English-Law Due Diligence for IPOs: A UK Solicitor's Guide for HKSE, SSE, SZSE, BSE, TWSE and TPEx

A Chinese-headquartered group preparing to list on a Chinese, Hong Kong or Taiwanese stock exchange will require English-law due diligence and a legal opinion on its UK operating subsidiaries. This guide explains the regulatory framework on each of the relevant exchanges, the standard scope of the legal opinion, the cross-border practice issues that recur, and the conventions applied to English-law opinions in this work. Authored by Leon Chua, Partner at Duan & Duan UK LLP.

1. Overview — what UK-side legal due diligence is for

A Chinese-headquartered group with UK operating subsidiaries that is preparing for an IPO on the Hong Kong, Shanghai, Shenzhen, Beijing, Taiwan or Taipei exchanges must address the regulatory framework of the chosen exchange. Three constants run across all of them:

1. Disclosure. The prospectus must accurately disclose the legal position of the group's material subsidiaries — including those in the United Kingdom.
2. Sponsor due diligence. A regulated sponsor (or PRC-equivalent intermediary) is responsible for conducting and verifying the due diligence underlying the prospectus. The sponsor in turn relies on local counsel — including UK counsel for UK subsidiaries.
3. Legal opinion. A formal legal opinion addressed to the issuer, the sponsor and (where required) the exchange/regulator, setting out specified legal conclusions about each material subsidiary, is conventionally given by counsel of the relevant jurisdiction. For UK subsidiaries this is the English-law legal opinion.

UK-side legal due diligence is the workstream that delivers (i) a long-form due diligence report on the UK operating subsidiary, and (ii) a legal opinion in a form acceptable to the sponsor and the regulator.

2. The exchanges — regulatory framework

Hong Kong Stock Exchange (HKSE)

Main Board. Qualifications for listing are set out in Chapter 8 of the HKEX Main Board Listing Rules. The three financial eligibility tests under Rule 8.05, unchanged since the 1 January 2022 increase, are:

• Profit test: profit attributable to shareholders ≥ HK$35 million (most recent year) and ≥ HK$45 million aggregate (two preceding years); market capitalisation ≥ HK$500 million;
• Market cap / revenue / cashflow test: market cap ≥ HK$2 billion; revenue ≥ HK$500 million (most recent year); operating cashflow ≥ HK$100 million aggregate (three preceding years); and
• Market cap / revenue test: market cap ≥ HK$4 billion; revenue ≥ HK$500 million (most recent year).

Sponsors regime. Chapter 3A of the HKEX Main Board Listing Rules — its full title is "Sponsors, Compliance Advisers, Overall Coordinators and Other Capital Market Intermediaries", expanded under the 2022 capital market intermediaries amendments — sets out the sponsor's listing-rule obligations. The parallel regulatory regime is paragraph 17 of the SFC Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission, which since 1 October 2013 has codified the enhanced sponsor due diligence standard.

Prospectus contents. Appendix 1, Part A of the Main Board Listing Rules sets out the contents required of a listing document for new applicants.

Specialist regimes within HKSE Main Board.

• Chapter 18A — Biotech Companies. The pre-revenue biotech regime allowing biotech companies to list without a track record of revenue, subject to specific suitability criteria. In force since 30 April 2018.
• Chapter 18B — Special Purpose Acquisition Companies (SPACs). The HKEX SPAC regime, in force from 1 January 2022.
• Chapter 18C — Specialist Technology Companies. The alternative regime for specialist technology companies (commercial and pre-commercial) across five designated frontier industries. In force from 31 March 2023.

GEM. The Growth Enterprise Market continues to operate as a separate market with its own rulebook. The GEM reforms in force from 1 January 2024 introduced a streamlined transfer mechanism from GEM to Main Board, an additional financial eligibility test for high-growth R&D-intensive issuers, a 12-month post-IPO controlling-shareholder lock-up (reduced from 24 months and aligned with the Main Board), and removal of mandatory quarterly reporting. GEM was not abolished.

Shanghai Stock Exchange (SSE)

The 2023 registration-based reform. The SSE Main Board moved to a full registration-based regime ("全面注册制") with effect from 17 February 2023. The overarching CSRC framework is the Measures for the Administration of the Registration of Initial Public Offerings (《首次公开发行股票注册管理办法》), with the exchange-level rulebook being the Rules Governing the Listing of Stocks on the Shanghai Stock Exchange (2023 Revision).

