When I last reviewed the themes and trends we are seeing for IPOs of Bermuda and Cayman companies from our office in Hong Kong in mid-2022, it was very much a tale of two cities. Two years later, there is little to indicate that much has changed in this regard, with Hong Kong continuing to struggle against a resurgent NYSE/Nasdaq. So, where do we currently stand for IPOs of Asian based businesses in 2024?

NYSE/Nasdaq

The clear venue of choice for mid and small-cap IPOs of Asian based businesses is Nasdaq. Over the last two years, we have successfully helped companies with business and operations located in Hong Kong, the People’s Republic of China, Japan, Malaysia, Singapore, Thailand and the Philippines list on Nasdaq. Companies involved in businesses as varied as IOT, household services, real estate, security solutions, medical relaxation services, industrial cleaning equipment supplies and construction equipment have all successfully completed listings on Nasdaq as the latest step to growing their business and operations.

Looking ahead, there is a steady pipeline of upcoming IPOs from Asian based companies, especially small and medium sized enterprises based in Singapore, who see Nasdaq as a more suitable (and accessible) listing venue than Hong Kong or Singapore. Malaysia, too, has seen a marked increase in the number of companies looking to list overseas, though these listings can struggle with valuation issues given the relative strength of the Ringgit to the US dollar. China, having overcome the slowdown caused by the requirement imposed in 2023 to obtain CSRC approval of overseas listings, is also producing a steady pipeline of companies accessing capital markets in the United States. Whilst other jurisdictions can pose issues with listing via a Cayman vehicle (taxation, for example, on the pre-IPO reorganisation, in the case of companies incorporated in Japan, or restricted ownership requirements in certain industries, for companies incorporated in the Philippines, Thailand or Indonesia), recent IPOs show us that these are not insurmountable problems should a company wish to take this path.

Cayman or Bermuda?

Whilst we have continued to see an increase in the number of companies with business and operations in Europe opting for Bermuda companies for their listing vehicles, Cayman listing vehicles dominate for NYSE/Nasdaq listings of companies with businesses and operations in Asia.

Being incorporated in the Cayman Islands provides the listed company with certain benefits associated with being a Cayman Islands company, such as political and economic stability, an effective judicial system, a favorable tax system, the absence of foreign exchange control or currency restrictions and the availability of professional and support services. In addition, being a non-U.S. company with foreign private issuer status means the listed company will be exempt from certain provisions of the Exchange Act that are applicable to U.S. domestic public companies and, as a company incorporated in the Cayman Islands, is permitted to adopt certain home country practices in relation to corporate governance matters, which can help facilitate the operation of the company post listing.

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