Capital Requirements of WOFE

"Registered Capital” also known as “Legal Capital”, means the one which, according to the Articles of Association of a corporate enterprise, all its shareholders or promoters subscribe or apply for capital contributions or total capital subscription.   It is legally registered in the company and the registration authority.

According to "The Company Registered Capital of Registration Regulations", the following points should be note:-

I.   Payment Deadline:
Registered Capital can be paid by one time or several times, but the first contribution shall not be less than 20% of the total registered capital, nor less than the statutory minimum requirement; and for the rest portion, it should be settled by shareholders within two years since the company's incorporation.   Of which, the investment company can be paid in five years.

II.   Payment Method:
For Registered Capital, shareholders can contribute in cash, or in other form, namely physical stocks, intellectual property, land use rights which can be legally transferred, with currency valuation and non-monetary property appraised.   However, laws, administrative regulations of investment property shall not be excluded.   Monetary contribution of all shareholders of a limited liability company shall not be less than 30% of its registered capital.    The investment in non-monetary assets should be assessed and verified and shall not be overvalued or undervalued.   Rules and administrative regulations provisions govern the value assessment.    A shareholder cannot provide service, credit, name of natural person, goodwill, franchise or any other type of secured property for appreciation.

III.   Minimum Requirement:
Minimum Requirement for Registered Capital (Both domestic and overseas) :-
(1) for a sole limited liability company: RMB 100,000 paid in one-time;
(2) for those with two or more shareholders of a limited liability company: RMB 30,000 ;
(3) for those company limited with shares: RMB 5,000,000 ;
(4) for a listed company: a minimum of RMB 30 million.

According to the "Companies Law ", it stipulates that the company's registered capital must be verified by a statutory capital verification institution which issues a verification certificate. The verification certificate issued by the agency is a legal proof on the amount of registered capital.    Only accounting firms and audit firms have the right to issue a capital verification which verify in accordance with relevant laws and administrative regulations.    For those state-owned companies, state-owned property rights registration certificate is no longer a pre-condition for company registration.

1. A company to set up a special account (a verification account) to manage the company's registered capital. Without complete verification, the registered capital cannot be used for operating expenses. Upon completion of verification procedures, the capital will be transferred to company's basic account and funds can only be used for operation.

2. Importing investing funds, the followings should be noted:-
    (A)   The transmitter must be approved by the Administration of Foreign Exchange foreign investors;
    (B)   Investment funds must be transmitted from abroad ;
    (C)  Purpose of Remittance must state clearly: (Chinese) : Investment funds ( or capital ) , ( English ) Capital Funds