Variable-interest entity 可变利益实体

Variable-interest entity 可变利益实体

A variable-interest entity, or VIE, is a complex corporate structure used by Chinese companies since 2000 to circumvent restrictions on foreign investment in the Internet industry. With a VIE structure, shareholders of a company’s stock listed outside China don’t actually own the Chinese company, but rather own shares in a holding company that has rights to all of the Chinese company’s profits and responsibility for all of its losses, as well as ownership of any assets not prohibited by investment restrictions. The structure is controversial, in part because the Chinese company remains owned by its founders or executives, who could break the profit-transfer agreements. If that happens, foreign investors would be stuck relying on Chinese courts to enforce the broken contracts.