Starting a Business

Minimum Registered Capital and Capital Contribution Schedule
China's latest Company Law has removed requirements on minimum registered capital for different types of company and allows companies to pay up their capital in two years in accordance with regulations. Investment companies can pay up their capital in five years.

 

1.5.1 Minimum Registered Capital Requirement

Under the Company Law, companies in the mainland are mainly incorporated in the form of limited liability companies or joint-stock limited companies. For limited liability companies, the minimum registered capital is lowered to Rmb30,000. For joint-stock limited companies, the minimum registered capital requirement is Rmb5 million.

According to the existing rules of government authorities overseeing different sectors, the following requirements are applied to FIEs concerning minimum registered capital:

(a) The minimum registered capital of a JV commercial enterprise engaged in wholesale or retail should comply with the requirements of the Company Law. The Company Law stipulates that the minimum registered capital of limited liability companies is Rmb30,000, while the minimum registered capital of joint-stock limited companies is Rmb5 million.

(b) The minimum registered capital of a foreign or JV bank is Rmb300 million worth of freely convertible currencies;

(c) The minimum registered capital of a foreign or JV financial institution is Rmb200 million worth of freely convertible currencies;

(d) The minimum registered capital of a JV travel agency is Rmb2.5 million;

(e) The minimum registered capital of a JV advertising agency is US$300,000;

(f) The minimum registered capital of a JV foreign trade company is Rmb50 million;

(g) The minimum registered capital of a JV international freight forwarding agency is US$1 million;

(h) The minimum registered capital of a foreign-invested printing company engaged in the printing of publications and printed materials for packaging is Rmb10 million, while the minimum registered capital of a foreign-invested printing company engaged in the printing of other printed materials is Rmb5 million;

(i) The minimum registered capital is Rmb2 billion for a company engaged in trans-provincial basic telecom business; Rmb200 million for a company engaged in provincial basic telecom business; Rmb10 million for a company engaged in trans-provincial value-added telecom services; and Rmb1 million for a company engaged in provincial value-added telecom services;

(j) The minimum registered capital of a foreign-invested insurance company is Rmb200 million or its equivalent in freely convertible currency;

(k) The minimum registered capital of a foreign-funded investment company is US$30 million;

(l) The minimum registered capital of a foreign-funded investment shareholding company is Rmb30 million.

1.5.2 Capital Contribution Schedule

The Company Law allows contribution of registered capital by shareholders of a limited liability company to be made by instalment as long as the first instalment is not less than 20% of the registered capital and not less than the statutory minimum and the balance of the registered capital is contributed within two years after incorporation of the company. The time limit for capital contribution to investment companies is five years.

The Implementing Opinions on Several Issues Concerning the Laws Applicable to the Administration of the Approval and Registration of Foreign-invested Enterprises contain the following provisions on the first instalment of registered capital and the time limit for capital contribution by shareholders of foreign-invested limited liability companies (including single person limited liability companies). One-off contributions must be made within six months after a company is incorporated. Contributions by instalment must be made with the first 15% - and no lower than the statutory minimum - paid in within three months after a company is incorporated and the balance paid in within the time limit stipulated in the Company Law, the laws related to foreign investment and the Company Registration Regulations. Where there are provisions in other laws and administrative regulations that require the shareholders to pay the registered capital in full upon incorporation of the company, those provisions will apply.

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