TechFlow News, May 6: According to Benchmark Studio, following inquiries from China’s Securities Regulatory Commission (CSRC) regarding overseas shareholding structures, Chinese tech startups—including Moonshot AI and DeepRoute.ai—are evaluating the feasibility of relocating their corporate registration back to mainland China. All are currently consulting with legal counsel on potential solutions but have yet to reach a final decision. Shanghai-based AI model developer StepFun has already initiated the process of unwinding its overseas shareholding structure to accelerate regulatory approval for its planned Hong Kong IPO.
The immediate trigger for this regulatory tightening was Meta’s $2 billion acquisition of Manus—an AI agent company founded by Chinese nationals. Authorities have ordered the deal’s reversal, prompting a systemic review by regulators of the “domestic operations, offshore registration” corporate model.
Dismantling a red-chip structure is highly complex, typically taking six months to one year. It involves multiple steps, including repurchasing offshore equity, establishing joint ventures, and facilitating investor reinvestment. Moreover, shares held by such joint ventures face a 12-month lock-up period following a Hong Kong listing—twice as long as the standard lock-up for ordinary red-chip stocks. Analysts note that if red-chip structures face comprehensive restrictions, Chinese startups’ ability to raise U.S. dollar-denominated financing from overseas markets would be significantly weakened.
