Nanpi China based in Hebei Province of China manufactures EUV lithography systems that are used in the manufacture of microchips. Nanpi China is a wholly owned by Nanpi Holding Limited which is domiciled in the Cayman Islands (the Caribbean). Nanpi Holding Limited is considering listing on foreign stock exchanges.

In 2020, after decidingagainst listing on the Shenzhen exchange, it short-listed the Hong Kong Stock Exchange (HKSE) and NASDAQ as itspreferred listing venues. It has hit a stumbling block in its bid to list on the HKSE. Its application was denied as Nanpi proposed to haveacorporate governance structure with dual class shares Class A shares had 1 vote per share and Class B shares controlled by the CEO and co-founders had 10 votes per share though cash flow rights (i.e., dividends etc) are identical. Despite Hong Kongs company laws allowing the issuance of dual class shares, HKSE has been rejecting listing applications with this voting structure. Nanpi Holding is now considering listing on the NASDAQ where one of its main competitors, ASML Holding NV, is also listed.

The Chinese government restricts direct foreign ownership in firms in sectors thatitconsiders to beofcritical importance(e.g., internet service providers, financial firms). Due tothisforeign ownership restriction, Cayman Islands based Nanpi Holding Limited and its (future) shareholders will not own the assets (e.g., patents) of Nanpi China. These assets are solely owned by an operating company, Fu Heng Limited,owned by the Frances Fu and Zin Yau Heng, the cofounders. However, Nanpi Holding Limited has effective control on these assets through an agreement reached with Fu Heng Limited. This agreement would let Nanpi Holding Limiteds foreign shareholders (the owners) benefit from the profits, but they will not own the assets in China.

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