Asian Companies and the U.S. Public Markets — Listing Pathways, Regulatory Hurdles, and What Has Changed

The Scale of the Existing U.S.-Listed Asian Universe

The conversation about Chinese and broader Asian company listings on U.S. exchanges often focuses on new issuance activity, but the more significant fact is the scale of the existing listed universe. As of March 2025, 286 Chinese companies were listed on U.S. exchanges — primarily on NYSE and Nasdaq — with a combined market capitalization of approximately $1.1 trillion. This universe includes some of the world's largest technology platforms, e-commerce operators, fintech companies, and online education businesses. Their collective market cap represents a substantial portion of U.S.-listed foreign issuer value.

New issuance activity has resumed after the regulatory turbulence of 2021–2023. Since January 2024, approximately 48 new Chinese company IPOs have priced on U.S. exchanges, raising a combined $2.1 billion. These transactions span a range of sectors and issuer sizes, from micro-cap listings below $50 million to mid-cap IPOs in the $200 to $500 million range. The pipeline of companies evaluating or preparing for U.S. listings from China, Hong Kong, Southeast Asia, and other Asia-Pacific markets remains active as of early 2026.

For companies from this region considering a U.S. listing, the regulatory environment they are entering in 2026 is materially different from what existed in 2019 or 2020. The PCAOB inspection framework has been transformed, the HFCAA delisting mechanism is operational, VIE disclosure requirements have been significantly expanded, and Nasdaq's new discretionary listing authority introduces a new layer of exchange-level scrutiny that did not previously exist. Understanding each of these developments is essential to listing preparedness.

PCAOB Inspection Restoration — What Changed in December 2022

The Public Company Accounting Oversight Board's ability to inspect audit firms in China and Hong Kong was effectively blocked for over a decade before December 2022. Chinese authorities had restricted PCAOB access on the grounds that audit working papers contained state secrets and could not be shared with foreign regulators. This restriction created a fundamental regulatory asymmetry: Chinese companies listed on U.S. exchanges were subject to SEC disclosure requirements but their audits were conducted by firms that could not be inspected by the U.S. regulator responsible for audit oversight.

The Holding Foreign Companies Accountable Act, enacted in December 2020, formalized this concern by establishing a statutory mechanism for delisting companies whose auditors remained uninspected for three consecutive years. The HFCAA was a legislative response to what Congress and the SEC viewed as an unacceptable information gap: companies raising billions from U.S. investors could not guarantee that their audits met the same standards as every other listed company.

The resolution came in December 2022, when the PCAOB announced that it had obtained full access to inspect audit firms in China and Hong Kong, completing inspections of KPMG Huazhen and PricewaterhouseCoopers Hong Kong. The SEC's accounting oversight chair described this as the first time in the history of the PCAOB that it had been able to conduct inspections in mainland China and Hong Kong without restrictions. The PCAOB has continued conducting inspections since December 2022, and the firms serving major Chinese listed companies have maintained inspectable status.

For companies planning a U.S. listing, the PCAOB resolution removed the most immediate delisting risk. But the HFCAA framework remains on the books, and its three-year trigger is a standing compliance obligation. Companies must select audit firms that maintain inspectable status with the PCAOB, monitor their audit firm's ongoing inspection results, and be prepared to switch auditors if the firm's inspection status becomes jeopardized. This is not a one-time diligence item — it is a continuous governance responsibility for every China-based or Hong Kong-based public company.

VIE Structures — Disclosure Requirements and Structural Risk

The Variable Interest Entity structure remains the predominant legal architecture for Chinese technology, internet, and media companies seeking U.S. listings. China's foreign investment restrictions in certain sectors prohibit direct foreign equity ownership of operating businesses. VIE structures address this by interposing a series of contractual arrangements between the offshore holding company (which is the listed U.S. entity) and the onshore Chinese operating company. The offshore entity does not own equity in the operating company; it controls the operating company's economics and decision-making through a web of contracts including exclusive business agreements, loan agreements, and equity pledge arrangements.

The VIE structure works in practice — the majority of China's largest U.S.-listed companies use it — but it carries inherent risks that the SEC requires to be disclosed with specificity. The core risk is that the contractual arrangements may not be as effective as direct equity ownership in ensuring the offshore entity's control over the operating company. Chinese courts have not comprehensively adjudicated the enforceability of VIE control contracts in the context of a dispute between the contracting parties. If the onshore operating entity's management or shareholders chose to repudiate the VIE arrangements, the offshore listed company might have limited recourse under Chinese law.

The SEC's disclosure guidance requires VIE issuers to describe the structure with sufficient clarity that investors can understand the nature of what they are actually purchasing. Investors in VIE-structured companies are not buying equity in the Chinese operating business — they are buying equity in an offshore vehicle that holds contracts purporting to give it economic exposure to that operating business. The difference matters, and SEC staff have consistently required more specific and prominent disclosure of this distinction in registration statements filed since 2021.

