Is It Mandatory to Register a Company in the U.S. for U.S. Listing? A Deep Dive Analysis

Is It Necessary to Register a Company in the U.S. for a U.S. IPO? A Comprehensive Analysis

In recent years, with the deepening integration of global capital markets, an increasing number of Chinese companies have chosen to list in the United States to access broader financing channels and enhance their international brand recognition. Particularly in 2025, several Chinese tech companies, including XPeng Motors, Zhihu, and Full Truck Alliance, successfully listed on U.S. capital markets, sparking widespread discussions on whether it is mandatory for companies to register in the U.S. to go public there.

I. Basic Paths to a U.S. IPO

The U.S. securities market is one of the most attractive capital markets globally, with the New York Stock Exchange NYSE and NASDAQ attracting companies from around the world. For foreign companies seeking a U.S. listing, there are primarily two routes a direct Initial Public Offering IPO or an indirect listing through American Depositary Receipts ADRs.

Under the direct IPO model, companies must comply with the regulatory requirements of the U.S. Securities and Exchange Commission SEC, including financial disclosure, corporate governance, and internal control standards. In contrast, the ADR model allows companies to issue depositary receipts representing their shares through a custodian bank, which are then traded in the U.S. market.

II. Is U.S. Company Registration Mandatory?

This is a core question for many business owners. The answer is not necessarily. According to the SEC, companies from any country can list in the U.S. as long as they meet the relevant legal and regulatory requirements. This means that it is not compulsory for a company to be registered in the U.S.

For example, many Chinese companies establish holding companies in jurisdictions like the Cayman Islands or the British Virgin Islands and then use these entities to apply for listing in the U.S. This structure is commonly referred to as the Red Chip framework. Take a well-known Chinese new energy enterprise that listed in 2025 as an example its parent company was registered in mainland China, but it successfully completed an IPO on NASDAQ by setting up an offshore holding company in the Cayman Islands. This approach not only circumvents certain regulatory restrictions but also facilitates international capital operations.

III. Why Do Many Companies Choose Offshore Registration?

Although the U.S. does not impose a registration requirement, many non-U.S. companies opt to establish listing entities in offshore financial centers such as the Cayman Islands and Bermuda. There are several reasons behind this trend

1. Tax Advantages These jurisdictions often offer low or zero corporate tax rates, helping to reduce the overall tax burden.

2. Flexible Legal Environment Compared to the complex regulatory systems in their home countries, offshore jurisdictions typically have more lenient company laws, making it easier to design equity structures and manage capital.

3. Avoiding Domestic Approval Barriers Listing directly in the U.S. from China requires approval from multiple domestic authorities, including the China Securities Regulatory Commission CSRC, a process that can be lengthy and complex. Using an offshore holding company can streamline the process.

4. Attracting International Investors Offshore entities are often more appealing to international investors, especially in the eyes of U.S. investors who tend to favor offshore companies that are clear in structure and transparent in compliance.

IV. Regulatory Trends and Risk Warnings

Despite the openness of the U.S. capital markets, recent years have seen growing tensions between China and the U.S. over audit oversight and information disclosure, creating uncertainty for companies listing in the U.S. In 2025, the U.S. passed the Holding Foreign Companies Accountable Act HFCAA, requiring listed foreign companies to submit audit working papers or face potential delisting. This has prompted many companies to reassess the pros and cons of a U.S. listing.

However, with the recent progress in Sino-U.S. audit regulatory cooperation, some companies have renewed their interest in listing in the U.S. This development reminds us that a U.S. IPO is not just a legal and financial decision but also a strategic one.

V. Case Study A Chinese E-commerce Giant

Take the example of a well-known Chinese e-commerce platform that listed on NASDAQ in 2025 via a Cayman entity, raising over $1 billion. Prior to the IPO, the company completed multiple rounds of financing and attracted several international investors, ultimately achieving a successful U.S. listing. Key to its success were

A well-structured equity framework

A robust financial disclosure mechanism

Efficient collaboration with international investment banks and law firms

A deep understanding of U.S. regulatory requirements

This case demonstrates that even without being registered in the U.S., companies can still gain recognition in the U.S. capital markets as long as they meet SEC requirements.

VI. Conclusion

Listing in the U.S. does not require a company to be registered in the United States. By designing an appropriate equity structure, selecting a suitable offshore jurisdiction, and meeting SEC requirements, companies can achieve a U.S. listing without changing their original place of registration.

At the same time, companies must remain vigilant about evolving international regulatory environments and prepare risk mitigation strategies to ensure long-term stability and growth. In today’s complex global landscape-where globalization and de-globalization coexist-a U.S. listing remains a vital stepping stone for Chinese companies aiming to expand globally. Striking the right balance between compliance and efficiency will be a critical challenge for any company pursuing overseas financing.