What is registered capital in a Chinese company?

Registered capital is the most commonly misread number on a Chinese business licence. Foreign founders often treat it as a credibility signal and pick something impressive; buyers often read a large figure on a supplier’s licence as evidence of substance. Both readings are wrong in the same way — the figure is a promise about the future, and the registry publishes separately how much of that promise has actually been kept.

Subscribed and paid-in are two different numbers

Term	What it is	Published?
Subscribed capital (认缴)	What the shareholders have undertaken to contribute, and by when	Yes — amount, method and contribution deadline
Paid-in capital (实缴)	What has actually been transferred to the company so far	Yes

The gap between the two is readable by anyone, which makes it useful in both directions: it is a thing to be careful about when you register your own company, and a thing to look at when you are assessing somebody else’s.

The five-year rule

Under the State Council regulation implementing the Company Law, in force since 1 July 2024, shareholders of a limited liability company must pay their subscribed capital in full within five years of the company’s establishment. Companies registered before that date fall under a transition: where the remaining contribution period runs beyond five years from 1 July 2027, it must be adjusted to within five years by 30 June 2027 and recorded in the articles of association.

Registered capital is not working capital

The two are often confused. Registered capital is a shareholder contribution recorded in the company’s equity; once contributed it belongs to the company and is spent on whatever the company does. It is not a reserve that has to sit untouched in an account, and it is not a separate pot from operating cash. What it does do is fix the ceiling of a shareholder’s liability for the company’s debts to the amount subscribed — which is precisely why the law cares whether it is real.

Reducing it is a procedure, not an edit

If the figure turns out to be too high, lowering it is a formal capital reduction: a shareholder resolution, a balance sheet and asset schedule, notice to creditors and public announcement, and a registration change. Creditors who object can require the company to settle or secure their debts first. It is doable and it is done often — but it is measured in months, not minutes, so it is far cheaper to choose a workable figure at the start.

How to choose the figure

There is no legal minimum for most business types, and no figure that is right in the abstract. In practice it is set by three things at once:

• What you can genuinely transfer within five years, since that is now the binding constraint rather than a distant formality.
• What the business actually needs to fund its first years — the capital is what the company runs on until it is self-funding.
• Whether anything external sets a floor: some sector licences, tenders, platforms or landlords look for a minimum, and it is worth finding out before you file rather than after.

What should not drive it is how the number looks to a counterparty. Anyone competent reads the paid-in figure next to it, and a large subscribed amount against zero paid in is a less flattering picture than a modest figure fully paid.