Listing a Chinese business in the US

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Firm Involved

  • Alibaba

Year of the event


Description of the case

Alibaba wanted to be listed on the Hong Kong Stock Exchange but couldn’t due to the structure of the firm. Only Chinese citizen can own businesses operating in specific sectors. Alibaba set up[1] a structure with VIEs (Variable Interest Entities) owning the licenses, and contractually related to WFOEs (Wholly Foreign Owned Enterprises), themselves owned by a holding in Cayman Island, the stock of which is listed. Founders Jack Ma and Simon Xie own the VIEs and are contractually linked to the WFOE to lead the business. Hence the final shareholder does not have any say on the CEO’s doings.


  • Strict regulations lead to complex montages. Beware foreign entities listed on large western markets.


  1. [ Business Cycles (FR), Alibaba : Que se cache-t-il derrière la plus grosse introduction boursière ? ]