STAR Market (科创板). Launched on the SSE in July 2019 as the pilot for the registration-based system, the STAR Market is for technology and innovation-driven companies. It has been integrated under the post-2023 framework alongside the SSE Main Board.

Sponsor due diligence under PRC law. The CSRC Measures for the Administration of Sponsoring Business for Securities Issuance and Listing (《证券发行上市保荐业务管理办法》) governs the conduct and obligations of PRC sponsors on A-share IPOs. UK counsel typically interfaces with the PRC sponsor and reporting accountants on the UK-side workstream.

Shenzhen Stock Exchange (SZSE)

Main Board. Operates under the equivalent post-2023 registration-based framework, with the exchange-level rulebook being the Rules Governing the Listing of Stocks on the Shenzhen Stock Exchange.

ChiNext (创业板). The high-growth and innovation-driven board on the SZSE. Post the 2023 registration-based reform, the applicable rulebook is the Rules Governing the Listing of Stocks on the ChiNext Market of the Shenzhen Stock Exchange (2023 Revision). ChiNext applies diversified eligibility standards designed to support unprofitable innovative issuers, and operates under a 20% daily price-limit regime.

Beijing Stock Exchange (BSE)

The BSE was launched on 15 November 2021 as a market for innovative SMEs (创新型中小企业). It has its own listing rules issued under CSRC supervision. Since 2024–2025 BSE-listed securities have used a distinguishing "920" stock-code series to differentiate them from SSE/SZSE securities. The CSRC's February 2024 Action Plan tightened quality standards across all boards, with the practical effect of channelling more issuers towards the BSE.

Taiwan Stock Exchange (TWSE)

Listings are governed by the Taiwan Stock Exchange Corporation Rules Governing Review of Securities Listings. The Financial Supervisory Commission (FSC) is the primary regulator and approves listings on a take-into-record basis after TWSE review. The TWSE board-approved amendments of November 2024 (effective in early 2025) further liberalised listing rules to enhance Taiwan's positioning as a regional capital market.

Taipei Exchange (TPEx)

The TPEx is a separate exchange focused on SMEs and emerging-growth companies. Two sub-tiers historically operated within its Emerging Stock Market: the Pioneer Stock Board (PSB) for innovative startups, and the Emerging Stock Board (ESB) for pre-IPO registered trading. The principal TPEx listed market is a distinct tier governed by its own rulebook. Under the reforms in force from 1 January 2024 the PSB and ESB were consolidated back into a single Emerging Stock Market (ESM). Listing standards are set out in the TPEx Rules Governing the Review of Securities Traded on the Taipei Exchange. The FSC is the overarching regulator.

3. The standard scope of the English-law legal opinion

The legal opinion on a UK operating subsidiary, as conventionally given on cross-border IPOs to PRC, HK and Taiwanese exchanges, addresses the following heads:

1. Corporate structure and capacity. Due incorporation; status as a private limited company under the Companies Act 2006; subsistence as at the opinion date; capacity and corporate authority to carry on its business.

2. Share capital and allotments. Share capital structure as recorded at Companies House; allotments and transfers since incorporation; pre-emption rights and any waivers.

3. Constitutional documents. Articles of association; any shareholders' agreement; any restrictions on transfers, on issue of further shares, or on the conduct of business.

4. Material contracts. Identification, review and characterisation of the UK subsidiary's material contracts; change-of-control provisions; consents required for the listing.

5. Real estate. Freehold and leasehold interests; the principal lease covenants and any consents required for the listing.

6. Intellectual property. Registered IP (UK and EU trade marks, patents, registered designs); unregistered rights; ownership and chain of title; licences in and out.

7. Employees and pensions. Employment contracts of senior personnel; collective bargaining; auto-enrolment pension scheme; any defined-benefit obligations or unfunded liabilities.

8. Tax (outline only). Outline confirmation of corporation tax filing status; outline VAT, PAYE and NICs position. A specialist UK tax opinion is ordinarily separately obtained.

9. Related-party transactions. Identification of any RPTs in the prior period; assessment against the standard required by the listing rules of the chosen exchange.

10. Litigation and threatened claims. A confirmation as to current litigation, threatened litigation, and material historic claims.

11. Regulatory permissions and licences. Identification of permissions required by the UK subsidiary to carry on its business (sectoral regulators — for example, FCA, Ofcom, MHRA) and confirmation of subsistence.

