Registered capital is the total capital that shareholders commit to contribute to a Chinese company, recorded with SAMR and printed on the business license. Since 2014 China uses a subscription system: for most industries there is no statutory minimum and no requirement to pay everything at incorporation. The amended Company Law, however, generally requires subscribed capital to be paid in within five years.
Why it matters
Foreign founders often treat registered capital as a formality and pick a number at random. It is not. The figure is public, and Chinese landlords, suppliers, banks and customers read it as a credibility signal — a trading WFOE showing RMB 10,000 wins no contracts. Legally, shareholders are liable up to the unpaid subscribed amount: if the company cannot pay its debts, creditors can demand that shareholders accelerate their contributions. For foreign-invested companies, registered capital also fixes how much can flow in through the capital account, and the gap between registered capital and total investment sets the cap on foreign-currency shareholder loans.
How it works in practice
A Canadian software company sets up a WFOE with RMB 800,000 registered capital, payable within five years. It wires RMB 400,000 in year one to cover salaries and rent through break-even. When it later needs more cash quickly, it injects the remaining RMB 400,000 rather than going through a capital increase filing — a buffer the founders planned deliberately at formation.
Common mistakes
- Choosing a trophy number (RMB 50 million) to look impressive, then facing a real obligation to pay it in
- Choosing a token number that cannot fund operations and forces an early capital increase
- Forgetting that unpaid subscribed capital is collectible by creditors in insolvency
- Wiring funds into the wrong account so they never count as capital contribution
- Ignoring the five-year paid-in deadline under the revised Company Law