amended on December 30, 2020, and promulgated by the Ministry of Economic Affairs of Taiwan, or the MOEA.
We believe that strengths across the e-commerce and digital entertainment businesses position us very well to grow our digital financial businesses and SeaMoney has a significant competitive advantage because of the strong demand in our markets for seamless convenient forms of mobile payments with the continued development of the digital economy in the region.
We believe that strengths across the e-commerce and digital entertainment businesses position us very well to grow our digital financial businesses and SeaMoney has a significant competitive advantage with the strong demand in our markets for seamless and convenient forms of mobile payments as well as the continued development of the digital economy in our markets.
Intellectual property rights are protected primarily through the Copyright Act (last amended on June 15, 2022), the Patent Act (last amended on May 4, 2022), the Trademark Act (last amended on May 4, 2022) and the Trade Secrets Act (last amended on January 15, 2020) in Taiwan.
Intellectual property rights are protected primarily through the Copyright Act (last amended on June 15, 2022), the Patent Act (last amended on May 4, 2022), the Trademark Act (last amended on May 24, 2023) and the Trade Secrets Act (last amended on January 15, 2020) in Taiwan.
Our users enjoy the social nature of Shopee’s platform, where users can follow, rate and easily browse for discovery to enhance their retail experience. We also empower sellers with various tools and support such as livestreaming and other value-added services for them to better engage with their buyers.
Our users enjoy the social nature of Shopee’s platform, where users can follow, rate and easily browse for discovery to enhance their retail experience. We also empower sellers with various tools and support and other value-added services for them to better engage with their buyers.
Failure to submit the report may subject the reporting party to administrative sanction(s) including warning letters, public announcements on the action or an administrative penalty. Prevention and Eradication of Terrorism Financing Law No. 9 of 2013 on the Prevention and Eradication of Terrorism Financing was enacted in order to prevent the funding of terrorists.
Failure to submit the report may subject the reporting party to administrative sanction(s) including warning letters, public announcements on the action or an administrative penalty. 63 Table of Contents Prevention and Eradication of Terrorism Financing Law No. 9 of 2013 on the Prevention and Eradication of Terrorism Financing was enacted in order to prevent the funding of terrorists.
An e-money provider may offer features such as user registration, deposit top-up and transaction and bills payment, while funds transfer, cash withdrawal and any additional features (upon approval from Bank Indonesia) are only available for open loop and licensed e-money providers.
An e-money provider may offer features such as user registration, deposit top-up, payment transaction for purchases and bills payment, while funds transfer and cash withdrawal and any additional features (upon approval from Bank Indonesia) are only available for open loop e-money for registered users and licensed e-money providers.
A company looking to distribute dividends is required to set aside at least 5% of its retained earnings into a legal reserve fund at the time the dividend is paid until and unless the legal reserve fund reaches 10% of the company’s registered capital. The dividend distributed to a company’s shareholders is subject to a 10% withholding tax.
A company looking to distribute dividends is required to set aside at least 5% of its retained earnings into a legal reserve fund at the time the dividend is paid until and unless the legal reserve fund reaches 10% of the company’s registered capital. 72 Table of Contents The dividend distributed to a company’s shareholders is subject to a 10% withholding tax.
We may be subject to legal proceedings and claims from time to time relating to the intellectual property of others, as discussed in “Item 3. Key Information—D.
We may be subject to legal proceedings and claims from time to time relating to our intellectual property and/or the intellectual property of others, as discussed in “Item 3. Key Information—D.
First, UGC platform operators must maintain a governance policy governing the rights and obligations of the users and the operator as well as the division of liability arising from the user’s content.
First, UGC platform operators must maintain a governance policy governing the rights and obligations of the users and the operator as well as the division of liability arising from the users’ content.
Finally, any gains derived from the sale of treasury shares cannot be payable as dividends to the shareholders of the company. 76 Table of Contents In addition to complying with the Companies Act, the payment of dividends must also be in accordance with the company’s constitution and the generally acceptable accounting principles in Singapore.
Finally, any gains derived from the sale of treasury shares cannot be payable as dividends to the shareholders of the company. In addition to complying with the Companies Act, the payment of dividends must also be in accordance with the company’s constitution and the generally acceptable accounting principles in Singapore.
Unless otherwise agreed with MAS, a restricted DFB will also be subject to various restrictions on its business, including but not limited to (i) deposit caps of S$75,000 (US$55,953) per individual depositor and S$50,000,000 (US$37.3 million) in aggregate deposits, (ii) restrictions on who the DFB may take deposits from, (iii) restrictions on unsecured lending, (iv) restrictions on the safeguarding of “relevant money” as defined under the Payment Services Act 2019, and (v) restrictions on the types of investment products the DFB may offer, as well as (vi) restrictions on proprietary trading.
Unless otherwise agreed with MAS, a restricted DFB will also be subject to various restrictions on its business, including but not limited to (i) deposit caps of S$75,000 (US$56,848) per individual depositor and S$50 million (US$37.9 million) in aggregate deposits, (ii) restrictions on who the DFB may take deposits from, (iii) restrictions on unsecured lending, (iv) restrictions on the safeguarding of “relevant money” as defined under the Payment Services Act 2019, and (v) restrictions on the types of investment products the DFB may offer, as well as (vi) restrictions on proprietary trading.
In case of being deemed non-compliant with the above-mentioned laws and regulations, the Taiwan authorities may take a range of actions, including: • imposing fines between NT$120,000 (US$3,905) to NT$25,000,000 (US$813,537) and further fines if the non-compliance is not rectified as ordered; • ordering the violator to reduce any direct or indirect ownership or control by PRC investors; • requesting the violator to divest some or all of its investment or control in its invested entities in Taiwan; • suspending the rights of shareholders; and • discontinuing the operations and revoking the business licenses of its invested entities in Taiwan.
In case of being deemed non-compliant with the above-mentioned laws and regulations, the Taiwan authorities may take a range of actions, including: • imposing fines between NT$120,000 (US$3,919) to NT$25,000,000 (US$816,460) and further fines if the non-compliance is not rectified as ordered; • ordering the violator to reduce any direct or indirect ownership or control by PRC investors; • requesting the violator to divest some or all of its investment or control in its invested entities in Taiwan; • suspending the rights of shareholders; and • discontinuing the operations and revoking the business licenses of its invested entities in Taiwan.
Under this shareholding structure, our Thai operating entities are each owned by (i) a Thai entity, or Thai Holdco 1, holding slightly more than half of the shares, (ii) one of our employees holding one share, and (iii) one of our Cayman Islands or Singapore subsidiaries holding slightly less than half of the shares.
Under this shareholding structure, our Thai operating entities are each owned by (i) a Thai entity, or Thai Holdco 1, holding slightly more than half of the shares and (ii) one of our Cayman Islands or Singapore subsidiaries holding slightly less than half of the shares.
On June 12, 2018, the Vietnam National Assembly issued the Law on Cybersecurity which regulates that any foreign service provider in the fields of e-payment, e-commerce, online games, and certain other industries, is required to have a commercial presence in Vietnam (such as branch, representative office) and to localize the user’s data in Vietnam.
Regulations on Data Protection and Information Security On June 12, 2018, the Vietnam National Assembly issued the Law on Cybersecurity which regulates that any foreign service provider in the fields of e-payment, e-commerce, online games, and certain other industries, is required to have a commercial presence in Vietnam (such as branch, representative office) and to localize the user’s data in Vietnam.
As an internet content provider, we are obliged to use our best efforts to ensure that prohibited material (which refers to material that is objectionable on the grounds of public interest, public morality, public security, national harmony, offends good taste or decency, or is otherwise prohibited by applicable Singapore laws) is not broadcast via the internet to users in Singapore, and we are also required to deny access to any prohibited material if directed to do so by the Infocomm Media Development Authority.
As an internet content provider, we are obliged to use our best efforts to ensure that prohibited material (which refers to material that is objectionable on the grounds of public interest, public morality, public security, national harmony, offends good taste or decency, or is otherwise prohibited by applicable Singapore laws) is not broadcast via the internet to users in Singapore, and we are also required to deny access to any prohibited material if directed to do so by the IMDA.
Meanwhile, we continue to focus on expanding categories to include an increasingly diverse range of products. Seller Support and Service by Shopee We offer strong support to sellers on the Shopee platform through large on-the-ground teams with deep local knowledge. Our local teams also offer fast and localized operational and technological assistance in using business management tools.
Meanwhile, we continue to expand categories to include an increasingly diverse range of products. Seller Support and Service by Shopee We offer strong support to sellers on the Shopee platform through large on-the-ground teams with deep knowledge of our local markets. Our local teams also offer fast and localized operational and technological assistance in using business management tools.
Governance of Electronic Information and/or Documents General obligation of the government to prevent the dissemination of prohibited content is explicitly provided under Law No. 11 of 2008 on Electronic Information and Transaction, as amended by Law No. 19 of 2016 (the “Electronic Information and Transaction Law”).
Governance of Electronic Information and/or Documents General obligation of the government to prevent the dissemination of prohibited content is explicitly provided under Law No. 11 of 2008 on Electronic Information and Transaction, as amended by Law No. 19 of 2016 and recently by Law No. 1 of 2024 (the “Electronic Information and Transaction Law”).
On November 24, 2020, the Indonesian government enacted MOCIT Regulation No. 5 of 2020 on Private Electronic Systems, as amended by MOCIT Regulation No. 10 of 2021 (the “Private Electronic Systems Regulation”).
On November 24, 2020, the Indonesian government enacted MCI Regulation No. 5 of 2020 on Private Electronic Systems, as amended by MCI Regulation No. 10 of 2021 (the “Private Electronic Systems Regulation”).
A closed loop e-money provider which issues floating funds less than IDR1 billion (US$64,135) is exempted from the licensing requirement.
A closed loop e-money provider which issues floating funds less than IDR1 billion (US$64,771) is exempted from the licensing requirement.
If we fail to abide by requisite minimum wage regulations in the Indonesia Manpower Law, our directors may be liable to a term of imprisonment of no less than one year and up to four years. Moreover, we may also be subject to a fine of no less than IDR100 million (US$6,414) and up to IDR400 million (US$25,654).
If we fail to abide by requisite minimum wage regulations in the Indonesia Manpower Law, our directors may be liable to a term of imprisonment of no less than one year and up to four years. Moreover, we may also be subject to a fine of no less than IDR100 million (US$6,477) and up to IDR400 million (US$25,908).
Pursuant to the Copyright Act 1987, authors of protected works enjoy various exclusive rights, including the rights of reproduction in any material form of the works, communication to the public, performance, showing or playing to the public of the works, and distribution of copies to the public by sale or other transfer of ownership.
Pursuant to the CA 1987, authors of protected works enjoy various exclusive rights, including the rights of reproduction in any material form of the works, communication to the public, performance, showing or playing to the public of the works, and distribution of copies to the public by sale or other transfer of ownership.
We organize esports competitions that range in size from relatively small-scale local tournaments to widely publicized and promoted global esports events that rival the size of popular professional athletic events. Some of our users have become full-time professional esports athletes that compete for prize money in tournaments and sponsorships from large corporations that often also sponsor professional sports.
We organize esports competitions that range in size from relatively small-scale local tournaments to widely publicized and promoted global esports events. Some of our users have become full-time professional esports athletes that compete for prize money in tournaments and sponsorships from large corporations that often also sponsor professional sports.
A failure to comply with any of the above can subject an organization to a fine per breach of up to S$1 million (US$746,046) or 10% of the organization’s annual turnover in Singapore, whichever is higher. An online game operator or e-commerce company is required to comply with the Personal Data Protection Act.
A failure to comply with any of the above can subject an organization to a fine per breach of up to S$1 million (US$757,978) or 10% of the organization’s annual turnover in Singapore, whichever is higher. An online game operator or e-commerce company is required to comply with the Personal Data Protection Act.
Bulk purchasing and direct product sales for specific product categories also enable us to offer a better product assortment to our buyers. Our Buyers and Sellers Our buyers are individuals and households who mainly purchase from sellers that are within the same market.
Bulk purchasing and direct product sales for specific product categories also enable us to offer a more diversified product assortment to our buyers. Our Buyers and Sellers Our buyers are individuals and households who mainly purchase from sellers that are within the same market.
Regulations on Dividend Distributions The governing legislation for the distribution of dividends in Malaysia is the Companies Act 2016. Under Section 131 of the Companies Act 2016, a Malaysian company may only distribute dividends out of profits available if the company is solvent.
Regulations on Dividend Distributions The governing legislation for the distribution of dividends in Malaysia is the Companies Act 2016 (“CA 2016”). Under Section 131 of the CA 2016, a Malaysian company may only distribute dividends out of profits available if the company is solvent.
Regulations on Anti-money Laundering and the Prevention of Terrorism Financing According to the Money Laundering Control Act of Taiwan, last amended on November 7, 2018, money laundering includes the following behaviors: (i) knowingly disguises or conceals property or property interests obtained from a serious crime or transfers or changes the specific gain from criminal actions to assist others to escape from criminal indictment; (ii) covers or hides the nature, source, flowing, location, ownership, disposition and other interest of gains of a particular crime; and (iii) receives, possesses or uses the gain of a particular crime.
Regulations on Anti-money Laundering and the Prevention of Terrorism Financing According to the Money Laundering Control Act of Taiwan, last amended on June 14, 2023, money laundering includes the following behaviors: (i) knowingly disguises or conceals property or property interests obtained from a serious crime or transfers or changes the specific gain from criminal actions to assist others to escape from criminal indictment; (ii) covers or hides the nature, source, flowing, location, ownership, disposition and other interest of gains of a particular crime; and (iii) receives, possesses or uses the gain of a particular crime.
We are also subject to other risks relating to such structural arrangements.” 86 Table of Contents The following is a summary of the currently effective contractual arrangements by and among us, our VIEs and their respective shareholders.
We are also subject to other risks relating to such structural arrangements.” The following is a summary of the currently effective contractual arrangements by and among us, our VIEs and their respective shareholders.
Under this law, any party who conceals or disguises the origin, source, location, allocation, assignment, or actual ownership or assets known or reasonably suspected to be proceeds of crimes may subject to monetary sanction of up to IDR5 billion (US$320,677) or imprisonment of up to 20 years.
Under this law, any party who conceals or disguises the origin, source, location, allocation, assignment, or actual ownership or assets known or reasonably suspected to be proceeds of crimes may subject to monetary sanction of up to IDR5 billion (US$323,855) or imprisonment of up to 20 years.
Moreover, such companies may also be dismantled or expropriated by the government. Financial service providers must comply with know-your-customer principles and report suspicious financial transactions that it believes is related to terrorism to the PPATK. Failure to do so will result in fines of up to IDR1 billion (US$64,135).
Moreover, such companies may also be dismantled or expropriated by the government. Financial service providers must comply with know-your-customer principles and report suspicious financial transactions that it believes is related to terrorism to the PPATK. Intentionally failing to do so will result in fines of up to IDR1 billion (US$64,771).