12. Sanctions and OFAC exposure. UK, EU and OFAC sanctions screening; export-control screening; OFSI considerations. Increasingly a stand-alone head.

13. Data protection. UK GDPR / Data Protection Act 2018 compliance; existence of relevant data-protection impact assessments; international data-transfer mechanisms.

14. Economic crime and corporate transparency. Position under the Economic Crime and Corporate Transparency Act 2023, including PSC compliance, beneficial-ownership disclosure, identity verification of directors, and registered office requirements.

15. Environmental matters. Outline confirmation of compliance with applicable environmental statutes and regulations (Environmental Permitting (England and Wales) Regulations 2016, Environment Act 2021, etc.) where relevant to the UK subsidiary's operations.

16. Listing-specific compliance assessment. Specific confirmation of compliance with those provisions of the listing rules of the chosen exchange that depend on UK law (for example, valid existence under the laws of England and Wales as required by some listing rules; specific change-of-control compliance points).

The opinion is given subject to standard assumptions, qualifications and limitations consistent with the City of London Law Society (CLLS) Guide to Legal Opinions on English Law in Financial Transactions (most recently updated 2018) and, on cross-border conventions, the IBA/ABA Good Practice Principles for Cross-Border Closing Opinions (approved IBA Banking & Financial Law Committee, November 2023). The 1991 "Legal Opinion Accord" sometimes cited in older sources is an American Bar Association product and has been substantially superseded for current cross-border opinion practice.

4. The long-form due diligence report

Distinct from the legal opinion is the long-form due diligence report, a factual report setting out what the UK solicitors have found across each due-diligence head. Standard contents:

• Executive summary of issues identified and risk-rated.
• Corporate review — Companies House filings, articles, shareholders' agreement.
• Commercial review — material contracts, changes of control, consents required.
• Real estate — title and lease summaries.
• IP — registered rights, ownership, licences.
• Employment — senior service agreements, restrictive covenants, TUPE history.
• Litigation — current and threatened claims.
• Regulatory — permissions, licences, compliance history.
• Sanctions / OFAC — counterparty screening; designated-persons checks.
• Data protection — UK GDPR posture.
• Tax (outline) — filing status; outline issues.
• Risk and recommendations — issues for verification, prospectus disclosure, or pre-completion remediation.

The long-form report is the working tool of the sponsor and the issuer. The legal opinion is the formal output relied on by the exchange and regulator.

5. Cross-border practice issues that recur

Six cross-border practice issues arise on most cross-border IPOs of this type:

Sanctions and OFAC. Now a standard head. The PRC issuer's UK counterparty profile — customers, suppliers, banking relationships, shareholders — must be screened against UK, EU and US (OFAC) sanctions lists. Increasing regulatory focus on secondary-sanctions exposure has made this a routine workstream rather than an exceptional one.

Beneficial ownership and PSC compliance. Persons of Significant Control (PSC) compliance under Part 21A of the Companies Act 2006, with the further enhancements under the Economic Crime and Corporate Transparency Act 2023, must be verified for each UK subsidiary. Identity-verification requirements introduced under ECCTA 2023 are progressively being implemented and now form part of the diligence baseline.

UK GDPR. Cross-border data transfers between the UK and PRC are not covered by an adequacy decision and require Standard Contractual Clauses or another transfer mechanism (the UK International Data Transfer Agreement, the UK Addendum to the EU SCCs, or binding corporate rules). Where the PRC parent processes UK personal data, the position should be expressly addressed in due diligence.

Anti-bribery. Bribery Act 2010 exposure and the corporate failure-to-prevent regime under section 7 must be considered.

Tax. UK tax filing status (corporation tax, VAT, PAYE, NICs) must be confirmed. Diverted Profits Tax and transfer-pricing exposures are commonly examined where the UK subsidiary is part of an integrated cross-border group.

Material contracts and change of control. Most material commercial contracts contain change-of-control clauses; the listing itself can engage them. Consent reviews are typically conducted concurrently with the diligence.

6. Coordination with PRC, Hong Kong and Taiwanese counsel

A cross-border IPO is a multi-counsel exercise. UK counsel ordinarily coordinates with:

• PRC counsel (or HK counsel for HKSE listings) representing the issuer and the sponsor on the principal listing jurisdiction;
• Reporting accountants (for HKSE: typically Big Four) on the financial information;
• The sponsor (for HKSE: a SFC Type 6-licensed sponsor; for PRC exchanges: a CSRC-registered sponsor);
• The exchange and regulator, where written submissions or regulator queries arise touching on UK matters; and
• Specialist counsel on tax, IP, real estate, regulatory or sanctions issues where the standard diligence team needs supplementary advice.

