ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon Print
Markets

Chinese offshore IPOs grow more reliant on shaky legal structure

Boom in tech listings built on companies that lack ownership of their operations

Chinese electric car producer Nio, which listed in New York in September, uses a “VIE” to operate in China.   © Reuters

HONG KONG -- Chinese companies listing their shares on offshore exchanges are increasingly relying on a precarious legal structure that lawyers previously believed had been rendered obsolete. 

The prospectus filed last week by Tencent Music Entertainment, China's largest music streaming service operator, for a billion-plus initial public offering in New York shows how what are known as "variable interest entities" are more alive than ever.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

Discover the all new Nikkei Asia app

  • Take your reading anywhere with offline reading functions
  • Never miss a story with breaking news alerts
  • Customize your reading experience

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more