In fact, many "Internet companies in China" are located in Huang Xiangjiao: although it seems that their business is in China and their management is in China, their sources of funds and registration points are overseas. Internet companies are generally light-capital enterprises and do not have enough fixed assets to obtain mortgage loans from banks. So the source of funds is often venture capital. Venture capital usually comes from abroad. For example, Alibaba's main investors Yahoo and Softbank. The main profit mode of venture capital is to cash in when the invested enterprise goes public. Considering that foreign capital holding information enterprises is prohibited in China at present, foreign venture capitalists generally refuse to list their invested enterprises in China (in fact, Internet enterprises actually controlled by foreign capital cannot be listed in China, and variable entities are illegal in the view of China Securities Regulatory Commission). Therefore, the invested enterprises are generally registered overseas. Further considering the cost and tax of capital flow, most "Internet companies in China" are eventually registered in the Cayman Islands or similar places, where the supervision of corporate governance structure is extremely lax. So from the perspective of Internet companies, we can ask another question: Why do many Internet companies registered in the Cayman Islands and listed in the United States like to do business in China? From the perspective of supervision, China has higher requirements for listed companies (originally for the purpose of protecting investors, but practice has proved that there are many disadvantages, but this is beyond the scope of this topic). For example, companies are required to continue to make profits. This is an impossible task for Internet companies. For example, Douban announced that it can make a profit without further research and development six years after it was launched, but so far, Douban's profit is not significant. Many internet companies will starve to death if they wait until they are profitable before entering the stock market for financing. The US Securities and Exchange Commission allows unprofitable enterprises to go public. This requires a sound legal and regulatory environment to protect non-institutional investors. And this kind of environment is rare all over the world. From the point of enterprise registration, at present, China is registered as an industrial and commercial enterprise, and the United States is registered as a commercial enterprise, which has very low requirements for the enterprise itself. In the process of listing, the domestic approval time is very long. After NYSE was connected with Nasdaq in 2009, the listing requirements were far lower than those in China. As the most radical exchange in the world, Nasdaq even allows dual ownership (one of the important reasons why Alibaba is not listed in Hong Kong is that the Hong Kong Stock Exchange insists on the same shares and rights).
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