Registered Capital vs. Total Investment
The difference between an Foreign Invested Enterprises (FIEs) authorized Total Investment amount and its Registered Capital defines it maximum permitted debt funding:
Authorized Total Investment Registered Capital = Maximum Permitted Debt
An FIEs proportion of Registered Capital to authorized Total Investment (and thus maximun permitted debt) are regulated and subject to the approval of the FIEs original examination and approval authority.
The permitted ratios of Registered Capital to Total Investment are:
At least 70% in Registered Capital for Total Investments of US$3 million or less (thus US$2.1 million in equity and US$900,000 in debt for a US$3 million Total Investment);
At least 50% or US2.1 million in Registered Capital (whichever is greater) for Total Investments of over US$3 million up to US$10 million;
At least 40% or US$5 million (whichever is greater) for Total Investments of over US$10 million up to US$30 million; and
At least 33.3% (one-third) or US$12 million in Registered Capital (whichever is greater) for Total Investments of over US$30 million.
Foreign...
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