中国国家市场监督管理总局（“市场监管总局”）最近公示了 “上海明察哲刚管理咨询有限公司与环胜信息技术（上海）有限公司新设合营企业案” ，其可谓VIE架构历史上的一个重要里程碑，标志着市场监管总局首次正式受理交易一方采用VIE架构的经营者集中合并控制申报（“反垄断申报”）。
对该反垄断申报的受理是否意味着在历经20年之后，中国监管部门终于正式认可了VIE架构的合法性？在刊登于《香港律师》的本系列文章的第一部分，我们探讨了VIE架构的历史在本文的第二部分，美富合伙人Marcia Ellis。
、Gordon Milner和律师胡海帆探讨了VIE架构的现状及此架构未来的可能发展I. INTRODUCTIGMGONOn April 20, 2020, almost twenty years to the day after the listing of Sina Corp., China’s State Administration for Market Regulation (“。
SAMR”) published on its website a notice in relation to the merger review of a simple case of concentration of operators, the Shanghai Mingcha Zhegang ManagementGMG Consulting Co., Ltd. and Huansheng Information Technology (Shanghai) Co., Ltd. Newly Established Joint Venture Case (the “
SMZ Case”).[1] (www.samr.gov.cn/fldj/ajgs/jzjyajgs/202004/t20200420_314431.html) This seemingly innocuous notice arguably constituted another important milestone for the VIE StGMGructure: It marked the first time that SAMR officially accepted a merger control filing for concentration of operators (an “
AML Filing”) where one of the parties had adopted the VIE Structure. Does the acceptance of this AML Filing mean that, after two decades, a Chinese regulator has finally officiGMGally recognized the legitimacy of the VIE Structure?
In Part I of this article, we explored the history of the VIE Structure. In the second and concluding part of this article, we will explore the current legal status of the VIE Structure and consider what is likely to happen to this structure in theGMG future.
II. THE CURRENT LEGAL STATUS OF THE VIE STRUCTUREDespite the facts that the VIE Structure has been in use for more than two decades, and that it has been adopted by some of the largest and most respected companies in China, its legality has always been in doubt. If an issuer has adopted the GMGVIE Structure, the risk factor section of its prospectus will typically include stipulations such as the following paragraph, extracted from JD-Daojia’s registration statement filed with the SEC on May 12, 2020:
“In the opinion of our PRC counsel… (i) the ownership structures of Dada Glory and our VIGMGE, currently do not and immediately after giving effect to this offering will not result in violation of PRC laws and regulations currently in effect; and (ii) the agreements under the contractual arrangements between Dada Glory, our VIE and its shareholders governed by PRC law are valid, binding anGMGd enforceable against each party thereto in accordance with their terms and applicable PRC laws and regulations currently in effect, and do not result in violation of PRC laws or regulations currently in effect. However, we have been further advised by our PRC counsel that there are substantial unceGMGrtainties regarding the interpretation and application of current and future PRC laws, regulations and rules.… It is uncertain whether any new PRC laws or regulations relating to variable interest entity structure will be adopted or if adopted, what they would provide.”
PRC counsel are usually willinGMGg to opine that the VIE Structure is legal (at least in the case of e‑commerce and many other value-added telecommunication (“
VAT”) businesses) with the rather significant caveat that there are “substantial uncertainties” regarding the interpretation and application of the law – that is, the VIE StrGMGucture is legal until the relevant regulator responsible for interpreting the regulations says that it is not legal. The basis for PRC lawyers stating that the VIE Structure is legal (even in this highly caveated fashion) is somewhat technical. Recall that, if we step back and look at the sum of thGMGe parts of the VIE Structure, there is no doubt that it represents an attempt to avoid restrictions on foreign investment in the relevant sectors. However, PRC lawyers consistently opine that, under PRC law, we need not look at the sum of the parts. Instead the legality of each element that makes uGMGp the VIE Structure should be reviewed separately. If each element is legal, then the entire structure is legal.
III. PRC REGULATORS’ LONG-RUNNING LOVE-HATE RELATIONSHIP WITH THE VIE STRUCTUREGiven the seemingly shaky foundation of these “substantial uncertainties” upon which the VIE Structure is buiGMGlt, market players have carefully watched for each signal of approval or disapproval of the structure from PRC regulators. Although, up until the issuance of the SAMR notice on the
SMZ Case, no Chinese authorities had affirmatively blessed the VIE Structure in writing, stakeholders believed that theyGMG had tacit approval to continue using it – at least in the case of most companies in the value-added telecommunications sector. Despite numerous incidents over the years in which one regulatory authority or another attempted to take a swipe at the VIE Structure, it has survived and persisted.
