Share this on Twitter Share this on Facebook Share this on LinkedIn Share this on Sina Weibo Share this on Wechat Share this on LinkedIn There’s a pretty simple idea behind buying shares: Do so, and you end up owning some part — however small — of a company. As ever, in China things are not always so straightforward. Invest in a Chinese company listed on the New York Stock Exchange or any other foreign market — as millions of people do via their pension funds and other products — and the chances are you’re exposed to a variable interest entity, or VIE-structure. Chinese companies like tech giants Alibaba and Tencent, which operate in sectors where foreign investment is banned or limited, commonly use these structures. For tech companies and others who want to attract global investors, the typical way to get around the Chinese rules is to set up an offshore entity, often with the same name, which is then listed on an exchange like the NYSE. This listed company doesn’t own key parts — or sometimes any — of the underlying China operations. But it can consolidate that company’s results and bSubscribe or login to read the rest. Subscribers get full access to: Exclusive longform investigative journalism, Q&As, news and analysis, and data on Chinese business elites and corporations. We publish China scoops you won't find anywhere else. A weekly curated reading list on China from David Barboza, Pulitzer Prize-winning former Shanghai correspondent for The New York Times. A daily roundup of China finance, business and economics headlines. We offer discounts for groups, institutions and students. Go to our Subscriptions page for details.