China VIE structure

the creditor’s pitfall in dealing with VIE entities


VIE entities in China have been pervasive in many industries in  China, in particular, the telecom industry, advertising and some other asset-heavy industries like steel and mining. Below is a typical chart illustrating the VIE structure widely used in China.

Variable Interest Entity in China

In the chart, the VIE, generally a domestic entity holding necessary governmental license, is…