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Further Relaxation of Registered Capital Requirements for Companies in China

China Insight - Corporate

29/03/2016

Already when the amended PRC Company Law took effect on 1 March 2014, the requirements in respect of registered capital were relaxed for companies in China including foreign invested enterprises (“FIEs”). The requirements on minimum registered capital were abolished. The two years deadline for capital contribution was cancelled and the requirements on a minimum cash contribution of 30% were abolished, unless laws, administrative regulations or decisions of the State Council provided otherwise.

So far FIEs could not fully benefit from the above registered capital reform due to various administrative rules and regulations (collectively “Administrative Rules”) imposing restrictions on FIEs.

To further deepen the registered capital reform and unify the regulations in this area, on 28 October 2015, the PRC Ministry of Commerce ("MOFCOM") published the Decision on Revising Several Administrative Rules and Normative Documents ("MOFCOM Decision"). It took effect on the same day. The MOFCOM Decision revised provisions concerning registered capital requirements in 29 Administrative Rules.

We summarise the most significant changes brought by the MOFCOM Decision. Please click the below Source link to read more in detail.

Source
China Insight - Corporate Update: Further Relaxation of Registered...
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Authors

Picture of Ulrike Glueck
Dr. Ulrike Glueck
Managing Partner
Shanghai
Picture of Cyndi Cao
Cyndi Cao, LL.M.