How legally sound are your investments in China?

Many foreigners have used variable-interest entities to invest in China, but some are now questioning if they will stand the test of time.
Michael Hickman, Simmons & Simmons
Michael Hickman, Simmons & Simmons

For years, the conventional wisdom has been that if you are a foreigner looking to invest in certain segments of China’s economy, a variable-interest entity (VIE) might be the best bet But after investors felt they were burnt by Alibaba’s restructuring, which effectively brought the profitable e-pay business back onshore, there are now more voices in opposition to the use of VIE structures Simmons & Simmons senior counsel Michael Hickman talks about the investment approach

Why have people used the VIE structure in the past
In China, the VIE structure can provide a framework to gain access to industries in which direct foreign investment is restricted or prohibited, and it has been used in...

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