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Overseas listing refers to the issuance of shares by domestic joint stock limited companies to overseas investors and their public listing on overseas stock exchanges. There are two modes of overseas listing of Chinese enterprises: direct listing and indirect listing. The advantages of overseas listing are that the applicable laws are more acceptable to all parties, the examination and approval procedures are simpler, the range of negotiable stocks is wider, the operation of equity is convenient, and tax exemptions are exempted.

 

The main factors that attract Chinese companies to list on overseas exchanges.

 

1. The threshold of listing is low and the financing speed is fast.

 

Overseas exchanges usually have a low threshold for listing, especially the overseas GEM has relatively loose listing conditions for small and medium-sized innovative enterprises. In addition, overseas stock issuance generally adopts the registration system, the application procedure is simple and the cycle is short. Exchanges around the world have issued the card of "fast financing" to attract Chinese enterprises. A large number of innovative enterprises with excellent quality and urgent need of financing have not yet met the requirements of listing on domestic exchanges, or have to queue up in the examination and approval channels when they need funds to break through the bottleneck of development, which seriously restricts their development process. Under the circumstance that the domestic market can not satisfy its development demand for the time being, a considerable number of innovative enterprises only go to overseas capital market for the better.

 

2. The market and investors are relatively mature.

 

Overseas capital markets are dominated by institutional investors. After a long period of market evolution, mature investment concepts have gradually formed, and mature institutional investors are also easier to understand the business model of innovative enterprises. At the same time, there are many successful listings of similar innovative enterprises abroad.

 

3. Market restraint mechanism contributes to enterprise growth

 

Overseas capital market has a good cultivation mechanism for enterprises, especially innovative enterprises. Through overseas listing, Chinese enterprises are supervised by more mature international institutional investors and more standardized market mechanism, which greatly promotes the improvement of their own governance structure and management level. For example, foreign capital markets require a high level of sustained information disclosure after listing. It is important to maintain a good relationship with institutional investors for enterprises to refinance and achieve long-term development. At the same time, in order to make listed companies long-term market recognition, the company must have substantial improvement in its own management level, capital utilization efficiency and enterprise development planning. A large number of small, medium-sized and innovative enterprises in China emerge from the baptism of overseas capital market, which is closely related to the stricter market restraint mechanism of international capital market.

 

4. International reputation and overseas opportunities

 

Companies listed on overseas exchanges tend to win a high reputation and join the ranks of well-known domestic or international companies. At the same time, overseas listing can also bring abundant international cooperation resources, attract high-quality investors to improve the credibility of the enterprise itself, and the promotion of international visibility and cooperation opportunities from all aspects provide opportunities for many enterprises to move towards long-term development. Therefore, brand effect is also an important reason why many companies choose to list on the Nasdaq and NYSE.



Add: Suite 401, Level 4, 447 Kent Street, Sydney NSW 2000


Tel: +61 2 9283 4808