Calculation of registered capital
Money makes the company run.
In China, a company's registered capital is not only required for day-to-day operations. It is an important loan tool. The lower the registered capital Running a business becomes more difficult (for example, applying for a loan. commercial contracting benefiting from financial services in China) and vice versa

big numbers
Companies that obtain business licenses in China must understand the concept of social capital.

Registered capital refers to the total amount of capital that investors have fully injected into a company and registered with Chinese authorities.

The total investment amount consists of the registered capital paid or subscribed by investors. Plus loans from organizations that invest abroad. The difference between the total investment and the registered capital is therefore the amount that can be borrowed from the parent company.

If the total investment is less than 3 million USD The registered capital of the company must be at least 70% of the total investment.

There is no minimum threshold.

Establishing a WFOE in China? There is no legal requirement for a minimum registered capital threshold. However, in practice, China maintains a minimum registered capital requirement. (which no one can really determine) That is, the main factors that determine the amount of registered capital are the location of the company and the size of the company.

Our two cents

You shouldn't set a minimum goal. This is because it takes time and money to raise more money to China or to raise capital. If the registered capital is too low in the beginning, the company may face cost problems in the long run. Therefore, it is better to set a higher bar for authorized capital, which covers the expected expenses of the company for the first two years, regardless of any income.

/small print
You don't need to pay off the entire registered capital upfront if your WFOE doesn't need the money. In theory, if the company has been around for about twenty years. It is possible to increase capital gradually within this time frame. But at some point you will have to pay the rest…
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In addition to paying the registered capital Companies doing business in China are required to maintain a capital reserve equal to 50% of the original registered capital.
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The share of withdrawal of reserves should not be less than 10% after tax profits when the total withdrawal amount reaches 50% of the authorized capital. It will no longer be possible to withdraw it.
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Funds paid into the bank are not frozen and can be used immediately for business operations.
At PTL Group, we specialize in financial services in China. Contact us today and let us support your China operations.

https://www.msadvisory.com/china-registered-capital/