Science and technology innovation board has rich listing standards, allowing VIE to be listed. Recently, Xiaomi Ecological Chain No.9 Co., Ltd. (No.9 Company) successfully listed on the Science and Technology Innovation Board of Shanghai Stock Exchange, becoming the "VIE+CDR First Share" among domestic listed enterprises. So do you know what the listing of VIE means?

What do you mean by listing VIE?

VIE, whose full name is variable interest, is translated as "variable interest entity", also called agreement control, which refers to controlling a company through an agreement without equity.

The VIE structure is formed in this way: the shareholders of a domestic company are established overseas, and then they sign an agreement with the domestic company to provide them with management, consulting and other services in order to obtain a "service fee", which is the profit generated by the domestic company. In this framework, overseas companies are listed entities, and overseas companies control the business and finance of domestic business entities through agreements, making business entities become variable interest entities of listed entities.

So what is the necessity of protocol control?

VIE structure has two advantages: one is the tax advantage, and VIE can successfully evade the current non-convertible foreign exchange control system. Second, it can help foreign investors effectively avoid government control and disputes, with the main purpose of avoiding the restrictions of domestic laws and regulations on the proportion of foreign investment in specific industries and maximizing financing.