Procedures for increasing investment capital of foreign - invested companies

A foreign-invested company’s capital increase may affect project capital, charter capital or borrowing arrangements in different ways. Identifying which figure changes is the starting point for planning the corporate decisions and registration work.

Distinguish the types of funding

Charter capital relates to the owners’ registered commitment to the company. Project funding may also include borrowing or other mobilised capital. An increase in a loan facility is therefore not automatically the same transaction as an additional equity contribution.

Start with the company’s existing enterprise and investment records, where applicable. Check the registered figures, contribution schedule, ownership percentages and any conditions associated with the project.

Assess approvals and corporate decisions

Identify who will provide the additional funds and whether ownership or control will change. A new foreign investor, a changed business activity or a sensitive project location can raise issues beyond a simple numerical amendment.

Review the charter and the authority required to approve the transaction. The proposed contribution or borrowing should also be coordinated with the investment and enterprise procedures applicable at the time, including any need to amend existing approvals.

Coordinate registration, banking and records

Prepare resolutions, updated ownership information, financial evidence and the relevant transaction documents. Confirm the lawful funding route and banking arrangements before money is transferred. Foreign borrowing should be reviewed under its own registration and reporting framework.

After completing the necessary steps, reconcile the updated certificates, internal ownership records and accounting entries. A lawyer can help prepare a sequence of actions and responsibility list so that a funding plan does not leave inconsistent records or an overlooked approval.