# Shanghai Stock Exchange: SSE, STAR Market, GDR and the Bond Route

> SSE and STAR Market thresholds in numbers, the GDR route after the CSRC 2023 tightening, bond options, and whether foreign firms can list in China.

Author: Maria Plotnikova — Lawyer, Family Office (https://wiki.private.law/en/authors/plotnikova)
Last modified: 2026-09-04T00:00:00.000Z
Canonical: https://wiki.private.law/en/shanghai-listing
Topics: investments
Jurisdictions: china
Functional tags: corporate-banking
Product tags: investment, company
Semantic tags: corporate-banking, investment, company, custom-consultation

---

## Concept

A foreign company cannot list its shares on the Shanghai Stock Exchange. Direct listing by a foreign issuer on the SSE does not exist: the PRC Securities Law is built around issuers incorporated under Chinese law, and it contains no admission regime for a foreign legal entity at all.

Three workarounds exist. **CDR (中国存托凭证)**, the Chinese Depositary Receipt: the mutual-receipt mechanism is open to companies listed in the United Kingdom, Switzerland and Germany ([CSRC provisions, October 2018, as amended February 2022](https://www.sse.com.cn/assortment/stock/slsc/briefintro/)), and in seven years nobody has used it. **Red-chip structure**: an offshore holding company with Chinese assets returns to STAR at capitalisation of **≥ CNY 10 billion**, or **≥ CNY 5 billion** with revenue **≥ CNY 500 million**. **Bonds**: a renminbi issue by a non-resident on the exchange is legally available but statistically marginal. Above all three sits the **negative list** — a joint-stock company with foreign investment must demonstrate that its business does not fall within the restrictions on foreign investment access ([2024 edition, NDRC, PDF](https://www.ndrc.gov.cn/xxgk/zcfb/fzggwl/202409/P020240907514493057643.pdf)).

On the SSE the capital and the ownership chain may be foreign. The issuer may not. The map of Chinese instruments sits in the [China hub](https://wiki.private.law/en/china-hub); the venue that does admit a foreign issuer directly is [Hong Kong](https://wiki.private.law/en/hong-kong-ipo).

> 🍓 The 2023 registration reform was not a liberalisation. Fourteen months after it, on 30 April 2024, the SSE raised the last-year net profit requirement from CNY 60 million to CNY 100 million, the cash flow requirement from CNY 100 million to CNY 200 million, and the market capitalisation under the third standard from CNY 8 billion to CNY 10 billion. The barrier is set by numbers, not by the type of regime.

## Matrix: funding objective → instrument → non-resident access

The matrix answers what part of the Chinese capital market is open to a foreign person, cut by objective rather than by venue.

| Objective | Instrument | Open to a non-resident |
| --- | --- | --- |
| Renminbi equity against Chinese assets | **IPO on the SSE Main Board or STAR** | **As issuer — no.** Only a Chinese joint-stock company; the non-resident is merely its shareholder, and the business is screened against the negative list |
| Bringing an offshore holding company with Chinese assets onshore, VIE included | **Red-chip listing or CDR on STAR** | **Conditionally yes.** ≥ CNY 10 billion, or ≥ CNY 5 billion with revenue ≥ CNY 500 million; with an overseas listing — ≥ CNY 200 billion, or ≥ CNY 20 billion plus proprietary technology |
| An issuer listed in London, Zurich or Frankfurt coming to the SSE | **CDR under the interconnection mechanism** | **Legally yes, practically no:** zero issues in seven years |
| Hard currency abroad while listed in A-shares | **GDR on the LSE, SIX or Deutsche Börse** | **No.** Chinese companies only, A-share capitalisation ≥ CNY 20 billion (since 18.07.2023) |
| Renminbi borrowing by a foreign borrower | **Exchange-traded panda bonds on the SSE** | **Legally yes, statistically no:** ~0.7% of issuance; the default route is [interbank](https://wiki.private.law/en/panda-bonds) |
| Buying Chinese securities as an investor | **Stock Connect, QFII/RQFII** | **Yes.** STAR through Connect is open to institutional professional investors only; limits of 10% and 30% |
| Strategic entry into a listed company | **Foreign strategic investment regime** | **Yes, easier since 02.12.2024:** assets from $50 million, or $300 million under management; lock-up from 12 months |

## How the market is organised

The mainland market is divided between three exchanges by administrative fiat, according to issuer type: filing on the wrong board is cut off regardless of the financials.

