V.I.E. Legal Structure

Explanation Note:

  1. A VIE structure, known as the Variable Interest Entity, is regarded as a series of corporate contractual arrangement.
  2. Under an VIE arrangement, the founder controls a domestic operating entity via certain offshore entities which further sets up a wholly foreign owned entity (“WFOE”). The WFOE controls the domestic operating entity (“Operating Entity”) by entering into a series of exclusive contractual obligations with the Operating Entity.
  3. Most of the revenues and/or profits of the Domestic Company will flow up to the actual offshore entity and the controlling power of the founder over the Domestic Company will be delegated to the WFOE.
  4. The foreign parent company is usually incorporated in offshore jurisdictions mainly due to their tax-free / tax-incentivize status and established legal system, which in this case, DSTE Capital LTD. being an incorporated entity established under the laws of Labuan.
  5. As DSTE Capital LTD.’s main vision is to be listed in one of the prestigious capital markets, the proposed VIE structure serves as a main vehicle designed to be a listing entity and would be able to attract foreign investors as well. The number of companies in each layer is not necessarily one, but rather two or more companies may coexist. In addition, subject to further revision by the management team, shell companies may stand between the layers.
  6. DSTE Capital LTD. foresees that the actual operation in the industry of agricultural with the aid of emerging technology may involving complicated legal considerations or restrictions, these became one of the factors that invite DSTE Capital LTD. to considering adopting an VIE structure.
  7. To such extent, DSTE Capital LTD. has engaged Messrs. Marcus Tan & Co, a legal firm in the Federal Territory of Kuala Lumpur that focusing in corporate and emerging technology laws to assist DSTE Capital LTD. in structuring the VIE in accordance to the laws that governing DSTE Capital LTD.
    DSTE V.I.E. Legal Advisor : https://www.mtco.my/.
  8. Kindly take note that this Explanation Note does not serves as a formal legal opinion, information memorandum, prospectus, any offer or invitation to solicit, attract or obtain investment from the public, but merely an explanation on the proposed VIE structure that DSTE Capital LTD. is considering adopting.
  9. Kindly take further note that DSTE Capital LTD. reserves its absolute rights and discretion to revise, amend and/or alter the proposed VIE structure aforementioned from time to time. Any update or information would only be published on the official website of DSTE Capital LTD. at https://www.dste-smartfarming.com.
  10. Your attention is also being drawn to the Disclaimer that DSTE Capital LTD. has issued pertaining to fictitious announcements or solicitations of investment and to the prevalence of possible fraudulent activity purportedly under the name and project of DSTE Capital LTD. The Disclaimer could be viewed at https://www.dste-smartfarming.com/disclaimer.

Issued by the management of

DSTE Capital LTD.

19 August 2019

Explanation Note:

  1. A VIE structure, known as the Variable Interest Entity, is regarded as a series of corporate contractual arrangement.
  2. Under an VIE arrangement, the founder controls a domestic operating entity via certain offshore entities which further sets up a wholly foreign owned entity (“WFOE”). The WFOE controls the domestic operating entity (“Operating Entity”) by entering into a series of exclusive contractual obligations with the Operating Entity.
  3. Most of the revenues and/or profits of the Domestic Company will flow up to the actual offshore entity and the controlling power of the founder over the Domestic Company will be delegated to the WFOE.
  4. The foreign parent company is usually incorporated in offshore jurisdictions mainly due to their tax-free / tax-incentivize status and established legal system, which in this case, DSTE Capital LTD. being an incorporated entity established under the laws of Labuan.
  5. As DSTE Capital LTD.’s main vision is to be listed in one of the prestigious capital markets, the proposed VIE structure serves as a main vehicle designed to be a listing entity and would be able to attract foreign investors as well. The number of companies in each layer is not necessarily one, but rather two or more companies may coexist. In addition, subject to further revision by the management team, shell companies may stand between the layers.
  6. DSTE Capital LTD. foresees that the actual operation in the industry of agricultural with the aid of emerging technology may involving complicated legal considerations or restrictions, these became one of the factors that invite DSTE Capital LTD. to considering adopting an VIE structure.
  7. To such extent, DSTE Capital LTD. has engaged Messrs. Marcus Tan & Co, a legal firm in the Federal Territory of Kuala Lumpur that focusing in corporate and emerging technology laws to assist DSTE Capital LTD. in structuring the VIE in accordance to the laws that governing DSTE Capital LTD.
    DSTE V.I.E. Legal Advisor : https://www.mtco.my/.
  8. Kindly take note that this Explanation Note does not serves as a formal legal opinion, information memorandum, prospectus, any offer or invitation to solicit, attract or obtain investment from the public, but merely an explanation on the proposed VIE structure that DSTE Capital LTD. is considering adopting.
  9. Kindly take further note that DSTE Capital LTD. reserves its absolute rights and discretion to revise, amend and/or alter the proposed VIE structure aforementioned from time to time. Any update or information would only be published on the official website of DSTE Capital LTD. at https://www.dste-smartfarming.com.
  10. Your attention is also being drawn to the Disclaimer that DSTE Capital LTD. has issued pertaining to fictitious announcements or solicitations of investment and to the prevalence of possible fraudulent activity purportedly under the name and project of DSTE Capital LTD. The Disclaimer could be viewed at https://www.dste-smartfarming.com/disclaimer.

Issued by the management of

DSTE Capital LTD.

19 August 2019

Contact Us

Address:

Level 9F-02, Main Office Tower, Financial Park Labuan,Jalan Merdeka, 87000 Federal Territory of Labuan, Malaysia.

Email:

admin@dste-smartfarming.com

Phone:

+603-76219287

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