Hi all,
I've noticed that many Chinese companies, are only accessible through holding companies in the Cayman Islands. This setup, called the VIE structure, helps them get around Chinese regulations on foreign ownership.
While it opens up investment opportunities, it also raises some concerns:
The legal standing of these VIEs is in my view shaky and could be voided by Chinese regulators and also, in a conflict, China might impose restrictions that could harm these offshore entities. What about a closure risk? My fear is that these companies could just shut down their Cayman Islands holdings, leaving us investors high and dry.
Do you guys see this as a major risk or am I overly concerned with this?
Would love to hear your thoughts!
Submitted July 23, 2024 at 01:19AM by aDogisnotaToaster https://ift.tt/wUVNZEK