Under the Companies Act 2016, the company is regarded as solvent if it is able to pay its debts as and when they become due within 12 months immediately after the distribution is made.
Under the CA 2016, the company is regarded as solvent if it is able to pay its debts as and when they become due within 12 months immediately after the distribution is made.
Our subsidiary engaging in the digital financial services business in Thailand has obtained a supervised personal loan business license from the Ministry of Finance in accordance with the Supervised Personal Loan Notification. According to the Notification of the Bank of Thailand No.
Our subsidiary engaging in the digital financial services business in Thailand has obtained a supervised personal loan business license from the Ministry of Finance in accordance with the Supervised Personal Loan Notification. The Bank of Thailand’s Notification No.
Prohibited content includes those that violate the prevailing law, disturb members of the public and public order, and provide access to or information to access prohibited content. The platform operator must take down any prohibited content identified in a written notice from the Ministry of Communication, Information and Technology (“MOCIT”) no later than 24 hours upon receiving such notice.
Prohibited content includes those that violate the prevailing law, disturb members of the public and public order, and provide access to or information to access prohibited content. The digital platform operator must take down any prohibited content identified in a written notice from the Ministry of Communication and Informatics (“MCI”) no later than 24 hours upon receiving such notice.
Entities conducting any activity listed in the First Schedule to the AMLA, including amongst others issuer of e-money, are designated as reporting institutions which have specific obligations set out in Part IV of the AMLA to, among others, conduct customer due diligence, maintain records thereof, appoint a compliance officer, conduct audit on its compliance with the AMLA and guidelines issued by BNM and submit suspicious transaction reports to BNM.
BNM is the competent authority under the AMLA. 86 Table of Contents Entities conducting any activity listed in the First Schedule to the AMLA, including amongst others issuer of e-money, are designated as reporting institutions which have specific obligations set out in Part IV of the AMLA to, among others, conduct customer due diligence, maintain records thereof, appoint a compliance officer, conduct audit on its compliance with the AMLA and guidelines issued by BNM and submit suspicious transaction reports to BNM.
For the year ended December 31, 2022, revenue from all our VIEs (which excludes entities for which we have majority direct equity ownership) accounted for 5.8% of our total revenue. None of our VIEs is individually a significant subsidiary as defined in Rule 1-02(w) of Regulation S-X.
For the year ended December 31, 2023, revenue from all our VIEs (which excludes entities for which we have majority direct equity ownership) accounted for less than 5% of our total revenue. None of our VIEs is individually a significant subsidiary as defined in Rule 1-02(w) of Regulation S-X.
Under the Private Electronic Systems Regulation, all digital platforms that fall within the private electronic system provider category, including platforms that offer goods and/or services such as financial transaction services and paid content to users’ devices, are required to ensure that its platform does not contain or facilitate the dissemination of prohibited content.
Under the Private Electronic Systems Regulation, all digital platforms that fall within the private electronic system provider category, including platforms that offer goods and/or services such as financial transaction services and paid content to users’ devices, are required to ensure that their platforms do not contain or facilitate the dissemination of prohibited content.
In particular, it administers the video game classification system under the Films Act 1981, which requires businesses importing or distributing physical copies of video games in Singapore to submit the video games to the Infocomm Media Development Authority for rating and classification. However, the video game classification system does not apply to games which are only available via internet download.
In particular, it administers the video game classification system under the Films Act 1981, which requires businesses importing or distributing physical copies of video games in Singapore to submit the video games to the IMDA for rating and classification. However, the video game classification system does not apply to games which are only available via internet download.
Personal loan business operators and e-payment business operators are required to apply the know-your-client measures when the value of transaction(s) is (i) THB500,000 (US$14,455) or more for any single bill payment; (ii) THB50,000 (US$1,446) or more for any e-money or electronic money transfer; or (iii) THB100,000 (US$2,891) or more for other single or cumulative transactions.
Personal loan business operators and e-payment business operators are required to apply the know-your-client measures when the value of transaction(s) is (i) THB500,000 (US$14,556) or more for any single bill payment; (ii) THB50,000 (US$1,456) or more for any e-money or electronic money transfer; or (iii) THB100,000 (US$2,911) or more for other single or cumulative transactions.
We offer multiple methods for users to purchase in-game items, including through our SeaMoney platform, the Google Play Store and the iOS App Store payment gateways, other online payment gateways, bank transfers, credit cards, debit cards, mobile phone billing, and prepaid cards, including our own prepaid cards, which are sold through agents. 53 Table of Contents Esports and Community Building Garena organizes esports events annually and operates one of the largest mobile-game professional leagues in Southeast Asia, Taiwan and Brazil.
We offer multiple methods for users to purchase in-game items, including through the Google Play Store and the iOS App Store payment gateways, our SeaMoney mobile wallet services, other online payment gateways, bank transfers, credit cards, debit cards, mobile phone billing, and prepaid cards, including our own prepaid cards, which are sold through agents. 54 Table of Contents Esports and Community Building Garena organizes esports events annually and operates one of the largest mobile-game professional leagues in Southeast Asia, Taiwan and Latin America.
Since the online games that we offer are available only through online platforms, we in general are not subject to the video game classification system. However, the Infocomm Media Development Authority retains the right to issue a rating and/or classification of any of the online games we offer, should it choose to do so.
Since the online games that we offer are available only through online platforms, we in general are not subject to the video game classification system. However, the IMDA retains the right to issue a rating and/or classification of any of the online games we offer, should it choose to do so.
We leverage our deep understanding of local market conditions and user preferences to prioritize product categories that we believe have higher realization rates and profitability for our sellers. We currently offer a general merchandise platform focused on long-tail high-margin categories, such as fashion, health and beauty, and home and living.
We leverage our deep understanding of local market conditions and user preferences to prioritize product categories that we believe have higher realization rates and profitability for our sellers. We currently offer a comprehensive general merchandise platform with strength in long-tail high-margin categories, such as fashion, health and beauty, and home and living.
Many of our markets are experiencing a generational transition to the new digital economy, with digital inclusion bringing consumers ever more closely to each other and online services, by leading internet business models such as our own.
Each business is localized to meet the unique characteristics of our markets. Many of our markets are experiencing a generational transition to the new digital economy, with digital inclusion bringing consumers ever more closely to each other and online services, by leading internet business models such as our own.

… 277 more changes not shown on this page.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

121 edited+52 added−40 removed60 unchanged
Biggest changeThe operating results in any period are not necessarily indicative of the results that may be expected for any future period. 95 Table of Contents For the Year Ended December 31, 2020 2021 2022 US$ Percentage of Total Revenue US$ Percentage of Total Revenue US$ Percentage of Total Revenue (thousands, except for percentages) Selected Consolidated Statements of Operations Data: Revenue: Service revenue Digital Entertainment 2,015,972 46.1 4,320,013 43.4 3,877,163 31.1 E-commerce and other services 1,777,330 40.6 4,564,617 45.8 7,463,173 60.0 Sales of goods 582,362 13.3 1,070,560 10.8 1,109,369 8.9 Total revenue 4,375,664 100.0 9,955,190 100.0 12,449,705 100.0 Cost of revenue: Cost of service Digital Entertainment (702,329 ) (16.1 ) (1,230,082 ) (12.4 ) (1,077,017 ) (8.7 ) E-commerce and other services (1,743,773 ) (39.9 ) (3,825,826 ) (38.4 ) (5,194,065 ) (41.7 ) Cost of goods sold (580,657 ) (13.3 ) (1,003,547 ) (10.1 ) (993,346 ) (8.0 ) Total cost of revenue (3,026,759 ) (69.2 ) (6,059,455 ) (60.9 ) (7,264,428 ) (58.4 ) Gross profit 1,348,905 30.8 3,895,735 39.1 5,185,277 41.6 Operating income (expenses): Other operating income 189,645 4.3 287,946 2.9 279,184 2.2 Sales and marketing expenses (1,830,875 ) (41.8 ) (3,829,743 ) (38.5 ) (3,269,223 ) (26.3 ) General and administrative expenses (599,706 ) (13.7 ) (987,868 ) (9.9 ) (1,437,612 ) (11.5 ) Provision for credit losses (57,509 ) (1.3 ) (117,427 ) (1.2 ) (513,690 ) (4.1 ) Research and development expenses (353,785 ) (8.1 ) (831,703 ) (8.4 ) (1,376,501 ) (11.0 ) Impairment of goodwill – – – – (354,943 ) (2.9 ) Total operating expenses (2,652,230 ) (60.6 ) (5,478,795 ) (55.1 ) (6,672,785 ) (53.6 ) Operating loss (1,303,325 ) (29.8 ) (1,583,060 ) (15.9 ) (1,487,508 ) (11.9 ) Interest income 24,804 0.6 36,082 0.4 115,515 0.9 Interest expense (123,843 ) (2.8 ) (136,876 ) (1.4 ) (45,396 ) (0.4 ) Net investment loss (17,820 ) (0.4 ) (43,502 ) (0.4 ) (207,331 ) (1.7 ) Net (loss) gain on debt extinguishment (24,400 ) (0.6 ) (2,069 ) (0.0 ) 199,697 1.6 Changes in fair value of convertible notes (87 ) (0.0 ) – – – – Foreign exchange (loss) gain (38,567 ) (0.9 ) 14,241 0.1 (75,510 ) (0.6 ) Loss before income tax and share of results of equity investees (1,483,238 ) (33.9 ) (1,715,184 ) (17.2 ) (1,500,533 ) (12.1 ) Income tax expense (141,640 ) (3.2 ) (332,865 ) (3.3 ) (168,395 ) (1.4 ) Share of results of equity investees 721 0.0 5,019 0.1 11,156 0.1 Net loss (1,624,157 ) (37.1 ) (2,043,030 ) (20.5 ) (1,657,772 ) (13.3 ) 96 Table of Contents Year Ended December 31, 2022 Compared to Year Ended December 31, 2021 Revenue Our total revenue increased by 25.1% from US$10.0 billion in 2021 to US$12.4 billion in 2022. • Digital Entertainment: Our digital entertainment revenue decreased by 10.3% from US$4.3 billion in 2021 to US$3.9 billion in 2022.
Biggest changeThe operating results in any period are not necessarily indicative of the results that may be expected for any future period. 97 Table of Contents For the Year Ended December 31, 2021 2022 2023 US$ Percentage of Total Revenue US$ Percentage of Total Revenue US$ Percentage of Total Revenue (thousands, except for percentages) Selected Consolidated Statements of Operations Data: Revenue: Service revenue Digital Entertainment 4,320,013 43.4 3,877,163 31.1 2,172,009 16.6 E-commerce and other services 4,564,617 45.8 7,463,173 60.0 9,770,376 74.8 Sales of goods 1,070,560 10.8 1,109,369 8.9 1,121,175 8.6 Total revenue 9,955,190 100.0 12,449,705 100.0 13,063,560 100.0 Cost of revenue: Cost of service Digital Entertainment (1,230,082 ) (12.4 ) (1,077,017 ) (8.7 ) (672,481 ) (5.1 ) E-commerce and other services (3,825,826 ) (38.4 ) (5,194,065 ) (41.7 ) (5,530,043 ) (42.3 ) Cost of goods sold (1,003,547 ) (10.1 ) (993,346 ) (8.0 ) (1,027,389 ) (7.9 ) Total cost of revenue (6,059,455 ) (60.9 ) (7,264,428 ) (58.4 ) (7,229,913 ) (55.3 ) Gross profit 3,895,735 39.1 5,185,277 41.6 5,833,647 44.7 Operating income (expenses): Other operating income 287,946 2.9 279,184 2.2 221,021 1.7 Sales and marketing expenses (3,829,743 ) (38.5 ) (3,269,223 ) (26.3 ) (2,779,223 ) (21.3 ) General and administrative expenses (987,868 ) (9.9 ) (1,437,612 ) (11.5 ) (1,134,724 ) (8.7 ) Provision for credit losses (117,427 ) (1.2 ) (513,690 ) (4.1 ) (633,942 ) (4.8 ) Research and development expenses (831,703 ) (8.4 ) (1,376,501 ) (11.0 ) (1,164,126 ) (8.9 ) Impairment of goodwill – – (354,943 ) (2.9 ) (117,875 ) (0.9 ) Total operating expenses (5,478,795 ) (55.1 ) (6,672,785 ) (53.6 ) (5,608,869 ) (42.9 ) Operating (loss) income (1,583,060 ) (15.9 ) (1,487,508 ) (11.9 ) 224,778 1.7 Interest income 36,082 0.4 115,515 0.9 331,310 2.6 Interest expense (136,876 ) (1.4 ) (45,396 ) (0.4 ) (41,075 ) (0.3 ) Net investment loss (43,502 ) (0.4 ) (207,331 ) (1.7 ) (125,656 ) (1.0 ) Net (loss) gain on debt extinguishment (2,069 ) (0.0 ) 199,697 1.6 38,550 0.3 Foreign exchange gain (loss) 14,241 0.1 (75,510 ) (0.6 ) 4,487 0.0 (Loss) Income before income tax and share of results of equity investees (1,715,184 ) (17.2 ) (1,500,533 ) (12.1 ) 432,394 3.3 Income tax expense (332,865 ) (3.3 ) (168,395 ) (1.4 ) (262,680 ) (2.0 ) Share of results of equity investees 5,019 0.1 11,156 0.1 (7,032 ) (0.1 ) Net (loss) income (2,043,030 ) (20.5 ) (1,657,772 ) (13.3 ) 162,682 1.2 98 Table of Contents For the Year Ended December 31, 2021 2022 2023 (US$ thousands) Gross profit/(loss): Services E-commerce 381,830 1,302,034 2,713,824 Digital Financial Services 364,473 967,858 1,479,677 Digital Entertainment 3,089,931 2,800,146 1,499,528 Other Services (7,512 ) (784 ) 46,832 Sales of goods 67,013 116,023 93,786 Total gross profit 3,895,735 5,185,277 5,833,647 For the Year Ended December 31, 2021 2022 2023 (Percentage) Gross margin: Services E-commerce 9.4 21.0 34.4 Digital Financial Services 77.6 79.2 84.1 Digital Entertainment 71.5 72.2 69.0 Other Services (32.6 ) (1.5 ) 37.2 Sales of goods 6.3 10.5 8.4 Total gross margin 39.1 41.6 44.7 Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Revenue Our total revenue increased by 4.9% from US$12.4 billion in 2022 to US$13.1 billion in 2023. • E-commerce: Our e-commerce service revenue increased by 27.4% from US$6.2 billion in 2022 to US$7.9 billion in 2023.
Operating Activities Net cash used in operating activities amounted to US$1.1 billion for the year ended December 31, 2022 compared to net cash generated from operating activities of US$208.6 million for the year ended December 31, 2021.
Net cash used in operating activities amounted to US$1.1 billion for the year ended December 31, 2022 compared to net cash generated from operating activities of US$208.6 million for the year ended December 31, 2021.
