Beijing plans to plug loopholes for overseas IPOs

It is tax havens like the Cayman Islands that Chinese companies use to disguise their true structures. There, they set up variable interest entity (VIE) companies in order to go public overseas. Alibaba, Baidu, Didi, Tencent – almost all major Chinese tech companies listed on US exchanges use this construct. The goal? To circumvent Beijing’s restrictions that make it difficult for foreign investors to invest in Chinese tech companies.

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