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Category: Accounting and Financial Reporting

A man puts wooden blocks with the word Capital
Accounting and Financial Reporting

Solutions for a Foreign-Invested Enterprise to Increase Capital

Background A multinational group headquartered in the US (“US Co.”) owns a subsidiary in Hong Kong. The Hong Kong subsidiary (“HK Co.”) is the shareholding company of a Foreign-Invested Enterprise (“FIE”) in Mainland China. The FIE’s primary business involves sourcing telecommunication products from China and locally selling to their corporate clients.   Challenge Initially, when the FIE was established, the registered capital was set at USD 200,000, which would be contributed by the HK Co. with funds sourced from the

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