Specific disclosure requirements for VIE structures now include: a diagram of the full corporate structure showing the contractual relationships; an explanation of how the VIE contracts are enforced and what remedies are available if they are breached; disclosure of any regulatory developments in China that could affect the legality or enforceability of the arrangements; and risk factors addressing the scenario in which the VIE structure is determined to be non-compliant with Chinese regulations or subject to enforcement action. Companies with VIE structures should expect these sections of their registration statement to receive detailed SEC comment review.

FPI vs. Domestic Issuer — The Registration and Reporting Election

Asian companies seeking U.S. listings must make a fundamental election at the outset of their registration process: whether to register as a Foreign Private Issuer (FPI) or as a domestic issuer. This election determines the registration form used, the ongoing reporting obligations, and the governance standards applicable to the company for as long as it maintains its exchange listing.

A company qualifies as an FPI if more than 50% of its voting securities are held by non-U.S. residents, or if the following three conditions are all met: a majority of the directors or officers are not U.S. citizens or residents; more than 50% of the company's assets are located outside the United States; and the company's business is administered principally outside the United States. Most Chinese and other Asian companies qualify as FPIs under these tests.

FPIs file on Form F-1 (for IPOs) rather than Form S-1, and use Form 20-F for annual reports rather than Form 10-K. FPIs are not required to file quarterly reports on Form 10-Q; instead they file Form 6-K to furnish interim disclosures. FPIs are also exempt from certain U.S. proxy rules and can follow home country governance standards in lieu of full Nasdaq or NYSE corporate governance requirements in specific areas, provided they disclose the differences between their home country practices and U.S. standards.

The FPI status provides meaningful regulatory flexibility but does not reduce the substance of required disclosure. Financial statements in Form F-1 and Form 20-F must be prepared in accordance with U.S. GAAP or, if using IFRS as adopted by the IASB, with a reconciliation to U.S. GAAP for companies that use IFRS with material differences from U.S. GAAP. SEC comment review of FPI filings is as rigorous as for domestic issuers, and the 2024 SPAC rules apply equally to FPI co-registrants in de-SPAC transactions.

The Nasdaq Anti-Manipulation Rule — A New Gatekeeping Power

In December 2025, Nasdaq introduced a rule granting the exchange discretionary authority to deny listing applications even when all technical listing standards have been satisfied. This rule, discussed in more detail in our separate analysis, was developed in part in response to patterns the exchange observed in smaller Chinese and other international company listings characterized by unusual post-IPO trading behavior — extreme price surges in the first days of trading driven by concentrated buy orders, followed by sharp declines that left retail investors with significant losses.

The rule creates a new layer of gatekeeping that operates independently of the SEC registration process. A company can complete its F-1 or S-1 registration, receive SEC effectiveness, and still be denied a Nasdaq listing if the exchange's listing qualifications team determines that the applicant or its associated persons present a risk of market manipulation or other activities inconsistent with the exchange's rules or the public interest. This evaluation can consider the identities and backgrounds of significant shareholders, underwriters, and other deal participants, as well as patterns in prior transactions involving similar parties.

For Asian companies planning a U.S. listing, the December 2025 rule has a direct practical implication: the exchange-level evaluation now begins long before the listing application is submitted. Companies that have experienced anomalous trading in their home market, that are associated with underwriters or selling shareholders with a history of problematic U.S. listings, or that have structural features commonly associated with manipulated listings will receive heightened scrutiny. Proactive engagement with Nasdaq's listing qualifications team early in the process — before filing the registration statement — is advisable for any company that may have exposure to these concerns.

Pathway Selection — IPO, SPAC, or Reverse Merger

Asian companies evaluating U.S. public market access have three primary pathways available: a traditional IPO through an S-1 or F-1 registration; a SPAC merger, which triggers the co-registrant and disclosure requirements of the 2024 SEC rules; and a reverse merger into an existing U.S. public shell company, which carries its own distinct regulatory requirements including the SEC's 12-month seasoning period for resales of securities and the Super 8-K disclosure obligation.

For companies with the governance infrastructure, two-year PCAOB-compliant audit history, and financial profile to support a traditional IPO, the F-1 route generally provides the most credibility with institutional investors and the cleanest post-listing cap table. The FPI accommodation reduces some ongoing reporting burdens without eliminating the substance of the disclosure framework. The primary constraint for many Asian companies is the governance build-out required: independent director recruitment, audit committee establishment, and internal controls documentation that meet U.S. exchange standards.

The SPAC merger route, available when a suitable sponsor with appropriate sector expertise and PIPE investor relationships can be identified from the approximately 245 active searching vehicles, can provide a faster listing timeline for companies that are financially ready but lack some elements of governance infrastructure. The 2024 co-registrant rules have narrowed the regulatory gap between a SPAC merger and a traditional IPO for target company officers and directors, but the SPAC route still offers a negotiated valuation process and access to the sponsor's institutional relationships.

The reverse merger route, while technically available, carries significant disadvantages for Asian issuers in the current environment. The 12-month seasoning period for resales — during which existing shareholders cannot sell their securities — can effectively trap capital for a year following the close. The Super 8-K filing requirement, which must include audited financial statements as if the company had filed a full registration statement, imposes substantial compliance costs. And the reputational associations of the shell company route, which has historically been disproportionately used in transactions later found to involve fraud or manipulation, create institutional investor skepticism that can take years to overcome.