Financing Activities Net cash generated from financing activities amounted to US$400.3 million in 2022, primarily attributable to an increase in bank customer deposits of US$942.6 million, partially offset by the repurchase of convertible notes of US$611.3 million.
Net cash generated from financing activities amounted to US$400.3 million in 2022, primarily attributable to an increase in bank customer deposits of US$942.6 million, partially offset by the repurchase of convertible notes of US$611.3 million.
Upon conversion, we have the right, at our option, to pay or deliver, either cash, ADSs, or a combination of cash and ADSs to converting holders.
Upon conversion, we have the right, at our option, to pay or deliver, either cash, ADSs, or a combination of cash and ADSs to converting holders.
E. Critical Accounting Estimates We prepare our consolidated financial statements in conformity with U.S. GAAP, which requires us to make estimates and assumptions that affect our reporting of, among other things, assets and liabilities, disclosure of contingent assets and liabilities and revenue and expenses.
E. Critical Accounting Estimates We prepare our consolidated financial statements in conformity with U.S. GAAP, which requires us to make judgments, estimates and assumptions that affect our reporting of, among other things, assets and liabilities, disclosure of contingent assets and liabilities and revenue and expenses.
Impairment of Long-lived Assets in E-commerce ("EC") Segment We evaluate our long-lived assets for impairment when there are events or changes in circumstances which indicate that the carrying amounts of the long-lived assets may not be recoverable.
Impairment of Long-lived Assets in E-commerce Segment We evaluate our long-lived assets for impairment when there are events or changes in circumstances which indicate that the carrying amounts of the long-lived assets may not be recoverable.
Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the year ended December 31, 2022 that are reasonably likely to have a material adverse effect on our net revenues, income, profitability, liquidity or capital resources, or that would cause reported financial information not necessarily to be indicative of future operating results or financial conditions.
Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the year ended December 31, 2023 that are reasonably likely to have a material adverse effect on our net revenues, income, profitability, liquidity or capital resources, or that would cause reported financial information not necessarily to be indicative of future operating results or financial conditions.
Other costs include server and hosting costs, upfront licensing fees, which are fixed and amortized over the shorter of estimated useful life or game licensing period, staff compensation and welfare costs, which include the share-based compensation, and other miscellaneous costs.
Other costs include server and hosting costs, upfront licensing fees, which are fixed and amortized over the shorter of estimated useful life or game licensing period, and staff compensation and welfare costs, which include the share-based compensation.
Convertible Notes Our convertible notes obligations, including scheduled interest, were approximately US$3.4 billion as of December 31, 2022, based on the contractual maturity assuming no conversion subsequent to December 31, 2022. In June 2018, we completed an offering of 2.25% convertible senior notes in an aggregate principal amount of US$575 million, or the 2023 convertible notes.
Convertible Notes Our convertible notes obligations, including scheduled interest, were approximately US$3.2 billion as of December 31, 2023, based on the contractual maturity assuming no conversion subsequent to December 31, 2023. In June 2018, we completed an offering of 2.25% convertible senior notes in an aggregate principal amount of US$575 million, or the 2023 convertible notes.
See “—Provision for Credit Losses” below for further details. 97 Table of Contents Provision for Credit Losses Our provision for credit losses increased by 337.5% from US$117.4 million in 2021 to US$513.7 million in 2022, primarily driven by the growth in our loan book.
See “—Provision for Credit Losses” below for further details. 102 Table of Contents Provision for Credit Losses Our provision for credit losses increased by 337.5% from US$117.4 million in 2021 to US$513.7 million in 2022, primarily driven by the growth in our loan book.
Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Item 3. Key Information—D. Risk Factors” and elsewhere in this annual report. 89 Table of Contents A. Operating Results Overview Sea operates three key businesses—Shopee, Garena, and SeaMoney.
Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Item 3. Key Information—D. Risk Factors” and elsewhere in this annual report. A. Operating Results Overview Sea operates three key businesses—Shopee, SeaMoney and Garena.
Optimization of Our Cost and Expense Structure Our cost and expense structure has several broad components: sales and marketing expenses, consisting primarily of customer acquisition and retention expenses for all our business segments; costs of logistics, including expenses for warehousing, for our e-commerce business; payment channel costs, royalties, amortized license fees and hosting costs for our digital entertainment business; funding costs as well as credit and default costs, for our consumer and merchant credit business; employee compensation and welfare costs and expenses, which are spread among different functions; research and development expenses; and other costs and expenses across our businesses that are mainly fixed in nature.
Optimization of Our Cost and Expense Structure Our cost and expense structure has several broad components: sales and marketing expenses, consisting primarily of customer acquisition and retention expenses for all our business segments; costs of logistics, including expenses for warehousing, for our e-commerce business; funding costs as well as credit and default costs, for our consumer and SME credit business; payment channel costs, royalties, amortized license fees and hosting costs for our digital entertainment business; staff compensation and welfare costs and expenses, which are spread among different functions; research and development expenses; and other costs and expenses across our businesses that are mainly fixed in nature.
The cap price of the capped call transactions will initially be US$70.36 per ADS, and is subject to certain adjustments under the terms of the capped call transactions. 104 Table of Contents In May 2020, we completed an offering of 2.375% convertible senior notes in an aggregate principal amount of US$1.15 billion, or the 2025 convertible notes.
The cap price of the capped call transactions will initially be US$70.36 per ADS, and is subject to certain adjustments under the terms of the capped call transactions. In May 2020, we completed an offering of 2.375% convertible senior notes in an aggregate principal amount of US$1.15 billion, or the 2025 convertible notes.
At the same time, the large user base on Shopee may also increasingly explore other services and product offerings available on our digital financial services platform, such as our credit, insurtech and digital bank services.
At the same time, the large user base on Shopee may also increasingly explore other services and product offerings available on our digital financial services platform, such as our credit, banking and insurtech services.
Due to the freemium business model of our immersive games, the higher the number of active users on our games, the greater the likelihood of such users to make in-game purchases. Therefore, we believe Game QAU is a key metric to help us understand both the active user base and user engagement on our games. See “Item 4.
Due to the freemium business model of our immersive games, the higher the number of active users on our games, the greater the likelihood of such users to make in-game purchases. Therefore, we believe Game QAU is a key metric to help us understand both the active user base and user engagement on our games.
The aggregate of our purchase commitments payable within the next 12 months is US$233.8 million. For further information, refer to Note 23 – Commitments and Contingencies in the accompanying notes to consolidated financial statements included in “Item 17. Financial Statements.” We have commitments to pay a minimum guarantee of royalty fees to game developers for certain online games we licensed.
The aggregate of our purchase commitments payable within the next 12 months is US$130.4 million. For further information, refer to Note 23 – Commitments and Contingencies in the accompanying notes to consolidated financial statements included in “Item 17. Financial Statements.” We have commitments to pay a minimum guarantee of royalty fees to game developers for certain online games we licensed.
Others Subsidiaries incorporated in other jurisdictions are subject to the respective applicable corporate income tax rates of the jurisdictions where they are resident. 101 Table of Contents Domestic statutory corporate income tax rate in Indonesia was reduced from 25% to 22% with effect from the financial year 2020.
Others Subsidiaries incorporated in other jurisdictions are subject to the respective applicable corporate income tax rates of the jurisdictions where they are resident. Domestic statutory corporate income tax rate in Indonesia was reduced from 25% to 22% with effect from the financial year 2020.
This encourages current users to invite new users to our platform, which allows us to grow our user base with moderate acquisition cost and increases the likelihood that users will remain active and engaged and therefore spend on our platform. Each of our three businesses is a multi-sided platform which benefits from virtuous cycle dynamics.
This encourages current users to invite new users to our platforms, which allows us to grow our user base with moderate acquisition cost and increases the likelihood that users will remain active and engaged and therefore spend on our platforms. 92 Table of Contents Each of our three businesses is a multi-sided platform which benefits from virtuous cycle dynamics.
As of March 15, 2023, holders of an aggregate of US$0.5 million principal amount of our 2025 convertible notes have elected to convert, and approximately US$1.1 billion principal amount of our 2025 convertible notes remained outstanding. In connection with the pricing of the 2025 convertible notes, we have entered into capped call transactions with certain financial institutions.
As of March 31, 2024, holders of an aggregate of US$0.5 million principal amount of our 2025 convertible notes have elected to convert, and approximately US$1.1 billion principal amount of our 2025 convertible notes remained outstanding. In connection with the pricing of the 2025 convertible notes, we have entered into capped call transactions with certain financial institutions.
For example, as our Shopee buyers and Garena game players increasingly complete transactions using our mobile wallet services, our mobile wallet user base grows, which in turn may attract more merchants to join the mobile wallet network.
Further, as our Shopee buyers and Garena game players increasingly complete transactions using our mobile wallet services, our mobile wallet user base grows, which in turn may attract more merchants to join the mobile wallet network.
These 2023 convertible notes were offered to qualified institutional buyers pursuant to Rule 144A under the Securities Act, and certain non-U.S. persons in compliance with Regulation S under the Securities Act. The notes will mature in July 2023.
These 2023 convertible notes were offered to qualified institutional buyers pursuant to Rule 144A under the Securities Act, and certain non-U.S. persons in compliance with Regulation S under the Securities Act.
Due to the continued losses incurred by the EC segment, we evaluate the related long-lived assets for impairment at the asset group level by comparing the carrying amount of the asset group to the recoverable value determined by forecasted undiscounted cash flows expected to be generated by this asset group.
Due to the losses incurred by the E-commerce segment, we evaluate the related long-lived assets for impairment at the asset group level by comparing the carrying amount of the asset group to the recoverable value determined by forecasted undiscounted cash flows expected to be generated by this asset group.
As of March 15, 2023, holders of an aggregate of US$998.0 million principal amount of our 2024 convertible notes have elected to convert, and approximately US$152.0 million principal amount of our 2024 convertible notes remained outstanding. In connection with the pricing of the 2024 convertible notes, we have entered into capped call transactions with certain financial institutions.
As of March 31, 2024, holders of an aggregate of US$998.0 million principal amount of our 2024 convertible notes have elected to convert, and approximately US$152.0 million principal amount of our 2024 convertible notes remained outstanding. 107 Table of Contents In connection with the pricing of the 2024 convertible notes, we have entered into capped call transactions with certain financial institutions.
Risk Factors—Business and Operational Related Risks—Risks Applicable Across Multiple Businesses—Fluctuations in foreign currency exchange rates may adversely affect our operational and financial results, which we report in U.S. dollars.” Description of Certain Statement of Operations Items Revenue We currently generate revenue primarily from our digital entertainment business and e-commerce business. The table below sets forth our revenue breakdown.
Risk Factors—Business and Operational Related Risks—Risks Applicable Across Multiple Businesses—Fluctuations in foreign currency exchange rates may adversely affect our operational and financial results, which we report in U.S. dollars.” Description of Certain Statement of Operations Items Revenue We currently generate revenue primarily from our e-commerce business, digital financial services business and digital entertainment business.
Deposits Payable As of December 31, 2022, our consolidated balance sheets had deposits payable of US$1.3 billion, which are customer deposits from our banking business. Other Contractual Cash Obligations Our operating lease obligations, including imputed interest, were US$1.3 billion as of December 31, 2022, of which US$281.7 million is payable within the next 12 months.
Deposits Payable As of December 31, 2023, our consolidated balance sheets had deposits payable of US$1.7 billion, which are customer deposits from our banking business. Other Contractual Cash Obligations Our operating lease obligations, including imputed interest, were US$1.4 billion as of December 31, 2023, of which US$298.1 million is payable within the next 12 months.
Under the current laws of the Cayman Islands, we are not subject to tax on income or capital gains. Singapore Our subsidiaries incorporated in Singapore are subject to the Singapore corporate tax of 17% in 2020, 2021 and 2022.
Under the current laws of the Cayman Islands, we are not subject to tax on income or capital gains. 104 Table of Contents Singapore Our subsidiaries incorporated in Singapore are subject to the Singapore corporate tax of 17% in 2021, 2022 and 2023.
As we control the service of providing games to the users and have a direct contractual arrangement with our paying users and have the right to determine the price to be paid by such users, the gross proceeds collected from these channels represent revenue to be recognized, and the amounts retained by these channels based on a predetermined percentage represent our cost of revenue to be recognized. 107 Table of Contents Revenue is recognized over the performance obligation period.
As we control the service of providing games to the users and have a direct contractual arrangement with our paying users and have the right to determine the price to be paid by such users, the gross proceeds collected from these channels represent revenue to be recognized, and the amounts retained by these channels based on a predetermined percentage represent our cost of revenue to be recognized.
Bulk purchasing and direct product sales for specific product categories also enable us to offer better product assortment and more competitive prices to our buyers. 93 Table of Contents Cost of Revenue Our cost of revenue primarily consists of direct expenses in generating revenue from our businesses.
Bulk purchasing and direct product sales for specific product categories also enable us to offer better product assortment and more competitive prices to our buyers. Cost of Revenue Our cost of revenue primarily consists of direct expenses in generating revenue from our businesses. The table below sets forth our cost of revenue breakdown.
Our obligations for leases that have not yet commenced, including imputed interest, were US$810.7 million as of December 31, 2022, of which US$21.2 million is payable within the next 12 months. For further information on our leases, refer to Note 9 – Leases in the accompanying notes to consolidated financial statements included in “Item 17.
Our obligations for leases that have not yet commenced, including imputed interest, were US$518.3 million as of December 31, 2023, of which US$10.8 million is payable within the next 12 months. For further information on our leases, refer to Note 9 – Leases in the accompanying notes to consolidated financial statements included in “Item 17.
Sales of Goods Our cost of revenue for sales of goods is mainly attributable to the goods we purchase from manufacturers and third parties and sell directly to buyers on our Shopee platform.
Sales of Goods Our cost of revenue for sales of goods is mainly attributable to the goods we purchase from manufacturers and third parties and sell directly to buyers on our Shopee platform. Gross Profit Our gross profit is defined as total revenue minus total cost of revenue.
For example, as the number of buyers on our Shopee platform increases, Shopee attracts an increasing number of sellers, resulting in increases in the volume and variety of products available on the platform, which increases the purchasing opportunities for each of those buyers. This results in greater monetization potential as the size of each platform grows.
For example, as the number of buyers on our Shopee platform increases, Shopee attracts an increasing number of sellers, resulting in increases in the volume and variety of products available on the platform, which increases the purchasing opportunities for each of those buyers.
Time-based virtual items are items with a stated expiration time, for which revenue is recognized ratably over the period based on the time unit of the virtual items. Consumable virtual items are items that can be consumed by a specific user action and have limitations on repeated use. Revenue attributable to consumable virtual items is recognized upon consumption.
Revenue attributable to a time-based virtual item is recognized ratably over the period based on the time unit of the item. • Consumable virtual items are items that can be consumed by a specific user action and have limitations on repeated use.
Income Taxes Deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse.
We determine deferred tax assets and liabilities based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that are in effect in the period in which the differences are expected to reverse.
