The Big VIE Question

Should we unravel our variable interest entity (VIE) structure and seek a listing on the A-share market?

This is a question that is being asked frequently by the entrepreneurs behind many Chinese start-ups preparing to list overseas who I have talked to recently.

For those who do not know what a VIE is, here is a brief introduction. The structure is used by Chinese companies to circumvent China's regulatory restrictions on foreign share ownership in certain industries so they can go public overseas. Almost all Chinese Internet firms listed on foreign stock exchanges have been able to do so only by using the VIE approach.