At 31 December 2025 the SSE held 2,340 companies and CNY 64.78 trillion of capitalisation, the SZSE 2,887 and CNY 43.24 trillion, and the Beijing Stock Exchange 288 and CNY 0.87 trillion ([Baker McKenzie](https://resourcehub.bakermckenzie.com/en/resources/cross-border-listings-guide/asia-pacific/shanghai-shenzhen-and-beijing-stock-exchanges/topics/overview-of-exchange)). The SSE runs two boards: the **Main Board (主板)** for mature profitable companies, and the **STAR Market (科创板)** — 592 companies and more than CNY 9.6 trillion at 5 November 2025 ([SSE, published 10.11.2025](https://english.sse.com.cn/news/newsrelease/digest/c/c_20251110_10797611.shtml)), the only mainland board that admits loss-making issuers, weighted voting rights and red-chip structures. **ChiNext** is stricter than STAR on profit, but under a CSRC decision of 9 April 2026 it too admits loss-making companies ([CSRC](https://www.csrc.gov.cn/csrc/c100028/c7625372/content.shtml)); the **BSE** in Beijing is a small-cap board starting at CNY 200 million of capitalisation.

**A-shares and B-shares.** A-shares are renminbi instruments for residents and for admitted foreign channels. B-shares are a 1992 relic denominated in dollars: roughly 80 issuers, valuations around 60% of comparable A-shares, rules unchanged since 1995, and no new offerings ([AllBright Law, September 2025](https://www.allbrightlaw.com/CN/10475/1969a683c969ff8f.aspx)).

**The registration-based IPO system (注册制)** was extended to every board on 17 February 2023 ([CSRC Shanghai](http://www.csrc.gov.cn/shanghai/c105566/c7155731/content.shtml)): substantive review sits with the exchange — acceptance, rounds of written inquiries (问询), the Listing Review Committee — and the CSRC registers the offering within 20 working days. This is not liberalisation. The State Council's "New Nine Articles" of 12 April 2024 require regulators to "hold the entry gate to issuance and listing firmly shut" ([CSRC](http://www.csrc.gov.cn/csrc/c100028/c7473584/content.shtml)).

## SSE Main Board: thresholds as amended 30 April 2024

Meeting any one of three sets of financial criteria is sufficient.

| Criterion | Standard 1 | Standard 2 | Standard 3 |
| --- | --- | --- | --- |
| Market capitalisation | — | **≥ CNY 5 billion** | **≥ CNY 10 billion** |
| Net profit | Positive for 3 years; cumulative **≥ CNY 200 million**, last year **≥ CNY 100 million** | Positive in the last year | Positive in the last year |
| Revenue | 3-year total **≥ CNY 1.5 billion** (alternative to cash flow) | **≥ CNY 600 million** | **≥ CNY 1 billion** |
| Operating cash flow | 3-year total **≥ CNY 200 million** (alternative to revenue) | 3-year total **≥ CNY 250 million** | — |

The thresholds follow the [SSE Main Board section](https://www.sse.com.cn/services/listingwithsse/regulations/main/), cross-checked against [Sina Finance](https://finance.sina.com.cn/roll/2024-12-24/doc-ineapfhx1939552.shtml). The English-language SSE site is doubly out of date: the English listing overview has not been updated since 31 October 2019 and asks for cumulative three-year net profit of CNY 30 million with operating cash flow of CNY 50 million, while the English translation of the Listing Rules is still the February 2023 edition — last-year profit of CNY 60 million and CNY 8 billion under the third standard. The Chinese texts in force say CNY 100 million and CNY 10 billion.

Non-financial requirements: operating history **≥3 years**; no change of actual controller for 3 years; post-issue share capital **≥ CNY 50 million**; free float **≥25%** (**≥10%** where capital exceeds CNY 400 million); three years of CAS financial statements with an audit ([audit in China](https://wiki.private.law/en/audit-china)); a **36-month** [lock-up](https://wiki.private.law/en/lock-up) for the controlling shareholder. Since 1 January 2025 a stock is flagged **ST** if dividends over three years amounted to less than 30% of average annual profit and less than CNY 50 million ([SSE, 30.04.2024](https://www.sse.com.cn/listing/announcement/notification/c/c_20240430_10764654.shtml)): reinvesting all post-listing profit is not an option.

