Reverse Investment Law and Legal Definition

Reverse Investment refers to the acquisition by a direct investment enterprise of a financial claim on its direct investor because direct investment is recorded on a directional basis. Capital invested by the direct investment enterprise in its direct investor (reverse investment) is regarded as an offset to capital invested in the direct investment enterprise by a direct investor and its related enterprises. Except when the equity participations are at least 10 percent in both directions. When the claims are not sufficient to establish a second, separate direct investment relationship, the reverse investment transactions should be recorded according to the directional principle of the direct investment relationship.