Risk Factors—Markets Related Risks—The ability of our subsidiaries to distribute dividends to us may be subject to restrictions under the laws of their respective jurisdictions.” Even though we currently do not require any such dividends, loans or advances from our entities for working capital and other funding purposes, we may in the future require additional cash resources from them due to changes in business conditions, to fund future acquisitions and development, or merely to declare and pay dividends or distributions to our shareholders. 106 Table of Contents Certain of the markets in which we have significant subsidiaries or principal operating entities, including Indonesia, Thailand and Taiwan, require those subsidiaries to establish and fund statutory reserves.
Risk Factors—Markets Related Risks—The ability of our subsidiaries to distribute dividends to us may be subject to restrictions under the laws of their respective jurisdictions.” Even though we currently do not require any such dividends, loans or advances from our entities for working capital and other funding purposes, we may in the future require additional cash resources from them due to changes in business conditions, to fund future acquisitions and development, or merely to declare and pay dividends or distributions to our shareholders.
Investing Activities Net cash used in investing activities amounted to US$2.4 billion in 2022. This was primarily attributable to purchase of investments of US$2.6 billion mainly consisting of time deposits and liquid investment products, an increase in loans receivable of our credit business of US$1.2 billion and purchase of property and equipment of US$924.2 million.
Investing Activities Net cash used in investing activities amounted to US$5.8 billion in 2023. This was primarily attributable to purchase of investments of US$8.3 billion mainly consisting of time deposits and liquid investment products, an increase in loans receivable of our credit business of US$1.0 billion and purchase of property and equipment of US$241.6 million.
For further information, refer to Note 13 – Convertible Notes in the accompanying notes to consolidated financial statements included in “Item 17. Financial Statements.” 105 Table of Contents Capital Expenditures Our capital expenditures amounted to US$357.1 million, US$807.2 million and US$976.3 million in 2020, 2021 and 2022, respectively.
For further information, refer to Note 13 – Convertible Notes in the accompanying notes to consolidated financial statements included in “Item 17. Financial Statements.” Capital Expenditures Our capital expenditures amounted to US$807.2 million, US$976.3 million and US$258.3 million in 2021, 2022 and 2023, respectively.
In our e-commerce business, the larger the number of sellers and buyers on the platform, the larger the number and value of transactions which over time will drive advertising and transaction-based fee revenue for us.
In our e-commerce business, the larger the number of sellers and buyers on the platform, the larger the number and value of transactions which over time will drive advertising and transaction-based fee revenue for us. In our digital financial services business, the larger the number of users, the greater the potential to generate revenue.
While we primarily operate as a marketplace, we also purchase products from manufacturers or third parties directly and sell on our Shopee platform under our official store to meet buyers’ demand for such products.
Sales of Goods Sales of goods revenue mainly comes from our e-commerce business. While we primarily operate as a marketplace, we also purchase products from manufacturers or third parties directly and sell on our Shopee platform under our official store to meet buyers’ demand for such products.
In March 2021, the Philippines reduced its corporate income tax rate from 30% to 25%, effective retroactively from July 1, 2020. B. Liquidity and Capital Resources Cash Flows and Working Capital Our principal sources of liquidity have historically been cash generated from operating activities and proceeds from equity offerings and convertible notes offerings.
In March 2021, the Philippines reduced its corporate income tax rate from 30% to 25%, effective retroactively from July 1, 2020. B. Liquidity and Capital Resources Cash Flows and Working Capital Our principal sources of liquidity have historically been cash generated from operating activities and financing activities including customer deposits under our banking business.
For the Year Ended December 31, 2020 2021 2022 US$ Percentage of Total Revenue US$ Percentage of Total Revenue US$ Percentage of Total Revenue (thousands, except for percentages) Other operating income (189,645 ) (4.3 ) (287,946 ) (2.9 ) (279,184 ) (2.2 ) Sales and marketing expenses 1,830,875 41.8 3,829,743 38.5 3,269,223 26.3 General and administrative expenses 599,706 13.7 987,868 9.9 1,437,612 11.5 Provision for credit losses 57,509 1.3 117,427 1.2 513,690 4.1 Research and development expenses 353,785 8.1 831,703 8.4 1,376,501 11.0 Impairment of goodwill – – – – 354,943 2.9 Total operating expenses 2,652,230 60.6 5,478,795 55.1 6,672,785 53.6 94 Table of Contents Other Operating Income Our other operating income consists primarily of rebates from e-commerce related logistic services provided by third parties.
For the Year Ended December 31, 2021 2022 2023 US$ Percentage of Total Revenue US$ Percentage of Total Revenue US$ Percentage of Total Revenue (thousands, except for percentages) Other operating income (287,946 ) (2.9 ) (279,184 ) (2.2 ) (221,021 ) (1.7 ) Sales and marketing expenses 3,829,743 38.5 3,269,223 26.3 2,779,223 21.3 General and administrative expenses 987,868 9.9 1,437,612 11.5 1,134,724 8.7 Provision for credit losses 117,427 1.2 513,690 4.1 633,942 4.8 Research and development expenses 831,703 8.4 1,376,501 11.0 1,164,126 8.9 Impairment of goodwill – – 354,943 2.9 117,875 0.9 Total operating expenses 5,478,795 55.1 6,672,785 53.6 5,608,869 42.9 96 Table of Contents Other Operating Income Our other operating income consists primarily of rebates from e-commerce related logistic services provided by third parties.
These were partially offset by proceeds from maturity and disposal of investments of US$2.3 billion. Net cash used in investing activities amounted to US$3.8 billion in 2021.
These were partially offset by proceeds from maturity and disposal of investments of US$3.5 billion. 106 Table of Contents Net cash used in investing activities amounted to US$2.4 billion in 2022.
The following table sets forth a summary of our cash flows for the periods indicated: For the Year Ended December 31, 2020 2021 2022 (US$ thousands) Net cash generated from (used in) operating activities 555,868 208,649 (1,055,692 ) Net cash used in investing activities (886,912 ) (3,767,273 ) (2,428,809 ) Net cash generated from financing activities 3,733,132 7,401,589 400,256 Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash 80,727 (58,218 ) (143,511 ) Net increase (decrease) in cash, cash equivalents and restricted cash 3,482,815 3,784,747 (3,227,756 ) Cash, cash equivalents and restricted cash at beginning of year 3,570,578 7,053,393 10,838,140 Cash, cash equivalents and restricted cash at end of year (1) 7,053,393 10,838,140 7,610,384 (1) As of December 31, 2022, cash and cash equivalents of US$13.2 million was included in assets held for sale within prepaid expenses and other assets.
The following table sets forth a summary of our cash flows for the periods indicated: For the Year Ended December 31, 2021 2022 2023 (US$ thousands) Net cash generated from (used in) operating activities 208,649 (1,055,692 ) 2,079,688 Net cash used in investing activities (3,767,273 ) (2,428,809 ) (5,804,462 ) Net cash generated from financing activities 7,401,589 400,256 366,011 Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash (58,218 ) (143,511 ) (7,964 ) Net increase (decrease) in cash, cash equivalents and restricted cash 3,784,747 (3,227,756 ) (3,366,727 ) Cash, cash equivalents and restricted cash at beginning of year 7,053,393 10,838,140 7,610,384 Cash, cash equivalents and restricted cash at end of year (1) 10,838,140 7,610,384 4,243,657 (1) As of December 31, 2022, cash and cash equivalents of US$13.2 million was included in assets held for sale within prepaid expenses and other assets. 105 Table of Contents Operating Activities Net cash generated from operating activities amounted to US$2.1 billion in 2023 compared to net cash used in operating activities of US$1.1 billion in 2022.
Provision for Credit Losses Our provision for credit losses relates primarily to our credit business. Our provision for credit losses could increase if the size of our loans receivable grows or if the credit environment worsens.
Provision for Credit Losses Our provision for credit losses relates primarily to our credit business. Our provision for credit losses could increase with the growth of our lending activity and loans receivable or if the credit environment worsens.
The improvement in gross profit margins was mainly due to the growth of core marketplace revenue with higher gross profit margin. • Cost of goods sold: Cost of goods sold was relatively stable at US$1.0 billion for 2021 and 2022.
The improvement in gross profit margins was mainly due to the growth of core marketplace revenue with higher gross profit margin. • Digital Entertainment: Cost of revenue decreased by 12.4% from US$1.2 billion in 2021 to US$1.1 billion in 2022, which was largely in line with the decrease in digital entertainment revenue. • Cost of goods sold: Cost of goods sold was relatively stable at US$1.0 billion for 2021 and 2022.
Loss before Income Tax and Share of Results of Equity Investees As a result of the foregoing, we had loss before income tax and share of results of equity investees of US$1.5 billion in 2020, compared to loss before income tax and share of results of equity investees of US$1.7 billion in 2021.
Loss or Income before Income Tax and Share of Results of Equity Investees As a result of the foregoing, we had loss before income tax and share of results of equity investees of US$1.5 billion in 2022, compared to income before income tax and share of results of equity investees of US$432.4 million in 2023.
Cost of Revenue Our total cost of revenue increased by 19.9% from US$6.1 billion in 2021 to US$7.3 billion in 2022. • Digital Entertainment: Cost of revenue decreased by 12.4% from US$1.2 billion in 2021 to US$1.1 billion in 2022, which was largely in line with the decrease in digital entertainment revenue. • E-commerce and other services: Cost of revenue for our e-commerce and other services combined increased by 35.8% from US$3.8 billion in 2021 to US$5.2 billion in 2022.
Cost of Revenue Our total cost of revenue increased by 19.9% from US$6.1 billion in 2021 to US$7.3 billion in 2022. • E-commerce and other services: Cost of revenue for our e-commerce and other services combined increased by 35.8% from US$3.8 billion in 2021 to US$5.2 billion in 2022.
We recognize revenue ratably over the estimated service period. Our revenue generated from digital entertainment accounted for 46.1%, 43.4% and 31.1% of our total revenue in 2020, 2021 and 2022, respectively. The primary driver for revenue in our digital entertainment business is the size of our active user base and the level of user engagement.
Our revenue generated from digital entertainment accounted for 43.4%, 31.1% and 16.6% of our total revenue in 2021, 2022 and 2023, respectively. The primary driver for revenue in our digital entertainment business is the size of our active user base and the level of user engagement.
We utilize models such as transition matrix method based on roll rates and then transformed, taking into account expected future delinquency rate to estimate the likelihood that a loan will default over a given period of time net of any recoveries. These models utilize information that is available at the reporting date about past events, current conditions and macro-economic forecasts.
We utilize models such as transition matrix method based on roll rates and then transformed, taking into account expected future delinquency rate to estimate the likelihood that a loan will default over a given period of time, net of any estimated recoveries.
The decrease in operating cash flows was partially offset by the improvement of net loss / profit position from US$1.1 billion net loss (after adjusting for non-cash items) for the year ended December 31, 2021 to US$314 million net profit (after adjusting for non-cash items) for the year ended December 31, 2022. 102 Table of Contents Net cash generated from operating activities decreased by US$347.2 million to US$208.6 million for the year ended December 31, 2021, compared to US$555.9 million for the year ended December 31, 2020.
The decrease in operating cash flows was partially offset by the improvement of net loss / profit position from US$1.1 billion net loss (after adjusting for non-cash items) for the year ended December 31, 2021 to US$314 million net profit (after adjusting for non-cash items) for the year ended December 31, 2022.
Financial Statements.” We have purchase commitments of US$238.5 million as of December 31, 2022, including US$99.1 million to purchase property and equipment and hosting services, US$13.7 million committed licensing fee payable for the licensing of game titles, and US$125.7 million commitment to invest in certain companies.
Financial Statements.” We have purchase commitments of US$137.8 million as of December 31, 2023, including US$40.9 million to purchase property and equipment and hosting services, US$6.8 million committed licensing fee payable for the licensing of game titles, and US$90.1 million commitment to invest in certain companies.
We offer many ways for users to purchase virtual goods (consisting of virtual currencies and virtual items), including the ShopeePay and Shopee platform, other online payment gateways, bank transfers, credit cards, mobile phone billing and prepaid cards, including our own prepaid cards, which are sold through agents.
We offer many ways for users to purchase in-game items, including through online payment gateways, bank transfers, credit cards, mobile phone billing and prepaid cards (including our own prepaid cards which are sold through agents).
Service revenue pertaining to our e-commerce and other services segment had gross margins of 16.2% and 30.4% in 2021 and 2022, respectively. Sales of goods had gross margins of 6.3% and 10.5% in 2021 and 2022, respectively. Other Operating Income Our other operating income decreased by 3.0% from US$287.9 million in 2021 to US$279.2 million in 2022.
Our digital entertainment segment had gross margins of 71.5% and 72.2% in 2021 and 2022, respectively. Sales of goods had gross margins of 6.3% and 10.5% in 2021 and 2022, respectively. Other Operating Income Our other operating income decreased by 3.0% from US$287.9 million in 2021 to US$279.2 million in 2022.
Such service period is determined in accordance with the estimated average lifespan of the virtual items sold or estimated average lifespan of the paying users of the said games or similar games. • Item-based revenue model . Virtual items have different lifespan patterns: time-based, consumable and durable.
Such performance obligation period is determined in accordance with the estimated average lifespan of the paying user or virtual items sold. • Item-based revenue model . Virtual items have different lifespan patterns: time-based, consumable and durable. • Time-based virtual items are items with a stated expiration time.
Information about segments during the years ended December 31, 2020, 2021 and 2022 presented were as follows: For the Year ended December 31, 2022 Digital Entertainment E-commerce Digital Financial Services Other Services (1) Unallocated expenses (2) Consolidated (US$ thousands) Revenue 3,877,163 7,288,677 1,221,996 61,869 – 12,449,705 Operating income (loss) 1,971,416 (2,013,360 ) (277,264 ) (252,162 ) (916,138 ) (1,487,508 ) Non-operating loss, net (13,025 ) Income tax expense (168,395 ) Share of results of equity investees 11,156 Net loss (1,657,772 ) 100 Table of Contents For the Year ended December 31, 2021 Digital Entertainment E-commerce Digital Financial Services Other Services (1) Unallocated expenses (2) Consolidated (US$ thousands) Revenue 4,320,013 5,122,959 469,774 42,444 – 9,955,190 Operating income (loss) 2,500,081 (2,766,566 ) (640,422 ) (177,633 ) (498,520 ) (1,583,060 ) Non-operating loss, net (132,124 ) Income tax expense (332,865 ) Share of results of equity investees 5,019 Net loss (2,043,030 ) For the Year ended December 31, 2020 Digital Entertainment E-commerce Digital Financial Services Other Services (1) Unallocated expenses (2) Consolidated (US$ thousands) Revenue 2,015,972 2,167,149 60,785 131,758 – 4,375,664 Operating income (loss) 1,016,793 (1,442,593 ) (520,075 ) (49,006 ) (308,444 ) (1,303,325 ) Non-operating loss, net (179,913 ) Income tax expense (141,640 ) Share of results of equity investees 721 Net loss (1,624,157 ) (1) A combination of multiple business activities that does not meet the quantitative thresholds to qualify as reportable segments are grouped together as “Other Services.” (2) Unallocated expenses are mainly related to share-based compensation, impairment of goodwill of prior acquisitions that are not under our reportable segments, and general and corporate administrative costs such as professional fees and other miscellaneous items that are not allocated to segments.
