VIE structure

VIE Structure

The most mature structure of overseas listing.

HAVE YOU EVER FACED THE FOLLOWING PROBLEMS?

Need overseas financing in the industries
which foreign investment are restricted

There are security reviews of foreign mergers
and acquisitions in industries

Cannot be listed overseas because of the Restriction of Article 10

VIE STRUCTURE HELPS YOU

Bypass overseas financing restrictions

Cooperate with overseas strategic investors

List overseas

VIE is an abbreviation for Variable Interest Entity. A variable interest entity (VIE), as reported by the U.S. Financial Accounting Standards Board (FASB interpretation No. 46) is an entity that an investor has a controlling interest in, but this controlling interest is not based on a majority of voting rights. VIEs are subject to consolidation under certain conditions.

If a company would like to achieve the domestic equity to be listed overseas, the consolidated statement is the prerequisite for auditors to conduct financial audit.

As VIE is a fully foreign-owned enterprise that achieves actual control over the domestic operating entity by signing a series of agreements with the domestic operating entity and its shareholders, the following agreements are generally required to ensure the effectiveness of the structure; the exclusive technical support and advisory services agreement; loan agreements or other financial support agreements; equity pledge agreements; management agreements; equity agreements and so on.

VIE structure procedures:

  • Individual shareholders in China set up offshore holding company
  • Set up overseas listed entities by Offshore holding companies established by individual shareholders in China and other investors.
  • Overseas listed entities directly or indirectly set up wholly foreign-owned enterprises (WFOE) in China
  • The above-mentioned wholly foreign-owned enterprises and domestic operating entities sign a series of control agreements to achieve the actual control of domestic operating entities.

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