## STAR Market: five listing standards

The five criteria sets in Article 2.1.2 of the STAR Listing Rules are the only construction in the PRC where market capitalisation substitutes for profit and revenue in full.

| Standard | Market capitalisation | Profit | Last-year revenue | R&D or cash flow |
| --- | --- | --- | --- | --- |
| **1** | ≥ **CNY 1 billion** | Positive for 2 years, cumulative **≥ CNY 50 million** | — | — |
| **1, alternative** | ≥ **CNY 1 billion** | Positive in the last year | **≥ CNY 100 million** | — |
| **2** | ≥ **CNY 1.5 billion** | Not required | **≥ CNY 200 million** | 3-year R&D/revenue **≥15%** |
| **3** | ≥ **CNY 2 billion** | Not required | **≥ CNY 300 million** | 3-year cash flow **≥ CNY 100 million** |
| **4** | ≥ **CNY 3 billion** | Not required | **≥ CNY 300 million** | — |
| **5** | ≥ **CNY 4 billion** | Not required | **Not required** | Product approved by a state authority; for pharmaceuticals, a drug in Phase II clinical trials |

The figures follow the [SSE STAR section](https://www.sse.com.cn/services/listingwithsse/regulations/star/) and the [Listing Rules, PDF](https://www.sse.com.cn/lawandrules/sselawsrules/repeal/rules/c/10118921/files/9bd863640cc44cfb8db0a7e756df68dc.pdf). Post-issue share capital is **≥ CNY 30 million** and the track record 2 years; red-chip and weighted-voting-rights issuers enter from CNY 10 billion, or from CNY 5 billion with revenue ≥ CNY 500 million.

The binding constraint is often not the financials but the **sci-tech attribute criteria (科创属性)**, tightened on 30 April 2024: R&D ≥5% of revenue over three years or cumulative **≥ CNY 80 million** (previously 60 million); R&D headcount ≥10%; **≥7 invention patents** (previously 5); revenue CAGR **≥25%** (previously 20%) ([CNStock](https://news.cnstock.com/news,bwkx-202404-5226811.htm)). Real estate and financial businesses are excluded outright.

**The fifth standard and the STAR Growth Tier are the story of 2025–2026.** From June 2023 the standard was frozen in practice: two years without a single approval, and the number of companies carrying the "U" marker fell from 54 to 32. It was unfrozen by the CSRC's **"1+6" package** of 18 June 2025, which established the Sci-Tech Growth Tier ([CSRC](http://www.csrc.gov.cn/csrc/c100028/c7565139/content.shtml)). The first loss-making IPO after the pause was **Wuhan Healthgen Biotechnology (禾元生物; Wuhan Heyuan Biotechnology in the source) on 1 July 2025**: a raise of CNY 3.5 billion on revenue of CNY 25.2 million ([Caixin](https://www.caixinglobal.com/2025-07-02/chinas-star-market-clears-first-unprofitable-ipo-since-fifth-standard-revival-102337029.html)). The first-year tally at 12 June 2026: 59 applications to STAR, of which **24 from loss-making companies and 9 under the fifth standard** ([21jingji](https://www.21jingji.com/article/20260612/herald/8578b96615a92b4b39bbde44ab71a4c6.html)); the perimeter has been widened to commercial space and developers of large AI models ([SSE, "Guidance No. 10"](https://www.sse.com.cn/lawandrules/sselawsrules2025/stocks/review/firstepisode/c/c_20260617_10822578.shtml)).

## Venue comparison: SSE Main Board, STAR, ChiNext, HKEX

The mainland demands several times more profit than Hong Kong, yet admits a loss-making technology issuer at a lower capitalisation than is generally assumed.

| Parameter | SSE Main Board | STAR Market | ChiNext | HKEX Main Board |
| --- | --- | --- | --- | --- |
| Profit gate | CNY 200 million over 3 years, CNY 100 million in the last year | CNY 50 million over 2 years | CNY 100 million over 2 years | HK$80 million over 3 years |
| Market capitalisation | CNY 5–10 billion (Standards 2–3) | **CNY 1 billion** | CNY 1 billion | HK$500 million |
| Loss-making issuer | No | **Yes: CNY 4 billion** | Yes, by CSRC decision of 09.04.2026 | Yes: Chapters 18A and 18C |
| Foreign issuer | **No** | **No** (red-chip: yes) | **No** | **Yes** |
| Accounting standards | CAS | CAS | CAS | IFRS, HKFRS, US GAAP |
| Issuance cost | CNY 100 million / 10.18% | CNY 139 million / 9.41% | CNY 79.7 million / 11.54% | Separate cost base — see the Hong Kong article |

The Hong Kong profit gate follows [Chapter 8 of the HKEX Listing Rules](https://www.hkex.com.hk/-/media/hkex-market/listing/rules-and-guidance/listing-rules-contingency/main-board-listing-rules/equity-securities/chapter_8): the profit test has been in force in this form since 1 January 2022, while the rest of the chapter has been rewritten more than once since. The cost figures are drawn from 183 IPOs between January 2025 and 17 June 2026 ([Dahe Cube](https://app.dahecube.com/nweb/news/20260625/278331n6a7f35df76d.htm?artid=278331)).

