China Registered Capital Requirements: Latest Law Updates & Compliance Guide

As China’s economy continues its path toward high-quality development, projected to grow by 4.8% in 2026 according to Goldman Sachs Research, understanding the legal landscape for business formation remains critical for both domestic and foreign investors. One of the most foundational aspects of establishing a company in China—the registered capital requirement—has undergone significant evolution in recent years, with the 2024 legal amendments further refining the framework. This guide demystifies China’s new law on registered capital requirements, clarifying exceptions, compliance obligations, and strategic considerations for businesses entering or operating in the world’s second-largest economy.

Registered Capital Reform: Core Principles Under the New Law

The latest amendments to China’s Company Law, which came into effect on July 1, 2024, maintain the principle of “no minimum registered capital” for most industries, building on reforms introduced in 2013 that replaced the mandatory minimum capital system with a subscription-based model. Under the new law, companies are no longer required to verify capital contributions during registration, allowing founders to determine the registered capital amount based on business needs, with flexible payment schedules. This approach aligns with China’s ongoing efforts to streamline business registration processes and reduce entry barriers for entrepreneurs.

However, the latest update introduces stricter disclosure requirements for registered capital. Article 26 of the amended law mandates that companies clearly state the subscribed capital, payment time limit, and method of contribution in their articles of association, which must be publicly accessible via the State Administration for Market Regulation (SAMR) database. This transparency measure aims to protect creditors and business partners by providing clearer visibility into a company’s financial commitments.

Notably, the reform retains the “capital contribution responsibility” principle, meaning shareholders remain liable for unpaid capital if the company enters bankruptcy or cannot meet debt obligations. This balance between flexibility and accountability reflects China’s dual goals of encouraging entrepreneurship while maintaining market stability. As we explore industry-specific exceptions next, it’s important to recognize how these core principles apply across different business sectors.

Industry-Specific Minimum Capital Requirements

While the general rule under the new law eliminates minimum registered capital, regulated industries deemed critical to national security, financial stability, or public health continue to enforce specific thresholds. These exceptions are outlined in both the Company Law and sector-specific regulations, with updates refining requirements for emerging fields like fintech and biotech.

For example, fintech companies offering third-party payment services must now maintain a minimum registered capital of CNY 100 million, up from CNY 30 million in 2020, reflecting the sector’s growing systemic importance. Similarly, Class III medical device manufacturers face higher capital requirements to ensure product safety and quality control. These industry-specific rules are enforced through separate regulatory approvals, where capital verification reports from certified accounting firms remain mandatory during license applications.

It’s crucial for investors to consult both the amended Company Law and relevant sector regulations, as some local governments may impose additional requirements in special economic zones. The next section explores how these rules apply to foreign-invested enterprises (FIEs), which face a unique regulatory landscape under China’s opening-up policies.

Foreign-Invested Enterprises: National Treatment and Special Cases

Under the 2024 framework, foreign-invested enterprises (FIEs) benefit from the same “no minimum registered capital” principle as domestic companies, thanks to the continued implementation of China’s Foreign Investment Law (FIL) and negative list management system. This national treatment aligns with China’s commitment to opening its market, as highlighted in the March 2025 Debevoise & Plimpton report noting the removal of foreign ownership caps in sectors like life insurance and automotive manufacturing since 2020.

However, FIEs in restricted or prohibited sectors under the 2024 Foreign Investment Negative List remain subject to specific capital requirements. For instance, foreign banks establishing subsidiaries in China still need to meet the CNY 1 billion minimum registered capital required for commercial banks, with additional requirements for branches in different provinces. Similarly, foreign-invested securities companies must maintain the same CNY 500 million threshold as domestic counterparts, though the 2026 update allows for 100% foreign ownership in most cases.

Another key consideration for FIEs is the currency of capital contribution. The new law permits contributions in both RMB and freely convertible foreign currencies, but requires that foreign exchange transactions comply with State Administration of Foreign Exchange (SAFE) regulations. Companies must also ensure that capital is used for the declared business scope, as unauthorized redirection of funds remains a key focus of regulatory inspections. As we transition to discussing capital payment mechanisms, foreign investors should note how subscription vs. paid-in systems impact their operational planning.

Subscription vs. Paid-In Capital: Registered Capital Requirements

The Company Law retains the subscription-based registered capital system introduced in 2013 but tightens rules around payment deadlines and proof of contribution. Under this model, shareholders promise to contribute a certain amount of capital over an agreed period, rather than paying it upfront. Under the latest amendments to China’s Company Law, shareholders must complete capital contributions within the timeline specified in the articles of association, subject to statutory requirements and regulatory supervision.

