• Key Excerpts
  • VIE Structure
  • VIE Risks
  • VIE Revenue
  1. Includes approximately 130 subsidiaries and consolidated entities incorporated in China and approximately 230 subsidiaries incorporated in other jurisdictions. In addition, the entities pictured in this chart hold, directly and indirectly, an aggregate of approximately 160 additional subsidiaries and consolidated entities incorporated in China and approximately 100 additional subsidiaries incorporated outside of China not pictured in the chart.
  2. The principal holding company for our strategic investments, including Youku Tudou.
  3. Primarily involved in the operation of Taobao Marketplace.
  4. Primarily involved in the operation of Tmall and Juhuasuan.
  5. Primarily involved in the operation of Alimama.
  6. Primarily involved in the operation of Alibaba.com, 1688.com and AliExpress.
  7. Primarily involved in the operation of cloud computing services.

Key excerpts from filing(s) - related to VIEs

Our online and mobile commerce businesses are classified as value-added telecommunication businesses by the PRC government. Current PRC laws, rules and regulations generally restrict foreign ownership in value-added telecommunication services. As a result, we operate our online and mobile commerce businesses and other businesses in which foreign investment is restricted or prohibited through variable interest entities.
Moreover, substantial uncertainties exist with respect to the interpretation and implementation of these PRC laws, rules and regulations
In addition, on January 12, 2017, the State Council issued the Notice on Several Measures for Expansion of Opening-up Policy and Active Use of Foreign Capital, or the Notice No. 5, which purports to relax restrictions on foreign investment in sectors including service, manufacturing and mining. Specifically, the Notice No. 5 proposes to gradually open up telecommunication, Internet, culture, education and transportation industries to foreign investors. However, there are still substantial uncertainties with respect to the implementing rules and regulations of Notice No. 5.
Specifically, our variable interest entities that are material to our business are Zhejiang Taobao Network Co., Ltd., Zhejiang Tmall Network Co., Ltd., Hangzhou Alibaba Advertising Co., Ltd., Hangzhou Ali Technology Co., Ltd. and Alibaba Cloud Computing Ltd. Each of these variable interest entities other than Zhejiang Taobao Network Co., Ltd. is 80%-owned by Jack Ma, our lead founder, executive chairman and one of our principal shareholders, and 20%-owned by Simon Xie, one of our founders. Zhejiang Taobao Network Co., Ltd. is 90%-owned by Jack Ma and 10%-owned by Simon Xie.
We have been further advised by our PRC legal counsel, Fangda Partners, that there are substantial uncertainties regarding the interpretation and application of current and future PRC laws, rules and regulations. Accordingly, the PRC regulatory authorities may in the future take a view that is contrary to the opinion of our PRC legal counsel. We have been further advised by our PRC legal counsel that if the PRC government finds that the agreements that establish the structure for operating our Internet-based business do not comply with PRC government restrictions on foreign investment in the aforesaid business we engage in, we could be subject to severe penalties including being prohibited from continuing operations
We generate the significant majority of our revenue directly through our wholly-foreign owned enterprises, which directly capture the profits and associated cash flow from operations without having to rely on contractual arrangements to transfer cash flow from the variable interest entities to the wholly-foreign owned enterprises.

Risks identified in filing(s) - related to VIEs

If the PRC government deems that the contractual arrangements in relation to our variable interest entities do not comply with PRC governmental restrictions on foreign investment, or if these regulations or the interpretation of existing regulations changes in the future, we could be subject to penalties or be forced to relinquish our interests in those operations.
Substantial uncertainties exist with respect to the enactment timetable, interpretation and implementation of draft PRC Foreign Investment Law.
Our contractual arrangements may not be as effective in providing control over the variable interest entities as direct ownership.
Any failure by our variable interest entities or their equity holders to perform their obligations under the contractual arrangements would have a material adverse effect on our business, financial condition and results of operations.
We may lose the ability to use, or otherwise benefit from, the licenses, approvals and assets held by our variable interest entities, which could severely disrupt our business, render us unable to conduct some or all of our business operations and constrain our growth.
The equity holders, directors and executive officers of the variable interest entities may have potential conflicts of interest with our company.
The contractual arrangements with our variable interest entities may be subject to scrutiny by the PRC tax authorities. Any adjustment of related party transaction pricing could lead to additional taxes, and therefore substantially reduce our consolidated net income and the value of your investment.
Year Total Revenue VIEs Revenue Contribution of VIEs %
RMB (in millions)
2015 76,204 10,457 13.72%
2016 101,143 8,558 8.46%
2017 158,273 24,712 15.61%

Ownership and Voting power details

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