> 🧭 The order of questions when choosing a venue. First, jurisdiction: if the issuer will not be a Chinese legal entity, the mainland columns close entirely. Second, sector: STAR accepts hard technology only. Third, profit. Fourth, currency: the mainland pays in renminbi with constrained repatriation, Hong Kong in freely convertible money, and for a profit centre outside the PRC that outweighs the valuation gap.

## The IPO process: steps, timelines, cost

The path from decision to opening bell takes 2.5 to 4 years: the horizon covers building three years of CAS accounts and converting into a joint-stock company, 12 to 24 months of active preparation and 193 to 691 days of review, while the statutory "three months" covers only the final leg.

**Preparation, 12 to 24 months.** Conversion of a limited liability company into a joint-stock company is carried out at the net book value of assets (整体变更); done any other way, the three-year track record resets to zero ([company form in the PRC](https://wiki.private.law/en/company-china)). Capitalising retained earnings in the process creates an individual income tax event for natural-person shareholders. Then come three years of CAS audit and a tutoring period under CSRC supervision. The **sponsor (保荐机构)** supervises the issuer for three years after listing and, under Article 85 of the Securities Law, is liable to investors for false disclosure **with a presumption of fault**; on STAR it also subscribes for 2–5% of the offering with a 24-month lock-up.

**Review and registration.** Acceptance of the application takes 5 working days, the first round of inquiries 20 working days, the number of rounds is unlimited, and CSRC registration takes 20 working days, against a headline norm of "no more than 3 months" ([SSE](https://www.sse.com.cn/listing/aboutus/auditprocess/)). That norm is fictitious: it excludes the issuer's response time, suspensions and on-site inspections. Actual elapsed time from acceptance to listing across 335 companies between 2023 and March 2024: **Main Board 193 days, BSE 263, STAR 403, ChiNext 691** ([Gelonghui](https://m.gelonghui.com/p/705289)). The 23× P/E cap was abolished together with the approval system; the price is set by **inquiry-based bookbuilding (询价)** among institutional investors with the highest bids trimmed off, and the first five trading days run without price limits. In H1 2026 the average offering P/E was 25× against 19× a year earlier ([EY, PDF](https://www.ey.com/content/dam/ey-unified-site/ey-com/en-cn/newsroom/2026/6/documents/ey-chinese-mainland-and-hong-kong-ipo-report-en.pdf)).

**Rejections, 2024 to 2026.** In 2025 the exchanges accepted 300 applications, 115 companies listed, and 108 processes were terminated, of which **101 were voluntary withdrawals** — 75% fewer than in 2024 ([Sina Finance](https://finance.sina.com.cn/roll/2026-01-09/doc-inhftcfm2887296.shtml)). H1 2026 brought 242 applications, up 37%. The old formula that an on-site inspection equals a withdrawal has broken down: of the 40 companies selected for inspection as at 1 July 2026, **one** withdrew, against 71–82% in 2021–2023 ([21jingji](https://m.21jingji.com/article/20260703/ff12472921a4d997fcbc515666c6315a.html)).

**Cost.** Average issuance expenses run to **CNY 80.6 million**, with a median of CNY 71.9 million, and an average take rate of **11.15% of proceeds**: underwriting and sponsor fees CNY 56.4 million, audit CNY 13.3 million, legal CNY 6.7 million. STAR is the most expensive in absolute terms (CNY 139 million) and the cheapest in percentage terms (9.41%); the BSE is the reverse.

> ⚙️ Since 15 February 2025 a State Council regulation has prohibited linking the fees of sponsors, law firms and auditors to the outcome of the offering ([Sina Finance, 17.01.2025](https://finance.sina.com.cn/jjxw/2025-01-17/doc-inefhrnw6488127.shtml)). The success-fee model is unlawful in the PRC: the market has moved to fixed fees paid in stages, and an application withdrawn halfway leaves the issuer with a fully paid preparation bill and no money raised.

