Core Viewpoint - Shein's plans for an IPO in Hong Kong are hindered by tax-related controversies and executive departures, raising concerns about its compliance and operational structure [1][2][5]. Group 1: IPO Challenges - Shein submitted a confidential application to the Hong Kong Stock Exchange in June, but there has been no substantial progress reported, which is unusual given the typical 100-day review period [1]. - The departure of key executives, including the head of government affairs in the U.S. and the overseas recruitment head, has further complicated its IPO plans [1]. - The company's relocation of its headquarters to Singapore has led to accusations of tax evasion, impacting its listing prospects in both Hong Kong and London [1][5]. Group 2: Taxation Issues in the UK - Shein's UK subsidiary reported a 33% increase in sales to £2 billion in 2024, yet paid only £9.6 million in corporate tax, resulting in a tax rate of less than 0.5% [2][3]. - The Fair Tax Foundation revealed that 84% of Shein's UK sales were transferred to its Singapore parent company as "procurement costs," indicating a significant profit shifting strategy [3]. - Shein faces a lawsuit in the UK for allegedly evading VAT, with claims amounting to £5.8 million [3]. Group 3: Taxation Issues in China - Shein's operational structure, which registers in Singapore while operating in China, has led to significant tax revenue losses for China, with an estimated tax shortfall of ¥5.6 billion [6]. - The company has a substantial employee base of over 11,000 globally, but only 5,587 are reported to be paying social security in China, raising concerns about compliance [6]. - Shein's structure conflicts with the China Securities Regulatory Commission's requirements, as over 70% of its products are sourced from China, and most key operations are based there [6][10]. Group 4: Regulatory and Compliance Concerns - Shein's tax planning strategies are under scrutiny as they appear to exploit tax loopholes, raising questions about their legality and sustainability [8][9]. - The OECD's upcoming global minimum corporate tax rate of 15% could further complicate Shein's tax strategy, as its effective tax rate is currently below this threshold [9]. - The potential for a tax investigation in China is increasing, as Shein's operational model may not align with the principles of fair taxation [10].