For companies in regulated industries, however, the paid-in capital system remains mandatory. Financial institutions, for example, must verify 100% of the minimum registered capital before obtaining a business license, with funds held in a dedicated escrow account. The amendments strengthen oversight of capital verification, requiring certified public accountants to submit electronic audit reports directly to SAMR, reducing the risk of fraudulent documentation.

A notable change is the treatment of intellectual property (IP) contributions. Previously, IP could account for up to 70% of registered capital; the new law removes this upper, allowing companies to allocate higher value to intangible assets like patents or proprietary technology, provided an independent valuation report is submitted. This flexibility benefits innovation-driven sectors like tech and pharmaceuticals, where IP often constitutes a significant portion of company value. Understanding these payment mechanisms is essential for avoiding the compliance pitfalls we examine next.

Compliance Risks and Penalties for Non-Compliance

While the registered capital reforms offer greater flexibility, they also introduce enhanced penalties for non-compliance, reflecting China’s focus on improving corporate governance. The most common violations include failing to disclose capital information accurately, exceeding agreed payment deadlines, and misstating the value of non-cash contributions (e.g., real estate or IP).

SAMR’s enforcement guidelines outline specific penalties for these infractions: companies with inaccurate disclosure face fines ranging from CNY 10,000 to CNY 50,000 (USD 1,380–6,900), while serious cases involving fraudulent capital statements may result in business license revocation. Shareholders who fail to meet capital contribution deadlines can be held personally liable for damages to the company or its creditors, with courts increasingly ordering compulsory performance in such disputes.

A high-profile case in early 2026 illustrates these risks: a Beijing-based fintech startup was fined CNY 30,000 after it failed to update its SAMR filing when extending its capital payment deadline, leading to misleading information in the public registry. The company also faced reputational damage, as potential investors cited the non-compliance issue during funding negotiations. Such cases underscore the importance of proactive compliance management, which we address in the final section as part of strategic planning for businesses.

Strategic Planning: Determining Optimal Registered Capital Requirements in China

Setting the right registered capital amount under the 2026 new law requires balancing multiple factors: business scale, industry norms, financing needs, and risk tolerance. While there’s no one-size-fits-all formula, financial advisors typically recommend aligning registered capital with projected 3–5 year operating costs, ensuring the amount reflects the company’s ability to fulfill contractual obligations and build credibility with partners.

For startups in non-regulated industries, a practical approach is to set registered capital at CNY 1–5 million (USD 138,000–690,000), a range that avoids excessive liability while signaling seriousness to suppliers and clients. Tech companies with significant R&D needs may opt for higher amounts to attract venture capital, as investors often view registered capital as an indicator of founder commitment. Conversely, service-oriented businesses with lower upfront costs might start with CNY 500,000 (USD 69,000), with plans to increase capital as revenue grows.

It’s also critical to consider regional variations: in first-tier cities like Shanghai and Shenzhen, higher registered capital may enhance a company’s eligibility for government incentives or preferential loan programs, while inland provinces sometimes offer tax breaks for companies with lower initial capital. Regardless of the amount chosen, regular reviews of capital adequacy are advisable, especially before major business expansions or contract negotiations.

Conclusion:

China’s new law registered capital requirements represent a mature phase in China’s corporate regulatory evolution, striking a balance between deregulation and accountability. By maintaining no minimum capital for most industries while strengthening disclosure and enforcement, the reforms position China as both an accessible and well-regulated market for domestic and foreign investors alike. As China’s economy continues its path toward high-quality development, projected to grow by 4.8% in 2026 according to Goldman Sachs Research, understanding the legal landscape for business formation remains critical for both domestic and foreign investors.

For businesses, success under the new regime hinges on careful planning: understanding industry exceptions, aligning capital with business needs, and prioritizing compliance with disclosure and payment obligations. Whether establishing a fintech startup or a manufacturing subsidiary, the ability to navigate these rules will be a key determinant of operational smoothness and long-term viability in China’s dynamic market. As always, consulting with legal and financial professionals specializing in Chinese corporate law remains essential to adapting to the evolving regulatory landscape.

With these insights, companies can approach registered capital decisions not as a regulatory hurdle, but as a strategic tool to support growth, build trust, and thrive in one of the world’s most promising business environments.