## What is open to a foreign company: CDR and red-chip

A CDR is a receipt over the shares of an issuer incorporated outside the PRC; it is the only formally open entry to the SSE for a foreigner, and simultaneously the least used.

**The innovative-enterprise and red-chip pilot** rests on State Council Notice 2018 No. 21 and CSRC announcements 2020 No. 20 and 2021 No. 20 ([CSRC](https://www.csrc.gov.cn/csrc/c101802/c1496491/content.shtml)). The thresholds: a red-chip company already listed abroad needs capitalisation ≥ CNY 200 billion or, after the April 2020 easing, ≥ CNY 20 billion plus proprietary leading technology; an unlisted one needs revenue ≥ CNY 3 billion at a valuation ≥ CNY 20 billion. The two sets of thresholds do not compete: the pilot numbers govern a return to the mainland outside STAR, while a listing on STAR itself runs under Article 2.1.3 of the STAR Listing Rules — CNY 10 billion, or CNY 5 billion with revenue ≥ CNY 500 million. The only realised case is **Ninebot (**[**689009.SH**](https://www.sse.com.cn/star/en/marketdata/snapshot/c/5594202.shtml)**) in October 2020**. One detail matters for VIE structures: issuing **shares** requires ministerial and NDRC clearance, while issuing **CDRs** does not ([Zhong Lun](https://www.zhonglun.com/research/articles/8224.html)); see also [holding structures](https://wiki.private.law/en/holding-structures) and [national security review](https://wiki.private.law/en/national-security-review).

**The mutual depositary receipt regime** covers the United Kingdom, Switzerland and Germany: a company listed on a qualifying overseas exchange may issue CDRs on the SSE Main Board. In the seven years since June 2019 nobody has done so — because of the thresholds, the reconciliation of accounts to CAS, and the absence of any economic point, since the renminbi raised cannot be freely taken out. Even so, on 14 January 2026 the Ministry of Finance, the State Taxation Administration and the CSRC extended the preferential CDR tax regime into 2026–2027, for a market with a single issuer ([Sina Finance](https://finance.sina.com.cn/jjxw/2026-01-21/doc-inhiaktr5323022.shtml)).

> ⚠️ Planning an SSE entry through a CDR as a foreign issuer is not a viable strategy. Zero issues in seven years, with the rulebook in force and the tax relief being rolled forward, is not a case of "it has not happened yet" — it is a stable state of the market. One workable variant exists: a red-chip company with Chinese assets on STAR.

## GDR: the route in the opposite direction

A GDR is a receipt over the shares of a Chinese listed company placed in London, Zurich or Frankfurt; it is a channel for taking a Chinese issuer out, not for bringing a foreign issuer in.

The mechanism launched on 17 June 2019 as the Shanghai–London Stock Connect, and in February 2022 the CSRC extended it to Switzerland and Germany. The peak was 9 offerings on SIX in 2022 and 8 in 2023.

| Parameter | Before the 2023 reform | After 18.07.2023 |
| --- | --- | --- |
| Exchange procedure | Simplified "green corridor" | **Full cycle, as for a private placement** |
| A-share capitalisation | No threshold | **120-day average ≥ CNY 20 billion** |
| Listing seasoning | Not required | **At least 1 year** |
| Relationship with the CSRC | Exchange approval | **Filing:** submission to the CSRC within 3 working days of filing with the overseas regulator (since 31.03.2023), plus disclosure at seven control points |
| Justification of purpose | General requirement | **Guidance No. 5 of 16.05.2023:** the issuer must justify the need to raise |
| Offer price | — | **Not below 90% of the 20-day average closing price** (80% for a domestic placement) |
| Conversion into A-shares | Reverse exchange at a discount used as arbitrage (estimate) | **120-day prohibition**; 36 months for the controlling shareholder |

The comparison uses the [SSE consultation of 02.06.2023](https://www.sse.com.cn/lawandrules/publicadvice/c/c_20230602_5722095.shtml) and analyses by [Han Kun](https://hankunlaw.com/portal/article/index/cid/8/id/13388.html) and [Zhong Lun](https://www.zhonglun.com/research/articles/9206.html). The receiving exchange asks for far less: SIX expects capital from CHF 25 million ([SIX IPO Guide, PDF](https://www.six-group.com/dam/download/the-swiss-stock-exchange/listing/equity/ipo/six-ipo-guide-en.pdf)).

