An entity where an investor has a controlling interest that is not based on holding the majority of voting rights. VIEs are used widely in China, particularly when a company that intends to list operates in a sector in which foreign investment is restricted, and are particularly common in the technology, telecommunications and media sectors. The operating company undertaking the business is included in consolidated financial statements because it is controlled through contracts, usually with a wholly foreign-owned enterprise (WFOE) subsidiary of the offshore controller, rather than the more conventional control that is obtained through ownership.

For detailed information, see Practice note, Variable interest entity (VIE) structures in China.