The chief operating decision maker reviews the performance of each segment based on revenue and certain key operating metrics of the operations and uses these results for the purposes of allocating resources to and evaluating the financial performance of each segment. 103 Table of Contents Information about segments during the years ended December 31, 2021, 2022 and 2023 presented were as follows: For the Year ended December 31, 2023 E-commerce Digital Financial Services Digital Entertainment Other Services (1) Unallocated expenses (2) Consolidated (US$ thousands) Revenue 9,000,848 1,759,422 2,172,009 131,281 – 13,063,560 Operating (loss) income (550,470 ) 490,209 1,177,871 (56,728 ) (836,104 ) 224,778 Non-operating income, net 207,616 Income tax expense (262,680 ) Share of results of equity investees (7,032 ) Net income 162,682 For the Year ended December 31, 2022 E-commerce Digital Financial Services Digital Entertainment Other Services (1) Unallocated expenses (2) Consolidated (US$ thousands) Revenue 7,288,677 1,221,996 3,877,163 61,869 – 12,449,705 Operating (loss) income (2,013,360 ) (277,264 ) 1,971,416 (252,162 ) (916,138 ) (1,487,508 ) Non-operating loss, net (13,025 ) Income tax expense (168,395 ) Share of results of equity investees 11,156 Net loss (1,657,772 ) For the Year ended December 31, 2021 E-commerce Digital Financial Services Digital Entertainment Other Services (1) Unallocated expenses (2) Consolidated (US$ thousands) Revenue 5,122,959 469,774 4,320,013 42,444 – 9,955,190 Operating (loss) income (2,766,566 ) (640,422 ) 2,500,081 (177,633 ) (498,520 ) (1,583,060 ) Non-operating loss, net (132,124 ) Income tax expense (332,865 ) Share of results of equity investees 5,019 Net loss (2,043,030 ) (1) A combination of multiple business activities that does not meet the quantitative thresholds to qualify as reportable segments are grouped together as “Other Services.” (2) Unallocated expenses are mainly related to share-based compensation, impairment of goodwill of prior acquisitions that are not under our reportable segments, and general and corporate administrative costs such as professional fees and other miscellaneous items that are not allocated to segments.
Our total revenue increased from US$4.4 billion in 2020 to US$12.4 billion in 2022, a CAGR of 68.7%. We had gross profit of US$1.3 billion, US$3.9 billion and US$5.2 billion in 2020, 2021 and 2022, respectively.
Our total revenue increased from US$10.0 billion in 2021 to US$13.1 billion in 2023, a CAGR of 14.6%. We had gross profit of US$3.9 billion, US$5.2 billion and US$5.8 billion in 2021, 2022 and 2023, respectively.
The accounting estimates related to impairment of long-lived estimate is critical due to the magnitude of the carrying amount of long-lived assets and management’s judgment is required in estimating the recoverable value (undiscounted cash flows) of the asset group, which are sensitive to key assumptions such as projected revenue and sales and marketing expenses.
As of December 31, 2023, our long-lived assets in the E-commerce segment amounted to approximately 84.6% of our total long-lived assets and no impairment had been provided. 112 Table of Contents The accounting estimates related to impairment of long-lived assets is critical due to the magnitude of the carrying amount of long-lived assets and management’s judgment is required in estimating the recoverable value (undiscounted cash flows) of the asset group, which are sensitive to key assumptions such as projected revenue and sales and marketing expenses.
Gross Profit As a result of the foregoing, our gross profit was US$3.9 billion in 2021 and US$5.2 billion in 2022. We had gross margins of 39.1% and 41.6% in 2021 and 2022, respectively. Our digital entertainment segment had gross margins of 71.5% and 72.2% in 2021 and 2022, respectively.
Gross Profit As a result of the foregoing, our gross profit was US$3.9 billion in 2021 and US$5.2 billion in 2022. We had gross margins of 39.1% and 41.6% in 2021 and 2022, respectively. Service revenue pertaining to our e-commerce and other services segment had gross margins of 16.2% and 30.4% in 2021 and 2022, respectively.
This was primarily attributable to our time deposits and long-term investments such as equity investments of US$2.5 billion, an increase in loans receivable of US$1.2 billion and purchase of property and equipment of US$772.2 million. These were partially offset by proceeds from maturity and disposal of investments of US$798.2 million.
This was primarily attributable to purchase of investments of US$2.6 billion mainly consisting of time deposits and liquid investment products, an increase in loans receivable of our credit business of US$1.2 billion and purchase of property and equipment of US$924.2 million. These were partially offset by proceeds from maturity and disposal of investments of US$2.3 billion.
We earn revenue denominated in local currencies of our markets in Southeast Asia, Taiwan and Brazil, among other currencies, while some of our costs and expenses are paid in other foreign currencies. We do not rely on any single currency as we earn revenue in different local currencies across our markets and keep a significant cash position in U.S. dollars.
We do not rely on any single currency as we earn revenue in different local currencies across our markets and keep a significant cash position in U.S. dollars.
We regularly evaluate these estimates and assumptions based on the most recently available information, our own historical experiences and other factors that we believe to be relevant under the circumstances. Since our financial reporting process inherently relies on the use of estimates and assumptions, our actual results could differ from what we expect.
We regularly evaluate these estimates and assumptions based on the most recently available information, our own historical experiences and other factors that we believe to be relevant under the circumstances.
In addition, as determined in accordance with local regulations, our subsidiaries and VIEs in certain of our markets may be restricted from paying us dividends offshore or from transferring a portion of their assets to us, either in the form of dividends, loans or advances, unless certain requirements are met, and regulatory approvals are obtained. See “Item 3. Key Information—D.
If our subsidiaries or any newly formed subsidiaries incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends to us. 109 Table of Contents In addition, as determined in accordance with local regulations, our subsidiaries and VIEs in certain of our markets may be restricted from paying us dividends offshore or from transferring a portion of their assets to us, either in the form of dividends, loans or advances, unless certain requirements are met, and regulatory approvals are obtained.
We also purchase products from manufacturers and third parties and sell them directly to buyers on our Shopee platform. • In our digital entertainment business, our primary source of revenue is the sale of in-game items.
We also purchase products from manufacturers and third parties and sell them directly to buyers on our Shopee platform. • In our digital financial services business, we mainly monetize by earning interest and fees from our credit and banking businesses, charging fees from our mobile wallet services and by earning premium or commission from our insurance business. • In our digital entertainment business, our primary source of revenue is the sale of in-game items.
Major Factors Affecting Our Results of Operations Our results of operations and financial condition are affected by general factors driving the e-commerce, digital entertainment, digital financial services and other industries in our markets, including demographic and macro-economic growth, technology adoption trends, and the digital transformation of industries.
We incurred net losses of US$2.0 billion and US$1.7 billion in 2021 and 2022 and net income of US$162.7 million in 2023, respectively. 91 Table of Contents Major Factors Affecting Our Results of Operations Our results of operations and financial condition are affected by general factors driving the e-commerce, digital financial services, digital entertainment and other industries in our markets, including demographic and macro-economic growth, technology adoption trends, and the digital transformation of industries.
By offering our own mobile wallet and payment processing services, we strive to effectively reduce our payment channel costs and capture value that may otherwise go to third-party payment service providers.
By offering our own mobile wallet and payment processing services, we strive to effectively reduce our payment channel costs and capture value that may otherwise go to third-party payment service providers. Our scale in our digital entertainment business has enabled us to optimize our variable costs, as has our operating scale for e-commerce and digital financial services.
For accounts receivable, loans receivable and off-balance sheet loan commitments, we establish a provision matrix applied on the portfolio segmented by factors such as geographic region and products that are considered to have similar credit characteristics and risk of loss.
For our consumer and SME loans receivable, we establish a provision matrix applied on the portfolio segmented by factors such as geographic region and products that are considered to have similar credit characteristics and risk of loss. We compute our allowance for credit loss based on our historical lifetime credit loss experience, adjusted for relevant forward-looking factors.
Accounts receivable, loans receivable and available-for-sale investment are written off in the period the receivable or investment is deemed uncollectible. 109 Table of Contents Recent Accounting Pronouncements The recent accounting pronouncement adopted during the year ended December 31, 2022 is discussed and included in Note 2(z) – Summary of Significant Accounting Policies – Recently adopted accounting pronouncements in the accompanying notes to consolidated financial statements included in “Item 17.
Recent Accounting Pronouncements The recent accounting pronouncement adopted during the year ended December 31, 2023 is discussed and included in Note 2(z) – Summary of Significant Accounting Policies – Recently adopted accounting pronouncements in the accompanying notes to consolidated financial statements included in “Item 17.
For the years ended December 31, 2020, 2021 and 2022, we recognized total interest expense for coupon interest of US$35.5 million, US$36.2 million and US$36.5 million and amortization of discount on the liability component of US$88.2 million, US$100.1 million and US$7.5 million, respectively, on our then outstanding convertible notes.
As of March 31, 2024, approximately US$1.6 billion aggregate of principal amount of our 2026 convertible notes remained outstanding. 108 Table of Contents For the years ended December 31, 2021, 2022 and 2023, we recognized total interest expense for coupon interest of US$36.2 million, US$36.5 million and US$34.3 million and amortization of discount on the liability component of US$100.1 million, US$7.5 million and US$6.0 million, respectively, on our then outstanding convertible notes.
We record a valuation allowance against deferred tax assets if, based on the weight of available evidence, it is more likely than not that some portion, or all, of the deferred tax assets will not be realized.
We record a valuation allowance to offset deferred tax assets if based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. Changes in estimates, due to unanticipated events or otherwise, could have a material effect on our consolidated financial statements.
The principal driver of our operating cash flows is cash received from sales of our products and services, including proceeds from our sales of in-game virtual items in our digital entertainment business, fees collected from customers in our e-commerce business, interest received from our loan business, commissions from merchants in our digital financial services business and proceeds from direct sales of products, offset by operating expenses.
The principal driver of our operating cash flows is cash received from sales of our services and products, including proceeds from our sales of in-game virtual items in our digital entertainment business, fees from paid advertising services, transaction-based fees, value-added services and proceeds from direct sales of goods in our e-commerce business, interest and fees received from our credit and banking businesses, fees from our mobile wallet services and premium or commissions from our insurance business, offset by operating expenses.
Operating Income and Expenses Our operating expenses consist of sales and marketing expenses, general and administrative expenses, provision for credit losses, research and development expenses and impairment of goodwill, net of other operating income.
As such, our e-commerce has lower gross margins compared to our digital entertainment business. Operating Income and Expenses Our operating expenses consist of sales and marketing expenses, general and administrative expenses, provision for credit losses, research and development expenses and impairment of goodwill, net of other operating income.
If the qualitative assessment indicates that goodwill impairment is more likely than not, we apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a goodwill allocated to the reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit.
If the qualitative assessment indicates that it is more likely than not that the carrying value of the reporting unit exceeds its fair value, we then perform a quantitative test to calculate the estimated fair value of the reporting unit. We record goodwill impairment if the carrying amount of the reporting unit exceeds its fair value.
Our cost of revenue for digital financial services primarily consists of server and hosting costs, interest expenses for deposits payable, bank transaction fees for transactions conducted through our SeaMoney platform, commissions we pay to counter operators, staff compensation and welfare costs, which include share-based compensation, and other miscellaneous costs.
E-commerce Our cost of revenue for e-commerce services primarily consists of expenses associated with our logistics and other value-added services, bank transaction fees for transactions conducted through our Shopee platform, server and hosting costs, and staff compensation and welfare costs, which include share-based compensation. 95 Table of Contents Digital Financial Services Our cost of revenue for digital financial services primarily consists of server and hosting costs, interest expenses for customer deposits under our banking business, interest expenses related to our credit business, bank transaction fees, amortization costs for internally developed software, commissions we pay to counter operators, and staff compensation and welfare costs, which include share-based compensation.
For example, because game players find it highly beneficial to join a platform with a large number of other game players, each new player that joins creates value for the existing community.
Our businesses enjoy network effects, virtuous cycles and synergies across our platforms. We benefit from the network effects resulting from the significant social aspects of our platforms. For example, because game players find it highly beneficial to join a platform with a large number of other game players, each new player that joins creates value for the existing community.
We also receive customer deposits from our banking business. As of December 31, 2020, 2021 and 2022, we had US$7.1 billion, US$10.8 billion and US$7.6 billion, respectively, in cash, cash equivalents and restricted cash.
As of December 31, 2021, 2022 and 2023, we had US$10.8 billion, US$7.6 billion and US$4.2 billion, respectively, in cash, cash equivalents and restricted cash.
Upon conversion, we have the right, at our option, to pay or deliver, either cash, ADSs, or a combination of cash and ADSs to converting holders.
Upon conversion, we have the right, at our option, to pay or deliver, either cash, ADSs, or a combination of cash and ADSs to converting holders. During fiscal year 2023, we repurchased US$244.5 million aggregate of principal amount of our 2026 convertible notes.
Financial Statements.” Recognition of Digital Entertainment Revenue We distribute online games, including self-developed games and licensed games from game developers, through our PC and mobile based applications and certain app stores.
For additional information, see the disclosure included in Note 2 – Summary of Significant Accounting Policies in the accompanying notes to consolidated financial statements included in “Item 17. Financial Statements.” Recognition of Digital Entertainment Revenue We distribute online games, including self-developed games and licensed games from game developers, through our PC and mobile based applications and certain app stores.
Other Income, Expenses, Gains and Losses Our interest income, interest expense, net investment loss, net (loss) gain on debt extinguishment, fair value change for convertible notes and foreign exchange (loss) gain was a net loss of US$179.9 million in 2020 compared to a net loss of US$132.1 million in 2021.
Other Income, Expenses, Gains and Losses Our interest income, interest expense, net investment loss, net (loss) gain on debt extinguishment, and foreign exchange gain (loss) was a net loss of US$13.0 million in 2022, compared to a net income of US$207.6 million in 2023.
Sales and Marketing Expenses Our sales and marketing expenses consist primarily of online and offline advertising expenses, sales incentive, and staff compensation and welfare expenses, which include share-based compensation for our employees engaged in sales and marketing functions. In 2022, sales and marketing expenses decreased mainly due to our efforts to continue optimizing operating costs and achieving higher cost efficiencies.
Sales and Marketing Expenses Our sales and marketing expenses consist primarily of online and offline advertising expenses, sales incentives, and staff compensation and welfare expenses, which include share-based compensation for our employees engaged in sales and marketing functions.
This increase was primarily driven by the improved monetization in our e-commerce business and the growth of our credit business. • Sales of goods : Revenue was relatively stable at US$1.1 billion for 2021 and 2022.