**The channel collapsed.** In June 2023 four companies withdrew GDR plans within two weeks, five more followed by year-end, and seven more in 2024, including Sany Heavy Industry and East Money; only two new plans were announced across 2024 ([21jingji](https://www.21jingji.com/article/20241108/herald/b68121bac21bc7c99d6ed39ddda96d10.html)). Sanhua cancelled an approved CNY 5 billion GDR and went to Hong Kong instead. There are isolated signs of life in 2026 — a decision to list GDRs on SIX was published in April — but nothing approaching 2022–2023 volumes.

**The A+H route has taken over the GDR's function.** There were 19 A+H offerings in 2025 ([Sina Finance, 23.07.2026](https://finance.sina.com.cn/wm/2026-07-23/doc-iniiunaz1468243.shtml)): the principal channel from a Chinese issuer to Western capital today is Hong Kong, not the GDR, and that route is set out in the article on [listing on the HKEX](https://wiki.private.law/en/hong-kong-ipo).

## The SSE bond route

The SSE exchange debt market is one of the largest in the world — around CNY 4.5 trillion issued in 2025 — but for a non-resident it is closed by statistics rather than by law.

Issuable instruments include corporate bonds (公司债), ABS, green bonds and sci-tech innovation bonds, Belt and Road bonds, REITs and panda bonds ([SSE guide, as amended 21.05.2025](https://www.sse.com.cn/lawandrules/sselawsrules2025/bond/listing/corporatebond/)). The fork with the interbank market matters: on the exchange the SSE reviews and the **CSRC** registers, while on the CIBM the **PBoC and NAFMII** govern; exchange requirements are the stricter of the two, since average distributable profit over three years must cover annual interest.

The honest conclusion: **the exchange panda route is practically dead for a non-resident** — the interbank market accounted for **99.3% of 2026 panda bond issuance** ([S&P Global China Ratings, 13.08.2026, PDF](https://www.spgchinaratings.cn/upload/20260813_pandabonds_CN.pdf)), and there is exactly one notable exchange precedent: **RUSAL, March 2017**. The debt domain in full sits in the article on [panda bonds](https://wiki.private.law/en/panda-bonds); the price of money in the PRC is covered in [lending in China](https://wiki.private.law/en/china-lending).

## Investor access, repatriation and tax

For a buyer of Chinese securities the market is far more open than for an issuer: Stock Connect, QFII/RQFII, Bond Connect and Swap Connect all work.

**Stock Connect (Northbound)** is the principal channel: the daily quota on the Shanghai leg is CNY 52 billion, and a stock enters the eligible list on a six-month daily average capitalisation ≥ CNY 5 billion and a six-month daily average turnover ≥ CNY 30 million. The constraint usually lost in summaries: STAR shares have been inside Connect since 1 February 2021, but **only institutional professional investors may trade them** ([HKEX FAQ, 06.07.2026, PDF](https://www.hkex.com.hk/-/media/HKEX-Market/Mutual-Market/Stock-Connect/Getting-Started/Information-Booklet-and-FAQ/FAQ/FAQ_En.pdf)). Ownership limits are 10% per investor and 30% in aggregate.

**QFII/RQFII** after the reform in force from 1 November 2020: quotas abolished, the two regimes merged, applications reviewed within 10 working days, and the scope extended to interbank bonds, futures, options and repo ([SSE](https://english.sse.com.cn/access/qfiirqfii/rules/); on safekeeping, see [securities custody](https://wiki.private.law/en/securities-custody)). **Bond Connect** served approximately 1,170 institutional investors holding around CNY 3.9 trillion by August 2025, and the **Swap Connect** quota was raised from CNY 20 billion to CNY 45 billion on 25 September 2025 ([Caixin](https://www.caixinglobal.com/2025-09-25/china-more-than-doubles-daily-quota-for-northbound-swap-connect-102366051.html)). **Strategic investment:** the Measures effective 2 December 2024 cut the asset threshold to **$50 million of own assets or $300 million under management**, removed the 10% minimum stake, and shortened the lock-up to **12 months** ([MOFCOM](https://www.mofcom.gov.cn/zfxxgk/zc/gz/art/2024/art_a57a6bc86507426abf307acfb5fa5da9.html)).

