“Registered Capital” for WFOE/JV in China
Different in concept from the western countries, the “Registered capital” in China refers to the total amount of capital subscribed by all shareholders and registered with the company registration authority. There is no minimum amount requirement for the registered capital subscribed by shareholders (Unless otherwise provided by laws and regulations).
However, according to the new Company Law, effective from July 1, 2024，for Limited Liability Company, the subscribed capital contributions of all shareholders shall be paid in full within five years from the date of the company's establishment, in accordance with the provisions of the company's articles of association while for the Joint Stock Limited Company,Promoters must fully pay for their subscribed shares before the company's incorporation.
The registered capital is only a guarantee from the investor required by the Chinese government to show that the new company can be normally operated within its registered business scale in China. It cannot be withdrawn by the investor; however, it can be used in any business-related activity for the operation of the new company.
Certain special industries still impose minimum registered capital requirements on foreign-invested enterprises. The minimum registered capital varies with different types of foreign invested enterprises, and for specific requirement, please check Capital Requirement List for FIEs in different industries.