Authored by: Huang Ling , Hu Jing , Wang Xinghua (Owen) , Xu Jiaxing (Jason) , Liu Ning and Fang Wei
Over the past three decades, the red chip structure has provided a critical pathway for Chinese domestic enterprises, particularly those subject to policy constraints, to access global capital markets. Central to this approach is the establishment of an offshore holding company, often in the Cayman Islands or other jurisdictions, as the listing entity. This entity then connects the economic interests of domestic operating companies to international capital through multi-layered overseas entities, by way of equity control or variable interest entity (“VIE”) arrangements.