Definition
Variable Interest Entity – A structure where a company controls and consolidates the financial results of an entity it doesn't actually own, through contracts rather than equity — common for Chinese internet/tech companies, since foreign ownership of licensed businesses (internet content, payments, telecom) is restricted under PRC law. The controlling company books the VIE's revenue and assets as its own, but its "control" rests on contracts with the entity's actual (often insider) owners holding up, and on regulators continuing to tolerate the workaround rather than unwinding it. Found In: Notes to Financial Statements (risks and contingencies)