There are no formal repatriation quotas, but frictions remain: tax clearance on the remittance of profit, and unresolved VAT treatment on conversion.

| Income of a foreign investor | Treatment | Authority and term |
| --- | --- | --- |
| Capital gain on A-shares through Stock Connect | **Exempt** from income tax and VAT | Caishui No. 81 (2014), **indefinite** |
| Capital gain under QFII/RQFII | **Exempt** from income tax | Caishui No. 79 (2014), **indefinite** |
| Dividends on A-shares | **10% withholding tax** | Treaty reduction possible — see [withholding tax](https://wiki.private.law/en/withholding-tax) |
| Interest income on bonds | Exempt from income tax and VAT | **01.01.2026 – 31.12.2027**; excludes income of a permanent establishment |
| CDR | Relief for individuals, funds and QFII | Announcement 2026 No. 8, **until 31.12.2027** |

The tax dates are reported by [Xinhua, 15.01.2026](http://www.news.cn/20260115/a673f4cb2b4a43918d93a24bf69dfb00/c.html) and the [Shanghai Tax Service](https://shanghai.chinatax.gov.cn/zcfw/zcfgk/zzs/202601/t479064.html). The bond and CDR reliefs expire on **31 December 2027**; the exemption on [capital gains](https://wiki.private.law/en/capital-gains-tax) from shares is indefinite.

## Risks and constraints

The principal risk of a mainland listing is structural: the issuer takes on obligations that do not exist in other Asian jurisdictions, and cannot shed them after the offering.

**The admission perimeter.** The business of a company with foreign participation is checked against the negative list, control transactions are checked under the national security review, and STAR cuts out real estate and financial services regardless of the numbers.

**The sanctions perimeter** operates outside Chinese law and from both directions: the chain of beneficiaries and counterparties passes [screening](https://wiki.private.law/en/sanctions-screening) at the auditor, the sponsor and the banks, together with [source of funds](https://wiki.private.law/en/source-of-funds), while the investor is constrained by their own jurisdiction's prohibitions on holding the securities of particular issuers.

**Intermediary selection and post-listing duties.** Sponsor liability and mandatory co-investment on STAR mean the sponsor filters candidates more harshly than the regulator does. After listing, the ST dividend trigger, the 36-month lock-up and three years of sponsor supervision remain in place; and the renminbi raised stays renminbi — constrained repatriation is precisely why nobody has issued a CDR in seven years.

## What changed in 2024–2026

A summary of the regulatory shifts that define the regime as at September 2026.

| Date | Change | Effect |
| --- | --- | --- |
| **12.04.2024** | State Council "New Nine Articles" | Tight control of admission, blacklists for intermediaries, liability for auditors and lawyers |
| **30.04.2024** | SSE: Main Board and STAR criteria tightened | Last-year profit CNY 60 → **100 million**, cash flow CNY 100 → **200 million**; on STAR, patents 5 → **7**, R&D CNY 60 → **80 million**, CAGR 20% → **25%** |
| **02.12.2024** | Measures on foreign strategic investment | Asset threshold halved, lock-up 3 years → **12 months**, foreign individuals admitted |
| **01.01.2025** | ST dividend trigger | Dividends below 30% of average profit and below CNY 50 million over 3 years bring an ST flag |
| **15.02.2025** | Regulation on intermediary fees | **Success fees banned**, along with regional IPO subsidies |
| **18.06.2025** | CSRC "1+6" package, STAR Growth Tier | **Fifth standard reactivated** after a two-year pause |
| **14–15.01.2026** | Tax reliefs extended | CDR regime and the exemption on non-resident interest income run **until 31.12.2027** |
| **17.06.2026** | SSE Guidance No. 10 on large AI model companies | Fifth standard extended to LLM developers with no revenue |

## Who this route is open to

A mainland listing is an instrument for a business whose operations, revenue and tax history sit inside the PRC.

The route is open to three categories: a Chinese operating company that clears the numbers under one of the standards; a joint-stock company with foreign participation, provided the business passes the negative list and the ownership survives the requirement of unchanged control; and a red-chip holding company from CNY 10 billion of capitalisation. It is closed to a foreign company without Chinese assets, to a technology business worth less than CNY 1 billion, and to anyone expecting to be done within a year.

For an owner of capital the picture is better. The December 2024 easing admitted foreign individuals to strategic investment and cut the lock-up by two thirds, so the binding constraint is now the exit rather than the entry. The alternatives to the mainland: for an issuer, Hong Kong with direct admission and the 18A and 18C regimes; for a renminbi borrower, the interbank panda bond market; for an investor, Stock Connect and QFII (see the [investor hub](https://wiki.private.law/en/investor-hub)).

