Research On The VIE Mode Of Chinese Companies Overseas Listing

The VIE mode refers to the foreign-invested enterprises entered into a series of contracts with the operation corporations in China to control the decision body of operation corporations and transfer the profit produced by the operation corporations to avoid the relevant laws and regulations on foreign investment. The core of the VIE model is the one enterprise controls the other through agreement instead of equity. In China, The SIN A group used the VIE mode to abroad list firstly in NASDAQ in2000,Then this mode copied by a great number of internet companies.The VIE mode initially entry in the foreign investment limit and gradually extend to apply to circumvent the provisions applicable to related transactions TEN approval of the text. In fact, there are some contradictions between the VIE mode and the existing regulatory laws, Its legitimacy is questionable, because of the uncertainty of the legal status, there are some risks in regulatory and contractual aspects.Firstly, this paper describes the VIE mode, introduces the way the framework agreement and some important agreements. The next part analyzes the causes of the VIE mode, From the restrictions of industrial regulatory policy aspects and specific and practical needs of domestic enterprises overseas listing. The third part analyzes the legality of the VIE mode from the perspective of jurisprudence and three law branches,and accordingly regulates legal concept of the VIE mode and further argues the conflict with supervision and analyzes the contradictions reasons, explains the exist rationality of the VIE mode. The last part of the VIE mode to explore the legality of the agreement and propose appropriate regulatory recommendations based on the risks.