Equiom Collaborates with Grandway Law Offices on Exclusive Seminar on H-Share Transition
On April 21 and April 23, 2026, Grandway Law Offices successfully convened exclusive closed-door seminars in Shanghai and Beijing, respectively, under the theme "When 'H-Shares' Become Mainstream: Transition and New Establishment." Conducted by invitation only, these events brought together corporate representatives and professionals to engage in in-depth discussions concerning current red-chip restructuring and H-share listing pathways.
The seminars were presented by Grandway partners Elvis Hu (Shanghai session), Erin He (Beijing session), and Clare Lu. Special guest speakers included Novia Lu, Commercial Director, Asia at Equiom, and Rosalie Zhang, Founder of Ju Nei Jin Yu Consulting. The speakers provided forward-looking and actionable professional advice from the perspectives of legal, tax, and cross-border structural design.
In recent years, with the continued reduction of the foreign investment access continues to contract and the domestic fund market landscape undergoes transformation, the dismantling of red-chip structures and the return to the domestic market have emerged as topics of significant focus. Against this backdrop, pursuing overseas listings through H-shares has gradually become a key strategic option for enterprises. The seminar concentrated on core issues, including structural restructuring, equity incentive arrangements, and cross-border fund management, with the objective of providing enterprises with systematic perspectives and practical pathways.
Ms. Novia Lu, provided an in-depth analysis of the critical pathways for the smooth transition of equity incentive plans during the shift from a red-chip to an H-share structure. Drawing on Equiom's practical experience in global equity plan management, she demonstrated how automated management platforms may be utilized to interface with existing corporate systems, efficiently process adjustments to incentive parameters, migrate historical data, and address various compliance requirements.
Mr. Elvis Hu systematically outlined feasible pathways for transitioning from a red-chip structure to a direct H-share holding structure. Drawing on case studies, he emphasized the necessity of comprehensive planning with respect to cash flow, tax strategies, full mapping of offshore equity structures, ESOP migration, and the sequencing of multiple equity adjustments during the dismantling process, thereby offering a clear restructuring roadmap and risk assessment framework.
Ms. Clare Lu, drawing on case studies, focused on tax issues pertaining to non-resident transfers of equity in Chinese resident enterprises, as well as tax risks associated with indirect transfers of Chinese resident enterprise equity by non-resident enterprises. She provided a detailed interpretation of the "reasonable commercial purpose" criteria under Announcement No. 7 (2015) of the State Administration of Taxation. Furthermore, she highlighted dividend withholding tax on distributions from Wholly Foreign-Owned Enterprises to Hong Kong companies, the conditions for deferred tax payment under special tax restructuring, and key tax treatment considerations for employee equity incentives during structural adjustments, thereby offering clear tax compliance guidance for dismantling red-chip structures.
Ms. Rosalie Zhang, Founder of Ju Nei Jin Yu Consulting, systematically outlined the end-to-end adjustments for equity incentives when transitioning from red-chip to H-share structures, focusing on the treatment of existing equity incentives and the design of new incentives across four dimensions: structure, accounts, fund, and operations. Employing a seven-step process—comprising initiation, replacement plan formulation, share transfer, re-execution of incentive documents, relaunch of incentive platforms, updating of cross-border fund systems, legal/HR/finance/tax closing, and post-listing operations—she compared the overall equity incentive frameworks under red-chip and H-share structures, thereby providing enterprises with a complete implementation framework from the transition period through post-listing operations.
Additionally, the seminars featured closed-door networking sessions and targeted question-and-answer segments, during which participating guests engaged in thorough discussions concerning specific operational issues and cross-border fund management challenges. The atmosphere at the events was highly interactive and engaging.
Looking ahead, Grandway will continue to monitor developments and trends in cross-border capital markets, leveraging its extensive experience in red-chip structures, overseas listings, and cross-border investments to provide comprehensive, high-quality legal support to enterprises.
This article is a faithful English translation of an original article authored and published by Grandway Law Offices.
This article has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. This article cannot be relied upon to cover specific situations, and you should not act, or refrain from acting, upon the information contained within this article without obtaining specific professional advice. Please contact Equiom to discuss these matters in the context of your particular circumstance. Equiom Group, its partners, employees, and agents do not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this article or for any decision based on it.
