Imagine your family loves fine dining. Not just any dining, but the pinnacle of culinary art. So, you do what any ultra-wealthy family would: you build an exclusive “private kitchen” in your estate. You fly in the master chefs from Da Dong for their legendary Peking duck and hire the team from Li Family Cuisine…

1. What Is the “334” Strategy? The so-called “334” strategy involves using a holding company to allocate shares roughly at 33%, 34%, and 33% among three or more investors, thereby preventing any single party from holding over 35% of the shares. This arrangement aims not only to avoid the need for a substantial shareholder approval…

Introduction Many investors mistakenly believe that by registering a holding company in places like the Cayman Islands or British Virgin Islands (BVI), and then having this holding company own a Hong Kong licensed corporation (commonly known as Type 1, 4, or 9 license), they can bypass the major shareholder approval process of the Hong Kong…

Preface In Hong Kong’s financial market, licensed corporations (commonly known as Type 1, Type 4, and Type 9 licenses) are often viewed as assets with “built-in credibility” due to strict regulation by the Securities and Futures Commission (SFC). However, the SFC also maintains rigorous scrutiny over shareholding structures and major shareholders’ qualifications. As a result,…

Preface Besides the “334” strategy, many other “clever” approaches circulate in the market that attempt to avoid SFC approval for major shareholders, such as splitting shareholdings into numerous small portions below 10%, or diluting actual control through multiple layers of offshore companies. This article will explore several common cases and explain how these methods are…