This increase was primarily driven by the improved monetization in our e-commerce business and the growth of our credit business. • Digital Entertainment: Our digital entertainment revenue decreased by 10.3% from US$4.3 billion in 2021 to US$3.9 billion in 2022.
In connection with such efforts, the excess sales incentive, representing the sales incentive given exceeding the revenue we expect to receive on a transaction-by-transaction basis, was approximately 12% of total revenue in 2022, which decreased over the quarters and was less than 5% of our total revenue in the fourth quarter of 2022.
Our excess sales incentive, representing the sales incentive given exceeding the revenue we expect to receive on a transaction-by-transaction basis, was less than 10% of total revenue in 2023.

… 133 more changes not shown on this page.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

57 edited+7 added−8 removed64 unchanged
Biggest changeIn limited exceptional circumstances, a shareholder may have the right to seek damages in our name if a duty owed by our directors is breached. 116 Table of Contents The functions and powers of our board of directors include, among others: • convening shareholders’ annual general meetings and reporting its work to shareholders at such meetings; • declaring dividends and distributions; • appointing officers and determining the term of office of officers; • exercising the borrowing powers of our company and mortgaging the property of our company; and • approving the transfer of shares of our company, including the registering of such shares in our share register.
Biggest changeThe functions and powers of our board of directors include, among others: • convening shareholders’ annual general meetings and reporting its work to shareholders at such meetings; • declaring dividends and distributions; • appointing officers and determining the term of office of officers; • exercising the borrowing powers of our company and mortgaging the property of our company; and • approving the transfer of shares of our company, including the registering of such shares in our share register. 120 Table of Contents Terms of Directors and Executive Officers Each of our directors holds office until the expiration of his or her term, as may be provided in a written agreement with our company, and his or her successor has been elected and qualified, until his or her resignation or until his or her office is otherwise vacated in accordance with our articles of association.
David Jingye Chen is our co-founder and serves as the chief product officer of Shopee. He was formerly group chief of staff, a position he held from January 2017 to December 2019. Prior to that, David served as our group chief operating officer from our inception in May 2009 to December 2016. He previously held positions at PSA Corporation Limited.
David Jingye Chen is our co-founder and serves as the chief product officer of Shopee. He was formerly chief of staff, a position he held from January 2017 to December 2019. Prior to that, David served as our chief operating officer from our inception in May 2009 to December 2016. He previously held positions at PSA Corporation Limited.
Gang has served as our group chief operating officer since January 2017 and served as our group chief technology officer between March 2010 and December 2016. He previously worked at Wilmar International and the Economic Development Board of Singapore. Gang holds B.S. degrees in Computer Science and Economics from Carnegie Mellon University.
Gang has served as our chief operating officer since January 2017 and served as our chief technology officer between March 2010 and December 2016. He previously worked at Wilmar International and the Economic Development Board of Singapore. Gang holds B.S. degrees in Computer Science and Economics from Carnegie Mellon University.
Terry holds a bachelor’s degree in Computer Engineering with first class honors from Nanyang Technological University. Yanjun Wang is our group chief corporate officer, group general counsel and company secretary. Yanjun has served as our group chief corporate officer since May 2019, company secretary since November 2017 and group general counsel since March 2014.
Terry holds a bachelor’s degree in Computer Engineering with first class honors from Nanyang Technological University. Yanjun Wang is our chief corporate officer, general counsel and company secretary. Yanjun has served as our chief corporate officer since May 2019, company secretary since November 2017 and general counsel since March 2014.
The audit committee is responsible for, among other things: • selecting our independent registered public accounting firm and pre-approving all auditing and non-auditing services permitted to be performed by our independent registered public accounting firm; • reviewing with our independent registered public accounting firm any audit problems or difficulties and management’s response; • reviewing and approving related party transactions; • discussing the annual audited financial statements with management and our independent registered public accounting firm; • meeting periodically with the management and our internal auditor and our independent registered public accounting firm; and • reviewing and discussing our accounting and control policies and procedures and any steps taken to monitor and control major financial risk exposure. 115 Table of Contents Compensation Committee .
The audit committee is responsible for, among other things: • selecting our independent registered public accounting firm and pre-approving all auditing and non-auditing services permitted to be performed by our independent registered public accounting firm; • reviewing with our independent registered public accounting firm any audit problems or difficulties and management’s response; • reviewing and approving related party transactions; • discussing the annual audited financial statements with management and our independent registered public accounting firm; • meeting periodically with the management and our internal auditor and our independent registered public accounting firm; and • reviewing and discussing our accounting and control policies and procedures and any steps taken to monitor and control major financial risk exposure. 119 Table of Contents Compensation Committee .
Forrest Xiaodong Li, our chairman and group chief executive officer, as his or her irrevocable proxy to vote all such Class A ordinary shares on all matters on which such Class A ordinary shares are entitled to vote.
Forrest Xiaodong Li, our chairman and chief executive officer, as his or her irrevocable proxy to vote all such Class A ordinary shares on all matters on which such Class A ordinary shares are entitled to vote.
Tony Tianyu Hou has served as our director since February 2018. Tony joined our company in September 2010 and has served as our group chief financial officer since January 2013. He previously served as our financial controller.
Tony Tianyu Hou has served as our director since February 2018. Tony joined our company in September 2010 and has served as our chief financial officer since January 2013. He previously served as our financial controller.
We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company. For certain information as of December 31, 2022 concerning the outstanding awards we have granted to our directors and executive officers individually pursuant to our share incentive plan, see “—B.
We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company. For certain information as of December 31, 2023 concerning the outstanding awards we have granted to our directors and executive officers individually pursuant to our share incentive plan, see “—B.
The business address or registered office of all the other aforesaid entities is 31/F, Kerry Centre, 683 King’s Road, Quarry Bay, Hong Kong, except for City Jet Limited and Peacebright Assets Limited, whose registered office is at Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands. Shares beneficially owned by Mr.
The business address or registered office of all the other aforesaid entities is 31/F, Kerry Centre, 683 King’s Road, Quarry Bay, Hong Kong, except for City Jet Limited whose registered office is at Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands. Shares beneficially owned by Mr.
He holds an M.B.A. degree from the University of Chicago’s Booth School of Business and a bachelor’s degree in Accounting from Fudan University. 110 Table of Contents David Heng Chen Seng has served as our director since October 2017. David is the chief executive officer of Temasek Trust Asset Management, a Singapore-based global asset management firm established by Temasek Trust.
He holds an M.B.A. degree from the University of Chicago’s Booth School of Business and a bachelor’s degree in Accounting from Fudan University. David Heng Chen Seng has served as our director since October 2017. David is the chief executive officer of Temasek Trust Asset Management, a Singapore-based global asset management firm established by Temasek Trust.
The table below sets forth certain information as of December 31, 2022 concerning the outstanding awards we have granted to our directors and executive officers by the time on an individual basis.
The table below sets forth certain information as of December 31, 2023 concerning the outstanding awards we have granted to our directors and executive officers by the time on an individual basis.
Share Incentive Plan We maintain a share incentive plan in order to attract, motivate, retain and reward talent, provide additional incentives to our officers, employees, directors and other eligible persons, and promote the success of our business and the interests of our shareholders. 112 Table of Contents 2009 Share Incentive Plan We adopted the 2009 Plan to promote the success of our business and the interests of our shareholders by providing additional incentives to attract, motivate, retain and reward our officers, employees, directors and other eligible persons and to link the interests of the award recipients with our shareholders.
Share Incentive Plan We maintain a share incentive plan in order to attract, motivate, retain and reward talent, provide additional incentives to our officers, employees, directors and other eligible persons, and promote the success of our business and the interests of our shareholders. 2009 Share Incentive Plan We adopted the 2009 Plan to promote the success of our business and the interests of our shareholders by providing additional incentives to attract, motivate, retain and reward our officers, employees, directors and other eligible persons and to link the interests of the award recipients with our shareholders.
With respect to all these shares, Forrest Xiaodong Li has been given an irrevocable proxy with regard to all matters that are subject to the vote of shareholders, and such numbers are excluded from the total voting power of Mr. Feng. (6) Represents (i) 8,289,101 Class A ordinary shares held or beneficially owned by Mr.
With respect to all these shares, Forrest Xiaodong Li has been given an irrevocable proxy with regard to all matters that are subject to the vote of shareholders, and such numbers are excluded from the total voting power of Mr. Feng. (6) Represents (i) 8,841,241 Class A ordinary shares held or beneficially owned by Mr.
With respect to 3,553,869 Class A ordinary shares, Forrest Xiaodong Li has been given an irrevocable proxy with regard to all matters that are subject to the vote of shareholders, and such numbers are excluded from the total voting power of Mr. Chen.
With respect to 3,706,703 Class A ordinary shares, Forrest Xiaodong Li has been given an irrevocable proxy with regard to all matters that are subject to the vote of shareholders, and such numbers are excluded from the total voting power of Mr. Chen.
Kuok disclaims beneficial ownership of ordinary shares held or beneficially owned by all of the aforesaid entities for all other purposes. The business address of Kerry Group Limited is 32/F, Kerry Centre, 683 King’s Road, Quarry Bay, Hong Kong.
Kuok is one of the discretionary beneficiaries. Mr. Kuok disclaims beneficial ownership of ordinary shares held or beneficially owned by all of the aforesaid entities for all other purposes. The business address of Kerry Group Limited is 32/F, Kerry Centre, 683 King’s Road, Quarry Bay, Hong Kong.
In September 2022, Tencent granted an irrevocable voting proxy with respect to all its Class A ordinary shares to our board of directors (duly constituted from time to time) to vote on matters that are subject to the vote of shareholders of Sea. Total voting power of Tencent excludes voting power subject to such proxy.
In September 2022, Tencent granted an irrevocable voting proxy with respect to all its Class A ordinary shares to our board of directors (duly constituted from time to time) to vote on matters that are subject to the vote of shareholders of Sea.
Previously he served as our head of mobile business. Before joining our company, Chris worked at Rocket Internet SE, where he served in management roles at Zalora and Lazada, and at McKinsey & Company. Chris holds a bachelor’s degree in Computer Science with first class honors from the National University of Singapore.
Before joining our company, Chris worked at Rocket Internet SE, where he served in management roles at Zalora and Lazada, and at McKinsey & Company. Chris holds a bachelor’s degree in Computer Science with first class honors from the National University of Singapore.
Power of Attorney on Voting . Under the award agreements, with respect to the Class A ordinary shares issued upon exercise of options or vesting of restricted shares or restricted share units, almost all of our award recipients appoint Mr.
Under the award agreements, with respect to the Class A ordinary shares issued upon exercise of options or vesting of restricted shares or restricted share units, almost all of our award recipients appoint Mr.
Termination . The plan will terminate in 2027. Our board of directors may terminate the plan at any time, in whole or in part. 113 Table of Contents Amendment, Suspension or Termination .
Termination . The plan will terminate in 2027. Our board of directors may terminate the plan at any time, in whole or in part. Amendment, Suspension or Termination .
The compensation of our directors is determined by the board of directors. There is no mandatory retirement age for directors. D. Employees We had a total of approximately 33,800, 67,300 and 63,800 employees as of December 31, 2020, 2021 and 2022, respectively.
The compensation of our directors is determined by the board of directors. There is no mandatory retirement age for directors. D. Employees We had a total of approximately 67,300, 63,800 and 62,700 employees as of December 31, 2021, 2022 and 2023, respectively.
Compensation Compensation of Directors and Executive Officers For the year ended December 31, 2022, we paid and accrued fees and compensation in cash (excluding equity-based awards) of approximately US$5.1 million to our directors and executive officers as a group.
B. Compensation Compensation of Directors and Executive Officers For the year ended December 31, 2023, we paid and accrued fees and compensation in cash (excluding equity-based awards) of approximately US$ 1.6 million to our directors and executive officers as a group.
Name Class A Ordinary Shares Underlying Outstanding Awards Granted Price (US$/Share) Date of Grant Date of Expiration Forrest Xiaodong Li 10,000,000 (1)(3) 15.0 April 30, 2019 April 30, 2029 5,000,000 (1)(3) 15.0 April 30, 2020 April 30, 2030 5,000,000 (1) 120.0 April 17, 2022 April 17, 2032 Gang Ye 4,650,000 (1) 15.0 February 28, 2018 February 28, 2028 5,000,000 (1) 120.0 April 17, 2022 April 17, 2032 Tony Tianyu Hou * (1) 4.5 January 26, 2015 January 26, 2025 * (1) 15.0 February 28, 2018 February 28, 2028 * (1) 120.0 April 17, 2022 April 17, 2032 David Heng Chen Seng * (2) — October 19, 2021 — Khoon Hua Kuok 7,500 (2) — October 19, 2021 — Chris Zhimin Feng 100,000 (1) 4.5 January 26, 2015 January 26, 2025 4,500,000 (1) 15.0 February 28, 2018 February 28, 2028 4,000,000 (1) 15.0 February 28, 2019 February 28, 2029 6,000,000 (1) 120.0 April 17, 2022 April 17, 2032 Terry Feng Zhao * (1) 4.5 January 26, 2015 January 26, 2025 * (1) 15.0 January 31, 2019 January 31, 2029 * (1) 120.0 April 17, 2022 April 17, 2032 Yanjun Wang * (1) 15.0 February 28, 2018 February 28, 2028 * (1) 120.0 April 17, 2022 April 17, 2032 David Jingye Chen 802,140 (1) 1.8 January 11, 2014 January 11, 2024 220,000 (1) 4.5 January 26, 2015 January 26, 2025 2,000,000 (1) 15.0 February 28, 2018 February 28, 2028 2,000,000 (1) 120.0 April 17, 2022 April 17, 2032 David Y Ma * (1) 120.0 April 17, 2022 April 17, 2032 All directors and executive officers as a group 66,747,140 * Each of these directors and executive officers beneficially owns less than 1% of our total outstanding shares as of December 31, 2022.
Name Class A Ordinary Shares Underlying Outstanding Awards Granted Price (US$/Share) Date of Grant Date of Expiration Forrest Xiaodong Li 10,000,000 (1)(3) 15.0 April 30, 2019 April 30, 2029 5,000,000 (1)(3) 15.0 April 30, 2020 April 30, 2030 5,000,000 (1) 120.0 April 17, 2022 April 17, 2032 Gang Ye 4,650,000 (1) 15.0 February 28, 2018 February 28, 2028 5,000,000 (1) 120.0 April 17, 2022 April 17, 2032 Tony Tianyu Hou * (1) 15.0 February 28, 2018 February 28, 2028 * (1) 120.0 April 17, 2022 April 17, 2032 * (2) — July 31, 2023 — David Heng Chen Seng * (2) — October 19, 2021 — Khoon Hua Kuok 5,000 (2) — October 19, 2021 — David Y Ma * (1) 120.0 April 17, 2022 April 17, 2032 * (2) — May 15, 2023 — Chris Zhimin Feng 100,000 (1) 4.5 January 26, 2015 January 26, 2025 4,500,000 (1) 15.0 February 28, 2018 February 28, 2028 4,000,000 (1) 15.0 February 28, 2019 February 28, 2029 6,000,000 (1) 120.0 April 17, 2022 April 17, 2032 Terry Feng Zhao * (1) 15.0 January 31, 2019 January 31, 2029 * (1) 120.0 April 17, 2022 April 17, 2032 Yanjun Wang * (1) 15.0 February 28, 2018 February 28, 2028 * (1) 120.0 April 17, 2022 April 17, 2032 * (2) — July 31, 2023 — David Jingye Chen 220,000 (1) 4.5 January 26, 2015 January 26, 2025 2,000,000 (1) 15.0 February 28, 2018 February 28, 2028 2,000,000 (1) 120.0 April 17, 2022 April 17, 2032 All directors and executive officers as a group 59,906,667 * Each of these directors and executive officers beneficially owns less than 1% of our total outstanding shares as of December 31, 2023.
