VIE is a variable interest entity or "VIE structure". Its essence is a way for domestic entities to achieve overseas listing.

After the establishment of the split VIE, there will be a large number of related transactions between the domestic company and the WFOE to realize the investment funds entering the domestic company and the income to be transferred to the WFOE, which may generate more tax burdens. Design the transactions well and set up tax avoidance reasonably.

measure.

The key to the VIE structure is to control domestic licensed companies through multiple agreements under the VIE agreement rather than through ownership of equity.

Through the VIE agreement signed between the technology company and the domestic license company, the listed company obtains control and management rights over the domestic license company, thereby achieving the consolidation of financial statements. These features are very important for any company that intends to be listed in the international market in the future and for cross-border companies.

Optimizing the tax structure of cross-border transactions is crucial.

Insufficient extended information on VIE: (1) The VIE structure is still in a "grey" area under Chinese legal regulations. Although there are tentative cases, the Chinese courts have not yet affirmed the legality of the control agreement; (2) The Chinese government's relevant

The department’s attitude towards the VIE structure is still unclear, with voices coexisting to retain, restrict and ban the VIE structure; (3) Most current versions of control agreements have implementation flaws under Chinese law; (4) Foreign investors apply to Chinese courts

It is unlikely to enforce effective judgments of foreign courts; (5) It is unlikely and feasible for foreign investors to file lawsuits against breach of control agreements in Chinese courts; (6) From an accounting perspective, China’s legal norms

Technology companies have set many restrictions on the repatriation of profits, dividends or bonuses to offshore companies directly or indirectly, which has caused practical difficulties for the consolidation of companies under the VIE structure.