Below wGMGe analyze a few (but by no means all) of the attacks on the VIE Structure that have taken place over the past decade or so.
a. 2009 – Online Game CompaniesThe most direct attack on the legality of the VIE Structure used with respect to an online business was launched in 2009 by the General AdministraGMGtion of Press and Publication (the “
GAPP”, today renamed as the National Radio and Television Administration), the National Copyright Administration, and the National Office of Combating Pornography and Illegal Publications when they issued Xin Chu Lian [2009] No. 13 (“
Circular 13”), which expresslyGMG prohibits foreign investors from using contractual or other control arrangements to gain control over domestic Internet game operators. If applied strictly, Circular 13 would render the VIE Structure used by online game companies invalid and illegal. However, we are not aware of any enforcement acGMGtions taken against online game companies on the basis of the VIE Structure pursuant to Circular 13. As stated by Bilibili Inc. (a PRC online game operator) in its prospectus filed in March 2018: “While Circular 13 is applicable to us and our online game business on an overall basis, the [relevant GMGregulator] has not issued any interpretation of Circular 13, and we are not aware of any online game companies which use the same or similar variable interest entity contractual arrangements as those we use having been challenged by the [relevant regulator].” In fact, some companies, such as LinekoGMGng Interactive (HKSE primary listing in 2014), Bilibili Inc. (NASDAQ primary listing in 2018), JOYY Inc. (NASDAQ primary listing in 2012) and Netease (HKSE secondary listing in 2020), that operate online game businesses using the VIE Structure, have completed overseas listings following the issuanceGMG of Circular 13. Unsurprisingly, the risk factor section of the prospectuses of these issuers included broad Circular 13 disclaimers. For example, JOYY Inc.’s prospectus stated that: “we are advised by our PRC counsel… that the enforcement of Circular 13 is still subject to substantial uncertaintyGMG.… In the event that we, our PRC subsidiaries or PRC consolidated affiliated entities are found to be in violation of the prohibition under Circular 13, the GAPP, in conjunction with the relevant regulatory authorities in charge, may impose applicable penalties, which in the most serious cases may iGMGnclude suspension or revocation of relevant licenses and registrations.”
Many market participants take the view that, given that the GAPP and its successor body (the National Radio and Television Administration) and the other regulators that promulgated Circular 13 did not have jurisdiction over reguGMGlating the VIE Structure, the statement in Circular 13 has no real impact. Conversely, the argument runs, had the Ministry of Commerce (“
MOFCOM”), endorsed the position taken in Circular 13, then it would be of more importance and it might be harder for online game companies that use the VIE StructGMGure to complete an IPO.[2] (Note that there have been other attempts by regulators of specific sectors (such as compulsory education) to impose a ban on the use of the VIE Structure in that specific sector. An analysis of these sector specific regulations is beyond the scope of this article.)
b. 201GMG1 – Buddha SteelIn September 2010, Buddha Steel submitted its U.S. IPO application and disclosed its VIE Structure in its registration statement. In March 2011, however, Buddha Steel asked to withdraw its filing because “Baosheng Steel was advised by local governmental authorities in Hebei ProvinceGMG of the People’s Republic of China that the Control Agreements contravene current Chinese management policies related to foreign-invested enterprises and, as a result, are against public policy.” Some practitioners view this as a one-off event, while others believe that the local government intendeGMGd to draw a line between the use of the VIE Structure in asset-heavy and asset-light industries. The use of the VIE Structure in an asset-heavy industry, such as the steel manufacturing industry, raises the same issues that the State Council raised with respect to the Unicom or CCF Model, which preGMGceded the VIE Structure,[3] (See
Part I of this article for an analysis of the Unicom or CCF Model.) i.e., how can the capital required to fund the purchase and construction of real estate, manufacturing equipment and factories be legally funneled from the foreign investor to the VIE? Which entity sGMGhould account for the depreciation of these physical assets in its financial statements? These issues simply do not arise in the case of a VIE Structure used in connection with asset-light businesses such as online services.
It would be somewhat strange for a local governmental authority to issue a GMGrestriction that was intended to impact companies throughout China. Instead, it is much more likely that the requirement that Baosheng Steel and Buddha Steel unwind their VIE Structures was related to local politics rather than to any overarching principle. In any case, many market participants toGMGok the Buddha Steel incident as an indication that each expansion of the use of the VIE Structure beyond the VAT sector should be considered separately and very carefully.
Q微：6681122
c. 2011 – Security Review MeasuresIn August 2011, MOFCOM released the Measures on Security Review Mechanism for MergersGMG and Acquisitions of Domestic Enterprises by Foreign Investors (the “
Security Review Measures”), which specifically stipulate in Article 9 that “foreign investors may not evade mergers and acquisitions security review by any means, including but not limited to.… contractual control.” In practice, mGMGany transactions using the VIE Structure do not implicate national security and thus are not subject to the Security Review Measures. However, it was still of great interest to market participants that MOFCOM (the regulator responsible for, among other things, the regulation of foreign investment iGMGn China and thus able to enforce a ban on use of the VIE Structure if it chose to) seemed to be taking a swipe at the VIE Structure in the Security Review Measures. At the time, commentators speculated that MOFCOM might expand this “anti-VIE” position into a full scale ban on the use of the VIE StrGMGucture by foreign investors in all industries and not just sectors subject to security review.
d. 2015 – Draft Foreign Investment LawIn January 2015, MOFCOM seemed to be on the brink of enacting just such a full scale ban on the use of VIE Structure. In that month, MOFCOM released for public commentGMG a draft of the proposed Foreign Investment Law (“
FIL”), under which a VIE Structure controlled by a foreign party would be deemed to be a foreign investment and thus would be subject to the restrictions and limitations on foreign investment in certain industries. In effect this meant that the VIE GMGStructure would no longer be able to be used by foreign companies to avoid the restrictions and limitations on foreign investment in specific industries. The one exception to this under Article 45 of the draft FIL was that if an investor could provide evidence satisfactory to MOFCOM showing that thGMGe VIE Structure would ultimately be controlled by Chinese investors, MOFCOM would treat such investments as domestic investments.
