The variable interest entity (VIE Structure) has once again come to the spotlight following the release of the Draft of Foreign Investment Law (For Public Comment) by the Ministry of Commerce on its website on Jan 19, 2015.
In terms of tax policies, according to the Announcement on Several Issues about Corporate Income with respect to the Transfer of Indirect Properties Amongst Non-Residential Enterprises issued by the State Administration of Taxation on Feb 6, 2015, transactions whose aim is to indirectly transfer domestic properties by means of equity transfers of offshore companies, including through the VIE Structure, shall be subject to anti-tax evasion management. This will cause all red-chip enterprises and foreign shareholders to reevaluate the potential tax burdens associated with the indirect transfer of domestic assets in China.
To address developments in the above laws, Han Kun Law Offices and Deloitte held seminars on the VIE Structure at the Grand Hyatt Beijing on March 6, 2015, at the Grand Hyatt Shanghai on March 9, 2015 and at St. Regis Shenzhen on March 11, 2015. Attendees at these events discussed key issues relating to the VIE Structure and explored possible solutions.
Han Kun attorneys Mr. Charles Li, Mr. Cao Yinshi and Mr. Xue Bing spoke at the seminar.
Attendees included legal and financial officers from multiple internet companies and venture capital enterprises, including Baidu, Tencent, Sina, JD.com, Xiaomi, Xunlei, Lenovo, 58.com, Youku, CICC, CITIC Capital, Legend Capital, Qiming Ventures, Zhen Fund, TusPark Ventures, Gobi, etc. The seminars turned out to be a great success.
