Monthly Archives: October 2012

VIE Structure Overview

Based on the cases we have done, I summarize here a short overview of VIE structure. Offshore Company It is the entity listed in US, HK or other places. WFOE It is 100% owned by the Offshore Company. Chinese Entity The entity has the ICP license or related licenses, which couldn’t be obtained by WFOE. But it is not owned by the WFOE through ownership. Agreements A VIE structure is that control is obtained through legal agreements rather than through share ownership. Taken together, the agreements are intended to provide WFOE with substantially all of the economic benefits from Chinese Entity and the obligation to absorb all of its losses. There are normally six agreements for the VIE structure: Loan agreement The shareholders of Chinese entity borrowed funds from WFOE in order to capitalize Chinese entity. In China, the shareholder is very difficult to get a loan from Offshore Company. Equity pledge agreement The shareholders executed an equity pledge agreement with WFOE which pledges their shares in Chinese Entity as collateral under the loan agreement and the other agreements. Call option agreement The shareholders agree to sell Chinese Entity to WFOE at any time for the original capital contribution. The […]

Enterprise Safety Production Certificate issues

The following is a summary of the research I conducted regarding the Enterprise Safety Production Certificate for Beijing WFOE , which will provide service to a project owner in Shanxi:

Applicable Law
– The applicable law is the PRC Work Safety law.

How long it takes to incorporate a restaurant in China?

Based on having incorporated many restaurants for our clients in China , we think the attached estimated timeline is very reasonable. Estimated Services Timeline for incoporating a restaurant in China. 16 Oct 2012

Term sheet introduction

I spoke about term sheet for Angel/VC investment last Thursday night for SLP( http://www.startupleadership.com). For those who are interested to learn term sheet , I gave you the powerpoint. 2a SLPTermSheetPresentation_USA When I get more time, I will explain each section of this PowerPoint in detail.