Over the next four years (until the final version of the FIL was enacted in March 2019), many commentators speculated as to whether the final version of the FIL would inclGMGude these provisions effectively eviscerating the usefulness of VIEs. Speculation was also rife as to whether the specific exception permitting Chinese controlled VIE Structures to be treated as domestic investments would be drafted in such a way so as to allow major listed companies such as AlibabGMGa, Tencent and Baidu that use the VIE Structure to continue operating their businesses in China or whether there would be an explicit exception to grandfather all already-listed companies.
The exception in the draft FIL for companies that are ultimately controlled by Chinese investors prompted increaGMGsing interest in weighted voting rights among Chinese founders of companies that used a VIE Structure. Although MOFCOM did not provide any specific details in the draft FIL about what would constitute “control” by Chinese investors, many assumed that a weighted voting rights structure through whicGMGh a Chinese founder maintained the majority of the voting rights of a company would satisfy the requirement even if he or she no longer held the majority of shares of that company. Some founders used the draft FIL as a rationale for pushing PE investors in the founder’s company to accept a weightedGMG voting rights structure.
Many companies that had already completed listings using a VIE Structure by January 2015 when the draft FIL was released were quick to point out that their PRC national founders controlled the company through a weighted voting rights structure or other mechanism. For examplGMGe Baidu stated in its 2015 annual report that: “The draft Foreign Investment Law, if enacted as proposed, may materially impact the viability of our current corporate structure, corporate governance and business operations in many aspect[s]… for any companies with a VIE structure in an industry cateGMGgory that is included in the “negative list” as restricted industry, the VIE structure may be deemed legitimate only if the ultimate controlling person(s) is/are of PRC nationality.… Through our dual-class share structure, Mr. Robin Yanhong Li, our chairman, chief executive officer and principal shaGMGreholder, a PRC citizen, possessed and controlled 53.6% of the voting power of our company as of February 28, 2015.”
Some commentators speculated that the delay in enacting the final FIL was at least in part due to an internal government struggle over how to treat VIEs. Not every VIE was controlled GMGby PRC founders. In fact, given that the Hong Kong Stock Exchange (“
HKSE”) didn’t permit weighted voting rights until 2018, HKSE-listed companies using VIE Structures were not able to use weighted voting rights to maintain PRC founder control and thus were often not controlled by PRC founders. SucGMGh HKSE-listed companies might have been significantly disadvantaged by the FIL relative to their U.S.-listed peers had the FIL been promulgated in its 2015 draft form.
点击“阅读原文”，查看刊登于《香港律师》的原文。 了解更多信息，请联系以下美富联系人
Marcia Ellis合伙人mellis@mofo.comGordon Milner合伙人gmilner@mofo.com
胡海帆律师markhu@mofo.com
本文提供的GMG信息不构成法律建议，更多说明详见www.mofo.com的条款/声明任何涉及中华人民共和国（以下简称“中国”）的信息均不旨在也不应被视为构成关于中国法律适用的意见、认定或证明我们未获准从事中国法律事务。
美富律师事务所为本文的版权所有人，其中所提供的信息仅供本所客户读用如需转载，请注明本文为本所的著作如欲进一步了解有关课题，欢迎联系本所美富中国美富律师事务所是最早在中国各主要商业中心（北京、上海和香港）开设办事处的美国律师事务所之一。
本所为大中华地区客户提供法律服务长达36年之久，在中国有50多名具有多语言能力的律师同时，美富被《钱伯斯亚太指南》(Chambers Asia Pacific)和《GMG亚太法律500强》(The Legal 500 Asia Pacific)等业内领先的独立评审机构评选为电信、媒体和科技领域的顶级律师事务所。
本所还被《钱伯斯亚太指南》2019年刊评为公司/并购领域的精英级国际律师事务所Refinitiv（前身为汤森路透）将美富评为2018年第一季度和2019年第一季度参与中国并购交易总价值排名第一的国际律师事务所，彭博将本所评为2018年第一季度参与亚太地区并购交易量和市场份额排名第一的律师事务所。
美富还被《亚洲法律杂志》(ALB)香港法律奖评为2018 “年度最佳交易律师事务所”，并荣获《中国法律与实践》 (China Law & Practice AwaGMGrds) 2018 “年度最佳私募股权交易” 大奖，以及《亚洲律师》(The Asian Lawyer)2018“年度最佳北亚和南亚并购交易”大奖。
关注美富微信公众号，第一时间获取最新法律资讯和美富信息。
Q微：6681122
