What are the problems if the foreign-invested shares decrease after registration as a foreign-invested company?

  • Author
    gg_multi
  • Date
    2021-12-28 11:57
  • Views
    3726
Even if a foreign-invested company fails to meet the requirements for a foreign-invested company due to partial transfer of stocks or reduction in capital after registration as a foreign-invested company, it does not lose its status as a foreign-invested company (Article 2, Paragraph 2 of the Enforcement Decree of the Foreign Investment Promotion Act).
In other words, even if the foreign-invested share does not reach 10% after registration as a foreign-invested company, the status of a foreign-invested company is maintained.
Therefore, even if the share owned by foreigners decreases, there is no problem in conducting business activities, but the incentives provided according to the foreign investment ratio will not be received as much as the decrease.
In addition, when stocks owned by a foreign investor are transferred to another person, or the number of stocks owned by a foreigner decreases due to reasons such as reduction of capital, it is required to report to the Minister of Knowledge Economy.