Kuok do not include the shares issuable upon conversion of the following convertible notes which were not convertible accordingly to their respective terms and conditions within 60 days of March 15, 2023: (i) US$10 million principal amount of our 2025 convertible notes currently held by Velmar Company Limited, and (ii) US$35 million principal amount of our 2026 convertible notes currently held by Merrywood Investments Limited, a British Virgin Islands company , wholly owned by Kerry Group Limited, subject to the terms and conditions of such notes .
Kuok do not include the shares issuable upon conversion of the following convertible notes which were not convertible accordingly to their respective terms and conditions within 60 days of March 31, 2024: (i) US$100 million principal amount of our 2024 convertible notes currently held by Macromind Investments Limited, (ii) US$10 million principal amount of our 2025 convertible notes currently held by Velmar Company Limited, a Hong Kong company , wholly owned by Kerry Group Limited, and (iii) US$35 million principal amount of our 2026 convertible notes currently held by Merrywood Investments Limited, a British Virgin Islands company , wholly owned by Kerry Group Limited, subject to the terms and conditions of such notes .
(2) Represents (i) 45,527,793 Class B ordinary shares held by Blue Dolphins Venture Inc, a British Virgin Islands company wholly owned by Mr. Li, (ii) 3,038,831 Class A ordinary shares beneficially owned by Mr. Li (including through an entity solely owned and controlled by Mr. Li), (iii) 16,000,000 Class A ordinary shares issuable upon exercise of options held by Mr.
(2) Represents (i) 45,527,793 Class B ordinary shares held by Blue Dolphins Venture Inc, a British Virgin Islands company wholly owned by Mr. Li, (ii) 2,695,579 Class A ordinary shares beneficially owned by Mr. Li (including through an entity solely owned and controlled by Mr. Li), (iii) 17,000,000 Class A ordinary shares issuable upon exercise of options held by Mr.
Directors and Executive Officers Age Position/Title Forrest Xiaodong Li 45 Chairman and Group Chief Executive Officer Gang Ye 42 Director and Group Chief Operating Officer Tony Tianyu Hou 44 Director and Group Chief Financial Officer David Heng Chen Seng 56 Director Khoon Hua Kuok 44 Director Chris Zhimin Feng 40 Group President Terry Feng Zhao 39 President of Garena Yanjun Wang 42 Group Chief Corporate Officer, Group General Counsel and Company Secretary David Jingye Chen 42 Chief Product Officer of Shopee David Y Ma 42 Chief Investment Officer of Sea Capital Forrest Xiaodong Li is our founder and has served as the chairman of Sea Limited and our group chief executive officer since our inception in May 2009.
Directors and Executive Officers Age Position/Title Forrest Xiaodong Li 46 Chairman and Chief Executive Officer Gang Ye 43 Director and Chief Operating Officer Tony Tianyu Hou 45 Director and Chief Financial Officer David Heng Chen Seng 57 Director Khoon Hua Kuok 45 Director David Y Ma 43 Director Chris Zhimin Feng 41 President Terry Feng Zhao 40 President of Garena Yanjun Wang 43 Chief Corporate Officer, General Counsel and Company Secretary David Jingye Chen 43 Chief Product Officer of Shopee Forrest Xiaodong Li is our founder and has served as the chairman of Sea Limited and our chief executive officer since our inception in May 2009.
With respect to 12,603,431 Class A ordinary shares, Forrest Xiaodong Li has been given an irrevocable proxy with regard to all matters that are subject to the vote of shareholders, and such numbers are excluded from the total voting power of Mr. Ye.
With respect to 13,111,553 Class A ordinary shares, Forrest Xiaodong Li has been given an irrevocable proxy with regard to all matters that are subject to the vote of shareholders, and such numbers are excluded from the total voting power of Mr.
As of March 15, 2023, 379,779,386 of our Class A ordinary shares were held as ADSs by the depositary for our ADS holders. Other than the depositary, we are not aware of any record shareholder being a United States citizen or an entity incorporated in the United States as of March 15, 2023.
As of March 31, 2024, 392,323,309 of our Class A ordinary shares were held as ADSs by the depositary for our ADS holders. Other than the depositary, we are not aware of any record shareholder being a United States citizen or an entity incorporated in the United States as of March 31, 2024.
(9) Represents 45,527,793 Class B ordinary shares held by Blue Dolphins Venture Inc, a company wholly owned by Forrest Xiaodong Li. The registered address of Blue Dolphins Venture Inc is Kingston Chambers, P.O. Box 173, Road Town, Tortola, British Virgin Islands.
Total voting power of Tencent excludes voting power subject to such proxy. 123 Table of Contents (9) Represents 45,527,793 Class B ordinary shares held by Blue Dolphins Venture Inc, a company wholly owned by Forrest Xiaodong Li. The registered address of Blue Dolphins Venture Inc is Kingston Chambers, P.O. Box 173, Road Town, Tortola, British Virgin Islands.
Such proxy gives our board of directors (duly constituted from time to time) approximately 8.7% of total voting power as of March 15, 2023.
Such proxy gives our board of directors (duly constituted from time to time) approximately 8.6% of total voting power as of March 31, 2024.
Our board of directors or one or more committees appointed by the board act as the plan administrator. Types of Awards .
The following paragraphs summarize the terms of the 2009 Plan. Plan Administration . Our board of directors or one or more committees appointed by the board act as the plan administrator. Types of Awards .
The total number of Class A ordinary shares beneficially owned by all directors and executive officers as a group and the voting power of all directors and executive officers as a group have included the shares subject to such proxy. 119 Table of Contents (8) Based on a Schedule 13D/A filed with the SEC on September 8, 2022 by Tencent Holdings Limited and Tencent Limited, the number of shares beneficially owned by Tencent entities are as follows: (i) 1,816,833 Class A ordinary shares beneficially owned by Tencent Holdings Limited through Huang River Investment Limited, (ii) 98,510,410 Class A ordinary shares held by Tencent Limited, and (iii) 3,937,500 Class A ordinary shares by Tencent Growthfund Limited, a wholly-owned subsidiary of Tencent Holdings Limited.
(8) Based on a Schedule 13D/A filed with the SEC on September 8, 2022 by Tencent Holdings Limited and Tencent Limited, the number of shares beneficially owned by Tencent entities are as follows: (i) 1,816,833 Class A ordinary shares beneficially owned by Tencent Holdings Limited through Huang River Investment Limited, (ii) 98,510,410 Class A ordinary shares held by Tencent Limited, and (iii) 3,937,500 Class A ordinary shares by Tencent Growthfund Limited, a wholly-owned subsidiary of Tencent Holdings Limited.
The following table indicates the distribution of our employees by function as of December 31, 2022: Function Number of Employees General operation 33,600 Sales and marketing 13,000 General and administrative 5,900 Research and development 11,300 Total 63,800 We generally enter into standard confidentiality and employment agreements with our management and other employees.
The following table indicates the distribution of our employees by function as of December 31, 2023: Function Number of Employees General operation 36,900 Sales and marketing 10,600 General and administrative 5,600 Research and development 9,600 Total 62,700 We generally enter into standard confidentiality and employment agreements with our management and other employees.
Moreover, each executive officer has agreed not to, for a certain period following termination of his or her employment or expiration of the employment agreement: (i) carry on or be engaged, concerned or interested directly or indirectly whether as shareholder, director, employee, partner, agent or otherwise carry on any business in direct competition with us, (ii) solicit or entice away any of our customer, client, representative or agent, or (iii) employ, solicit or entice away or attempt to employ, solicit or entice away any of our officers, managers, consultants or employees.
Moreover, each executive officer has agreed not to, for a certain period following termination of his or her employment or expiration of the employment agreement: (i) carry on or be engaged, concerned or interested directly or indirectly whether as shareholder, director, employee, partner, agent or otherwise carry on any business in direct competition with us, (ii) solicit or entice away any of our customer, client, representative or agent, or (iii) employ, solicit or entice away or attempt to employ, solicit or entice away any of our officers, managers, consultants or employees. 115 Table of Contents We have entered into indemnification agreements with our directors and executive officers, pursuant to which we will agree to indemnify our directors and executive officers against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being such a director or executive officer.
An executive officer may terminate his or her employment at any time with a three- to six-month prior written notice. 111 Table of Contents Each executive officer has agreed to hold, both during and after the employment agreement expires or is earlier terminated, in strict confidence and not to use or disclose to any person, corporation or other entity without written consent, any confidential information or trade secrets.
Each executive officer has agreed to hold, both during and after the employment agreement expires or is earlier terminated, in strict confidence and not to use or disclose to any person, corporation or other entity without written consent, any confidential information or trade secrets.
Our company has the right to seek damages if a duty owed by our directors is breached.
Our company has the right to seek damages if a duty owed by our directors is breached. In limited exceptional circumstances, a shareholder may have the right to seek damages in our name if a duty owed by our directors is breached.
Class A Ordinary Shares Class B Ordinary Shares Percentage of Total Class A and Class B Ordinary Shares† Percentage of Total Voting Power Held †† Directors and Executive Officers: (1) Forrest Xiaodong Li (2) 63,610,849 45,527,793 17.9 59.9 Gang Ye (3) 35,618,937 — 6.2 1.9 Tony Tianyu Hou * — * * David Heng Chen Seng * — * * Khoon Hua Kuok (4) 16,611,063 — 2.9 1.4 Chris Zhimin Feng (5) 7,450,000 — 1.3 0.0 Terry Feng Zhao * — * * Yanjun Wang * — * * David Jingye Chen (6) 11,711,241 — 2.1 0.7 David Y Ma * — * * All directors and executive officers as a group (7) 218,541,667 45,527,793 43.2 72.2 Principal Shareholders: Tencent entities (8) 104,264,743 — 18.4 0.0 Blue Dolphins Venture Inc (9) — 45,527,793 8.0 56.7 Capital Research Global Investors (10) 40,850,962 — 7.2 3.4 * Less than 1% of our total outstanding shares on an as converted basis. † For each person and group included in this column, percentage ownership is calculated by dividing the number of shares beneficially owned by such person or group, including shares that such person or group has the right to acquire within 60 days after March 15, 2023, by the sum of Class A and Class B ordinary shares, and the number of shares that such person or group has the right to acquire beneficial ownership within 60 days after March 15, 2023. †† For each person and group included in this column, percentage of total voting power represents voting power based on both Class A and Class B ordinary shares beneficially owned by such person or group with respect to all outstanding Class A and Class B ordinary shares as one single class.
These shares, however, are not included in the computation of the percentage ownership of any other person. 121 Table of Contents Class A Ordinary Shares Class B Ordinary Shares Percentage of Total Class A and Class B Ordinary Shares† Percentage of Total Voting Power Held †† Directors and Executive Officers: (1) Forrest Xiaodong Li (2) 69,416,146 45,527,793 18.5 59.8 Gang Ye (3) 34,087,398 — 5.9 1.7 Tony Tianyu Hou * — * * David Heng Chen Seng * — * * Khoon Hua Kuok (4) 8,207,907 — 1.4 0.7 David Y Ma * — * * Chris Zhimin Feng (5) 9,357,650 — 1.6 0.0 Terry Feng Zhao * — * * Yanjun Wang * — * * David Jingye Chen (6) 11,864,075 — 2.1 0.7 All directors and executive officers as a group (7) 213,444,147 45,527,793 41.7 71.3 Principal Shareholders: Tencent entities (8) 104,264,743 — 18.2 0.0 Blue Dolphins Venture Inc (9) — 45,527,793 7.9 56.4 Baillie Gifford & Co (10) 34,183,394 — 6.0 2.8 * Less than 1% of our total outstanding shares on an as converted basis. † For each person and group included in this column, percentage ownership is calculated by dividing the number of shares beneficially owned by such person or group, including shares that such person or group has the right to acquire within 60 days after March 31, 2024, by the sum of Class A and Class B ordinary shares, and the number of shares that such person or group has the right to acquire beneficial ownership within 60 days after March 31, 2024. †† For each person and group included in this column, percentage of total voting power represents voting power based on both Class A and Class B ordinary shares beneficially owned by such person or group with respect to all outstanding Class A and Class B ordinary shares as one single class.
City Jet Limited’s shareholders are Joyce M. Kuok Foundation and Zheng Ge Ru Foundation. As Mr. Kuok is a governor of these two foundations, he may be deemed to have or share investment power which includes the power to dispose, or to direct the disposition of, the shares beneficially owned by City Jet Limited and these two foundations.
Kuok is a governor of these two foundations, he may be deemed to have or share investment power which includes the power to dispose, or to direct the disposition of, the shares beneficially owned by City Jet Limited and these two foundations. Always Best International Limited is an investment company of a discretionary trust in which Mr.
Currently, the maximum aggregate number of ordinary shares which may be issued pursuant to all awards under the 2009 Plan is 193,718,406. The awards expire 10 years after the date of the grant.
Currently, the maximum aggregate number of ordinary shares which may be issued pursuant to all awards under the 2009 Plan is 210,888,606.
Ye, and (ii) 5,650,000 Class A ordinary shares issuable upon exercise of options held by Mr. Ye within 60 days of March 15, 2023.
Ye, and (ii) 6,650,000 Class A ordinary shares issuable upon exercise of options held by Mr. Ye within 60 days of March 31, 2024 and 2,834 Class A Ordinary Shares issuable upon vesting of restricted share units within 60 days from March 31, 2024 .
Li within 60 days of March 15, 2023, and (iv) an aggregate of 44,572,018 Class A ordinary shares over which Mr. Li has received irrevocable voting proxies from the respective owners of such shares (namely, certain directors and employees, certain affiliates of our employees, Garena ESOP Program (PTC) Limited and a family member of Mr.
Li has received irrevocable voting proxies from the respective owners of such shares (including certain directors and employees, certain affiliates of our employees, Garena ESOP Program (PTC) Limited and a family member of Mr.
(5) Represents (i) 650,000 Class A ordinary shares held or beneficially owned by Mr. Feng, and (ii) 6,800,000 Class A ordinary shares issuable upon exercise of options held by Mr. Feng within 60 days of March 15, 2023.