The Duan & Duan international network of more than 40 offices supports cross-border coordination where local-jurisdiction support is required.

7. Dual A+H listing

A common structure is a dual A+H listing, where a PRC-incorporated issuer with shares listed on the SSE or SZSE (A-shares) seeks an additional listing of H-shares on the HKSE. The pathway:

• Stock Connect is not a listing route. Stock Connect is a secondary trading channel for Hong Kong-based investors to access A-shares (and vice versa) and does not provide a primary listing pathway.
• A separate H-share listing application is required, complying with the HKEX Main Board Listing Rules and the SFC Code of Conduct.
• CSRC overseas-listing filing is required under the Trial Administrative Measures for Overseas Securities Offering and Listing by Domestic Enterprises (March 2023).
• Fast-track channel. The October 2024 SFC/SEHK Joint Statement introduced a fast-track regulatory review channel for eligible A-share issuers with expected market capitalisation of HK$10 billion or more, with the regulatory review window targeted at 30 business days.
• Minimum H-share size. Effective 2025, the minimum H-share size for A+H issuers was reduced to 10% of the class or HK$3 billion in expected market value (whichever is the lower, subject to specific application).

8. Indicative timeline

A typical cross-border IPO timeline (HKSE Main Board, illustrative):

• Months 1–2: Kick-off; structuring; preliminary due diligence; engagement of sponsor and reporting accountants.
• Months 2–6: Full due diligence (UK and other jurisdictions); first prospectus drafts; verification.
• Months 6–8: Form A1 listing application; HKEX review; rounds of comments.
• Months 8–10: SFC parallel review; pricing committee; bookbuilding.
• Month 10+: Listing.

The English-law due diligence and legal opinion workstream is engaged from Month 1 and finalises in the run-up to the listing date. The legal opinion is typically issued in form acceptable to the sponsor and dated as at the listing date.

9. What we do

Leon Chua, Partner at Duan & Duan UK LLP, leads the firm's capital markets and IPO due diligence practice. Current and recent mandates include:

• HKSE Main Board dual listing of a PRC-headquartered pharmaceutical group's UK operating subsidiary;
• Beijing Stock Exchange listing of a PRC-headquartered clean energy group, with English-law legal opinions on two UK operating subsidiaries;
• SZSE ChiNext / BSE A-share listing of a PRC-headquartered consumer technology group held through a Hong Kong intermediate;
• Taipei Exchange listing of a Taiwan-headquartered industrial computing group's UK subsidiary, coordinating with Taiwanese counsel;
• English-law-aspects of cross-border corporate finance and franchising arrangements associated with listed-group UK expansion.

Services include:

• Initial structuring advice on the UK subsidiary in advance of listing.
• Long-form due diligence reports for sponsor / reporting accountant use.
• Formal English-law legal opinions for inclusion in the prospectus and listing application.
• Pre-listing remediation (corporate tidy-ups, RPT cleansing, share-capital adjustments, contract change-of-control consents).
• Sanctions and OFAC screening and reporting.
• Coordination with PRC, Hong Kong and Taiwanese counsel, sponsors, reporting accountants and regulators.

Consultations are conducted in English. For Mandarin or Cantonese-language matters Leon works with bilingual colleagues across the firm and with the Duan & Duan international network of more than 40 offices.

10. Contact

To instruct the firm or for an initial confidential conversation:

• Telephone: +44 20 3036 0264
• Email: office@duanduanuk.com
• WhatsApp: message us on WhatsApp
• WeChat: scan our QR code or search DuanDuanUKLLP
• In writing: Duan & Duan UK LLP, 2nd Floor East, Goldsmith Building, Middle Temple, London EC4Y 7BL

Initial enquiries are without obligation and treated in strict confidence.

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This guide is published for general information only. It does not constitute legal advice and does not create a solicitor-client relationship. Listing rules and regulatory frameworks are subject to change; the position should be re-checked at the relevant exchange's rulebook page at the date of any application. Duan & Duan UK LLP is a limited liability partnership registered in England and Wales (OC427307) and is authorised and regulated by the Solicitors Regulation Authority (SRA number 659252).