Minimum share capital requirements for foreign-owned wholesale and retail businesses.
The minimum share capital of a majority foreign-owned wholesale and retail entity is to be assessed on the paid-up share capital and not the registered share capital.
Keywords: Legal, Wholesale, Retail, Paid-up share capital, Foreign Business Act
On 10 February 2010 the Office of State of Council issued a memo letter to clarify their interpretation of minimum share capital required for wholesale and retail business. Further the amount of capital on commencement of the business operation under the Foreign Business Act will be assessed as the amount that is fully paid-up.
The Department for Business Development (‘DBD’) will treat this interpretation as an endorsement of its recent practices and will therefore be investigating majority foreign owned wholesale and retail businesses. It is understood that such an investigation will involve reviewing company’s corporate documents and financial statements submitted in May 2010. Upon completion of the DBD’s investigation, those businesses with unpaid registered capital will be requested to pay up the full amount.