Pop Mart's Overseas Success: A Deep Dive into Its Corporate Structure

As a leader in China's trendy toy industry, Pop Mart (09992.HK) has grown into a publicly listed company with a market cap exceeding CNY 300 billion. Its equity structure has evolved from a simple early-stage setup into a multi-tiered system that ensures legal compliance, tax efficiency, and capital attraction. This article breaks down the evolution and strategic design of its framework.

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Three-Tier Offshore Structure

After delisting from China’s New Third Board in 2019, Pop Mart established a classic offshore structure for its Hong Kong IPO:Cayman listed entity → BVI holding platform → Hong Kong subsidiary → WFOE (Beijing Pop Mart) → VIE-controlled Shanghai Paqu Interactive

This structure was not just for listing purposes but served deeper tax optimization and capital operation strategies.

Tax Efficiency

Dividend Tax Benefits

Dividends from the WFOE to the Hong Kong company incur only a 5% withholding tax (vs. China’s standard 10%).

Dividends from the Hong Kong company to the Cayman entity are tax-free (0%).

Capital Gains Tax Exemption

The Cayman Islands impose no capital gains tax, allowing shareholders to sell shares tax-free, maximizing investor returns.

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Capital Attraction

Overseas Listing

Offshore companies (e.g., Hong Kong, Cayman) enable global business flexibility, attracting international investors and strategic partners.

Fund Deployment

Post-fundraising, capital can flow into the WFOE via Hong Kong, bypassing China’s strict forex controls while supporting expansion.

Global Investor Appeal

Offshore structures align with international investor preferences, facilitating PE/VC investments, strategic partnerships, and corporate bond issuance.

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Legal & Risk Mitigation

Policy Compliance

For sectors with foreign ownership restrictions (e.g., internet, education, media), the VIE structure uses contractual control instead of equity, legally bypassing barriers.

Asset Protection

Offshore entities act as independent legal persons, insulating overseas assets from domestic policy risks.

Privacy Safeguards

Jurisdictions like Cayman and Hong Kong offer strong shareholder confidentiality, ideal for high-net-worth individuals or family asset planning.

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Facilitating Global Expansion

This framework not only navigates regulatory hurdles and cuts tax costs but also unlocks global capital markets for efficient financing and worldwide operations.

In 2024, Pop Mart accelerated its global push, opening its first physical stores in Vietnam, Indonesia, the Philippines, Italy, and Spain—solidifying its international presence.

CEO Wang Ning noted:

Southeast Asia sales surged 619.1% last year, but North America also grew rapidly at 556.9%. Q1 U.S. revenue has already surpassed full-year 2023 figures.

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Conclusion

Pop Mart’s equity structure exemplifies a "tax + capital leverage" balancing act. For companies eyeing global expansion or IPO, leveraging Cayman, Hong Kong, or BVI structures is a strategic imperative.