What are the different types of FIE acquisition?

Many investors choose acquisition before establishing an enterprise since it means that the investor can take over an already established and ongoing business operation with all relevant licenses and permits.

An acquisition can be made directly or indirectly. In a direct acquisition the investor becomes a direct party to the FIE. If the acquisition is indirect the investor acquires shares in the foreign party to the FIE and holds an interest in the company in that way. For direct acquisition, normally there must be a unanimous board resolution, waivers of preemptive rights, consent of the parties, and an approval of the original approval authority.

Instead of acquiring an interest in an FIE, an alternative is to acquire the assets of the company. Such a purchase does not have an effect on the continued existence of the parties to the transfer. Also, in asset purchasing it is important that legal due diligence is performed, especially concerning the good title of the assets.

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Personal Financial Management

Mergers and Acquisitions

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