(5) Represents (i) 354,816 Class A ordinary shares held or beneficially owned by Mr. Feng, and (ii) 9,000,000 Class A ordinary shares issuable upon exercise of options held by Mr. Feng within 60 days of March 31, 2024 and 2,834 Class A Ordinary Shares issuable upon vesting of restricted share units within 60 days from March 31, 2024 .
Board Practice Our board of directors consists of five directors. A director is not required to hold any shares in our company to qualify to serve as a director.
Li between April 2019 and April 2020 and to vest between April 2020 and April 2022. 118 Table of Contents C. Board Practice Our board of directors consists of six directors. A director is not required to hold any shares in our company to qualify to serve as a director.
Previously he served as a partner at Hillhouse Capital, and worked at Bain Capital and Boston Consulting Group. David holds a bachelor’s degree in Economics, Finance, and Management from the Wharton School of the University of Pennsylvania. Employment Agreements and Indemnification Agreements We have entered into employment agreements with our executive officers.
Previously he served as a partner at Hillhouse Capital, and worked at Bain Capital and Boston Consulting Group. David holds a bachelor’s degree in Economics, Finance, and Management from the Wharton School of the University of Pennsylvania. Chris Zhimin Feng joined our company in March 2014 and has served as President since January 2022.
Chen, and (ii) 3,422,140 Class A ordinary shares issuable upon exercise of options held by Mr. Chen within 60 days of March 15, 2023.
Chen, and (ii) 3,020,000 Class A ordinary shares issuable upon exercise of options held by Mr. Chen within 60 days of March 31, 2024 and 2,834 Class A Ordinary Shares issuable upon vesting of restricted share units within 60 days from March 31, 2024 .
Li), including 24,944,868 Class A ordinary shares issuable upon exercise of options within 60 days of March 15, 2023 and 710,780 Class A ordinary shares issuable upon vesting of restricted share units within 60 days of March 15, 2023. 118 Table of Contents (3) Represents (i) 29,968,937 Class A ordinary shares held or beneficially owned by Mr.
Li), including 27,997,705 Class A ordinary shares issuable upon exercise of options within 60 days of March 31, 2024 and 1,224,424 Class A ordinary shares issuable upon vesting of restricted share units within 60 days of March 31, 2024. (3) Represents (i) 27,434,564 Class A ordinary shares held or beneficially owned by Mr.
Bright Magic Investments Limited, Crystal White Limited, Fexos Limited, Macromind Investments Limited, and Velmar Company Limited are all wholly-owned subsidiaries of Kerry Group Limited. Mr. Kuok is a director of Kerry Group Limited and has indirect minority interests in these entities. Mr. Kuok may be deemed to have beneficial interests in the shares beneficially owned by these entities.
Kuok is a director of Kerry Group Limited and has indirect minority interests in these entities. Mr. Kuok may be deemed to have beneficial interests in the shares beneficially owned by these entities. City Jet Limited’s shareholders are Joyce M. Kuok Foundation and Zheng Ge Ru Foundation. As Mr.
To the extent set forth in the 2009 Plan and where required by the applicable laws, rules or regulations, any amendments to the 2009 Plan shall be subject to shareholders’ approval. Transfer Restrictions. All awards are non-transferable and will not be subject in any manner to sale, transfer, anticipation, alienation, assignment, pledge, encumbrance or charge except in certain situations.
To the extent set forth in the 2009 Plan and where required by the applicable laws, rules or regulations, any amendments to the 2009 Plan shall be subject to shareholders’ approval. 117 Table of Contents Transfer Restrictions.
Each of our executive officers is employed for a continuous term unless either we or the executive officer gives prior notice to terminate such employment.
David holds a bachelor’s degree in Computer Engineering with first class honors from the National University of Singapore. Employment Agreements and Indemnification Agreements We have entered into employment agreements with our executive officers. Each of our executive officers is employed for a continuous term unless either we or the executive officer gives prior notice to terminate such employment.
Share Ownership The following table sets forth information concerning the beneficial ownership of our ordinary shares as of March 15, 2023: • each of our directors and executive officers; and • each person known to us to beneficially own more than 5% of our ordinary shares. 117 Table of Contents The calculations in the table below are based on 566,758,842 ordinary shares issued and outstanding as of March 15, 2023, comprising 521,231,049 Class A ordinary shares and 45,527,793 Class B ordinary shares.
Share Ownership The following table sets forth information concerning the beneficial ownership of our ordinary shares as of March 31, 2024: • each of our directors and executive officers; and • each person known to us to beneficially own more than 5% of our ordinary shares.
Kuok Foundation, a Hong Kong company, (viii) 104,616 Class A ordinary shares beneficially owned by Zheng Ge Ru Foundation, a Hong Kong company, (ix) 188,725 Class A ordinary shares held by Peacebright Assets Limited, a British Virgin Islands company, and (x) 322,000 shares held by Always Best International Limited, a Hong Kong company.
Kuok Foundation, a Hong Kong company, (vi) 104,616 Class A ordinary shares beneficially owned by Zheng Ge Ru Foundation, a Hong Kong company, and (vii) 322,000 shares held by Always Best International Limited, a Hong Kong company. Bright Magic Investments Limited, Fexos Limited, and Macromind Investments Limited are all wholly-owned subsidiaries of Kerry Group Limited. Mr.
The address of Capital Research is 333 South Hope Street, 55th Fl, Los Angeles, CA 90071, U.S.A. Our ADSs are traded on the New York Stock Exchange and brokers or other nominees may hold ADSs in “street name” for customers who are the beneficial owners of our ADSs.
The address of Baillie Gifford is Calton Square 1 Greenside Row Edinburgh EH1 3AN, Scotland, United Kingdom. Our ADSs are traded on the New York Stock Exchange and brokers or other nominees may hold ADSs in “street name” for customers who are the beneficial owners of our ADSs.
David holds a bachelor’s degree in Computer Engineering with first class honors from the National University of Singapore. David Y Ma joined our company in March 2021 and serves as the Chief Investment Officer of Sea Capital. Before joining our company, he was the founder and Managing Partner of Composite Capital, a global investment management firm.
Khoon Hua holds a B.A. degree in Economics from Harvard University. 114 Table of Contents David Y Ma has served as our director since May 2023. He previously worked at Sea as the Chief Investment Officer of Sea Capital from March 2021 to April 2023. He was the founder and Managing Partner of Composite Capital, a global investment management firm.
(10) Based on a Schedule 13G filed with the SEC on February 13, 2023 by Capital Research Global Investors (“Capital Research”), Capital Research reported sole voting power over 40,810,964 ADSs, each representing one Class A ordinary share, and sole dispositive power over 40,850,962 ADSs.
(10) Based on a Schedule 13G filed with the SEC on January 26, 2024 by Baillie Gifford & Co (“Baillie Gifford”), Baillie Gifford reported sole voting power over 22,321,284 ADSs, each representing one Class A ordinary share, and sole dispositive power over 34,183,394 ADSs.
(4) Includes (i) 1,061,950 Class A ordinary shares held or beneficially owned by Bright Magic Investments Limited, a British Virgin Islands company, (ii) 1,171,873 Class A ordinary shares beneficially owned by Crystal White Limited, a Hong Kong company, (iii) 2,926,071 Class A ordinary shares held by Fexos Limited, a British Virgin Islands company, (iv) 5,048,233 Class A ordinary shares beneficially owned by Velmar Company Limited, a Hong Kong company, (v) 3,696,695 Class A ordinary shares beneficially owned by Macromind Investments Limited, a British Virgin Islands company, including 1,363,945 Class A ordinary shares underlying US$27 million principal amount of our 2023 convertible notes and 1,994,750 Class A ordinary shares underlying US$100 million principal amount of our 2024 convertible notes, both of which are currently convertible, (vi) 1,955,184 Class A ordinary shares held by City Jet Limited, a British Virgin Islands company, (vii) 104,616 Class A ordinary shares beneficially owned by Joyce M.
Ye. 122 Table of Contents (4) Includes (i) 200,000 Class A ordinary shares held or beneficially owned by Bright Magic Investments Limited, a British Virgin Islands company, (ii) 2,926,071 Class A ordinary shares held by Fexos Limited, a British Virgin Islands company, (iii) 1,701,945 Class A ordinary shares beneficially owned by Macromind Investments Limited, a British Virgin Islands company (iv) 705,184 Class A ordinary shares held by City Jet Limited, a British Virgin Islands company, (v) 104,616 Class A ordinary shares beneficially owned by Joyce M.
Khoon Hua holds a B.A. degree in Economics from Harvard University. Chris Zhimin Feng joined our company in March 2014 and has served as Group President since January 2022. Prior to this role, he served as the chief executive officer of Shopee from July 2015, and as the chief executive officer of SeaMoney from March 2020.
Prior to this role, he served as the chief executive officer of Shopee from July 2015, and as the chief executive officer of SeaMoney from March 2020. Previously he served as our head of mobile business.
As of March 15, 2023, outstanding awards granted under the 2009 Plan consisted of (i) options to purchase 69,873,363 Class A ordinary shares, (ii) 11,827,347 restricted Class A ordinary share units, and (iii) 211,701 share appreciation rights. The following paragraphs summarize the terms of the 2009 Plan. Plan Administration .
The awards expire 10 years after the date of the grant. 116 Table of Contents As of March 31, 2024, outstanding awards granted under the 2009 Plan consisted of (i) options to purchase 59,598,234 Class A ordinary shares, (ii) 16,005,794 restricted Class A ordinary share units, and (iii) 267,574 share appreciation rights.
On April 17, 2022, the board of directors of the company canceled the May 2019 Authorization and, in substitution of the May 2019 Authorization, awarded the executive officers of the company options to purchase up to a total of 30 million Class A ordinary shares at US$120 per share, including options to purchase five million Class A ordinary shares to Forrest.
In 2023, the board of directors of the company approved the cancellation of unvested options to purchase 3.75 million Class A ordinary shares to certain executive officers from the aforesaid April 2022 awards and substituted with 1.25 million restricted share units to the affected executive officers.
Removed
We have entered into indemnification agreements with our directors and executive officers, pursuant to which we will agree to indemnify our directors and executive officers against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being such a director or executive officer. B.
Added
An executive officer may terminate his or her employment at any time with a three- to six-month prior written notice.
Removed
Li between April 2019 and April 2020 and to vest between April 2020 and April 2022. 114 Table of Contents As previously disclosed in our annual reports on Form 20-F for the years ended December 31, 2019 to 2021, in May 2019, the board of directors of the company generally authorized grants to Forrest and certain other employees of options to purchase 20 million and 30 million Class A ordinary shares of the company, respectively, at US$22.50 per share, with the actual grants of such awards conditioned on the availability of such shares under our 2009 Plan (the “May 2019 Authorization”).
Added
Such restricted share units were to vest over the remaining vesting period of the cancelled options, subject to the same vesting terms and conditions. The substitution did not have any financial impact on our share-based compensation expenses.
Removed
The awards, when granted, were to have a four-year vesting period commencing no earlier than January 1, 2022. These awards have not been granted.
Added
In addition, a total of 47,016 restricted shares units were granted to our directors and executive officers in 2023, among which 37,016 restricted share units had fully vested within the year of 2023 and therefore do not show in the table below regarding the outstanding awards to our directors and executive officers as of December 31, 2023.
Removed
The options will vest every three months over a period of five years commencing April 30, 2022 and will expire 10 years after the grant date. These awards have been granted to the executive officers in April 2022. Accordingly, no grants may be made pursuant to the May 2019 Authorization. C.
Added
All awards are non-transferable and will not be subject in any manner to sale, transfer, anticipation, alienation, assignment, pledge, encumbrance or charge except in certain situations. Power of Attorney on Voting .
Removed
Terms of Directors and Executive Officers Each of our directors holds office until the expiration of his or her term, as may be provided in a written agreement with our company, and his or her successor has been elected and qualified, until his or her resignation or until his or her office is otherwise vacated in accordance with our articles of association.
Added
The calculations in the table below are based on 574,340,007 ordinary shares issued and outstanding as of March 31, 2024, comprising 528,812,214 Class A ordinary shares and 45,527,793 Class B ordinary shares. Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
Removed
Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
Added
Li within 60 days of March 31, 2024 and 2,834 Class A Ordinary Shares issuable upon vesting of restricted share units within 60 days from March 31, 2024 , and (iv) an aggregate of 49,717,733 Class A ordinary shares over which Mr.
Removed
These shares, however, are not included in the computation of the percentage ownership of any other person.
Added
The total number of Class A ordinary shares beneficially owned by all directors and executive officers as a group and the voting power of all directors and executive officers as a group have included the shares subject to such proxy.
Removed
Peacebright Assets Limited is an investment company of a discretionary trust in which Mr. Kuok is one of the discretionary beneficiaries. Always Best International Limited is an investment company of a discretionary trust in which Mr. Kuok is one of the discretionary beneficiaries. Mr.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

2 edited+1 added−2 removed0 unchanged
Biggest changeITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS A. Major Shareholders See “Item 6. Directors, Senior Management and Employees—E. Share Ownership.” 120 Table of Contents B. Related Party Transactions Contractual Arrangements with Our VIEs, Their Shareholders and Us See “Item 4. Information on the Company—C.
Biggest changeFinancial Statements.” Contractual Arrangements with Our VIEs, Their Shareholders and Us See “Item 4. Information on the Company—C. Organizational Structure—Contractual Arrangements among Our VIEs, Their Shareholders and Us.” 124 Table of Contents Share Incentive Plan See “Item 6. Directors, Senior Management and Employees—B. Compensation—Share Incentive Plan.” Employment Agreements and Indemnification Agreements See “Item 6. Directors, Senior Management and Employees—A.
Compensation—Share Incentive Plan.” Employment Agreements and Indemnification Agreements See “Item 6. Directors, Senior Management and Employees—A. Directors and Senior Management—Employment Agreements and Indemnification Agreements.” C. Interest of Experts and Counsel Not applicable.
Directors and Senior Management—Employment Agreements and Indemnification Agreements.” C. Interest of Experts and Counsel Not applicable.
Removed
Organizational Structure—Contractual Arrangements among Our VIEs, Their Shareholders and Us.” Transactions with Certain Shareholder On September 5, 2022, Yuxin Ren, the director who is an executive officer of Tencent, resigned from our board of directors, and Tencent granted an irrevocable voting proxy with respect to all its shares in our company to our board of directors to vote on matters that are subject to the vote of shareholders of Sea.
Added
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS A. Major Shareholders See “Item 6. Directors, Senior Management and Employees—E. Share Ownership.” B. Related Party Transactions In October 2023, we deconsolidated a subsidiary. For further information, refer to Note 20 – Related Party Transactions in the accompanying notes to consolidated financial statements included in “Item 17.
Removed
In relation to such changes, we no longer treat Tencent as our related party since September 2022. From January 2022 to the date Tencent ceased to be a related party, we paid Tencent US$109.4 million in royalties and license fees as well as for other miscellaneous services. Share Incentive Plan See “Item 6. Directors, Senior Management and Employees—B.

Other SE 10-K year-over-year comparisons