## Q/A

### Can a foreign company list on the Shanghai Stock Exchange?

No: direct listing by a foreign issuer does not exist on the SSE or the SZSE — the PRC Securities Law recognises only issuers incorporated under Chinese law. Two workarounds are formally open: a CDR under the mutual-receipt mechanism with the exchanges of the United Kingdom, Switzerland and Germany, which nobody has used in seven years, and a red-chip listing from CNY 10 billion of capitalisation.

### What are the STAR Market requirements under the fifth listing standard?

Expected market capitalisation of at least CNY 4 billion, with no profit and no revenue required at all; what is required is product approval by a state authority, and for pharmaceuticals a drug in Phase II clinical trials. The standard was frozen from June 2023 and reactivated by the CSRC "1+6" package on 18 June 2025.

### How much does an IPO in China cost and how long does it take?

Average expenses are CNY 80.6 million, or 11.15% of the amount raised, of which roughly 70% goes to underwriting and the sponsor (183 offerings, January 2025 to 17 June 2026). Elapsed time from acceptance of the application to listing runs 193 days on the Main Board and 403 days on STAR; the full horizon is 2.5 to 4 years.

### What did the CSRC 2023 filing regime change for GDRs?

It turned the GDR from a fast channel into a full registration procedure: the "green corridor" was abolished, an A-share capitalisation threshold of CNY 20 billion averaged over 120 trading days was introduced, and at least one year of prior listing is now required. Documents go to the CSRC within three working days of filing with the overseas regulator, the price is capped at 90% of the 20-day average close, and conversion is barred for 120 days. The result was 16 withdrawn plans across 2023–2024.

### Can a foreign investor buy STAR Market shares?

Through Stock Connect, only if the investor qualifies as an institutional professional investor, notwithstanding the board's inclusion in the mechanism on 1 February 2021. The alternatives are QFII/RQFII, where quotas were abolished on 1 November 2020, or fund wrappers.

### Can a foreign issuer sell renminbi bonds on the Shanghai Stock Exchange?

Legally yes, in practice almost nobody does: the exchange accounts for about 0.7% of 2026 panda bond issuance against 99.3% on the interbank market. The one notable exchange precedent is RUSAL in March 2017.

> 🍓 The Shanghai Stock Exchange is not a venue for a foreign issuer: direct listing is closed by statute, the inbound leg of the CDR mechanism has not been used once in seven years, and the exchange panda route collects less than one percent of non-resident renminbi debt. Chinese businesses come to the SSE or STAR on the numbers set by the standards tightened in April 2024, over a 2.5-to-4-year horizon and at a cost of roughly 11% of the amount raised. An offshore holding company with Chinese assets returns to STAR as a red-chip from CNY 10 billion of capitalisation, or through a CDR where a VIE is involved. Foreign capital enters here as an investor, not as an issuer. Everything else is settled in Hong Kong.

---

## Factual claims

- At 31 December 2025 the SSE held 2,340 companies and CNY 64.78 trillion of capitalisation, the SZSE 2,887 and CNY 43.24 trillion, and the Beijing Stock Exchange 288 and CNY 0.87 trillion (Baker McKenzie).
- The five criteria sets in Article 2.1.2 of the STAR Listing Rules are the only construction in the PRC where market capitalisation substitutes for profit and revenue in full.
- The Hong Kong profit gate follows Chapter 8 of the HKEX Listing Rules: the profit test has been in force in this form since 1 January 2022, while the rest of the chapter has been rewritten more than once since.
- Preparation, 12 to 24 months.
- Rejections, 2024 to 2026. In 2025 the exchanges accepted 300 applications, 115 companies listed, and 108 processes were terminated, of which 101 were voluntary withdrawals — 75% fewer than in 2024 (Sina Finance).
- The innovative-enterprise and red-chip pilot rests on State Council Notice 2018 No. 21 and CSRC announcements 2020 No. 20 and 2021 No. 20 (CSRC).
- The mechanism launched on 17 June 2019 as the Shanghai–London Stock Connect, and in February 2022 the CSRC extended it to Switzerland and Germany.
- The comparison uses the SSE consultation of 02.06.2023 and analyses by Han Kun and Zhong Lun.

---

Source: wiki.private.law — the private.law legal knowledge base. When quoting, cite the canonical page URL.
Consultation with a lawyer: https://t.me/private_law_bot