Temple Students Publish Studies of Business Law in China

The 10-Q has recently published several articles about doing business in China. Temple Law Professor Tarrant Mahony discussed the passage of a new foreign investment law in China. Temple Law Professor Mo Zhang discussed his forthcoming paper in the San Diego International Law Journal regarding the enforcement of foreign arbitral awards in China. Temple Law students have also been looking at the legal aspects of doing business in China. Below are abstracts for papers recently published in the Temple International and Comparative Law Journal written by Temple Law students further discussing legal developments in China.

Alibaba’s VIE Structure and Erosion of BEPS Goals in China’s E-Commerce Industry

By: MacKensie Larson

Alibaba stands as China’s underdog success story in the e-commerce industry, yet much remains unexplored about the consequences of its unique Variable Interest Entity (VIE) structure. Chinese e-commerce companies turned to the VIE structure as a means to circumnavigate China’s restrictions against foreign ownership. The VIE structure operates through a network of contracts between China and an offshore entity based in a low-tax jurisdiction. The VIE structure poses many legal uncertainties, and this Note addresses its ambiguous tax consequences through an analysis of the base-erosion and profit shifting (BEPS) Action Plans and their application to Alibaba’s VIE structure.

In 2013, the Organisation for Economic Co-Operation and Development (OECD) announced its fifteen Action Plans to eliminate BEPS harmful tax practices among multinational enterprises. This Note addresses how the VIE structure exacerbates the use of tax havens (Action 5), illegal transfer pricing (Actions 8–10), and permanent establishment distortion (Action 7), thereby undermining the specific actions pronounced in BEPS. This Note argues thexat the tax implications from China’s VIE structure are incompatible with the aims of BEPS and offers suggestions for China and the international community to close this tax loophole. This Note asserts that a “wait and see” approach for the validity of VIEs is destined to fail and risks delegitimizing the BEPS Action Plans.

Alibaba’s VIE Structure and Erosion of BEPS Goals in China’s E-Commerce Industry was published in Volume 33 of the Temple International and Comparative Law Journal. The full article is available here.


MacKensie Larson recently graduated from Temple University Beasley School of Law in May 2019. She will begin working this fall as an international trade attorney at Trade Pacific PLLC in Washington, D.C. She served as the Executive Editor of the Temple International and Comparative Law Journal for the 2018-2019 academic year.

Strategies for Asset Recovery from Mainland China

By: Henry Longley

China is forging itself into a global financial center for investment and slowly retooling its courts to handle cross-border civil and commercial disputes. But China currently lacks an adequate legal infrastructure necessary to assure non-Chinese investors of their substantive rights. China’s attractively high growth investment opportunities combined with the absence of much needed legal remedies have been a recipe for massive investor losses. Facing the great legal uncertainty, practitioners have developed innovative equity and debt holder strategies for asset recovery from Mainland China.

This Comment provides an analytic review of these strategies. It focuses on the use of equitable receivers to control onshore assets through offshore corporate structures and a judgment recognition and enforcement mechanism that relies on treaties or de facto reciprocity with China. The Comment also discusses the emergence of the Chinese judiciary’s quasi-lawmaking power through development of the Guiding Cases system—a case-based framework that implicates the notion of judicial precedent in China. There is a hope that the guiding cases could improve the efficacy of Chinese courts in deciding cross-border disputes and provide foreign investors with greater legal assurance by giving precedential value to cases that enforce investor rights.

Strategies for Asset Recovery from Mainland China was published in Volume 33 of the Temple International and Comparative Law Journal. The full article is available here.


Henry Longley is a law student in the evening division at Temple University Beasley School of Law and a member of the class of 2020. He works in the financial services industry as a credit strategy analyst on governance related issues. He was a Note and Comment Editor on the Temple International and Comparative Law Journal.