Minimum Registered Capital for a WFOE in China (2026): What to Actually Declare

The statutory minimum registered capital for a general WFOE in China is RMB 1. It has been that way since the 2014 Company Law amendments that scrapped sector-wide minimums. The 2024 Company Law revision that came into force on 1 July 2024 did not change the minimum. What it changed is the timing. Article 47 of the revised Company Law now requires shareholders to fully pay in subscribed registered capital within five years of the company’s establishment.

That five-year paid-in rule is the single most important 2024 change for anyone setting up or already operating a WFOE, and it is still the most misunderstood. This guide explains exactly how the rule works, what Shanghai SAMR and other Chinese local authorities actually expect in 2026, what happens if you under- or over-capitalise, and how to change registered capital after the fact.

The 2024 Company Law change you need to understand

The Standing Committee of the National People’s Congress passed the revised PRC Company Law on 29 December 2023 after three previous draft cycles. The law came into force on 1 July 2024.^[1] Its most consequential provision for foreign investors is Article 47.

Article 47: the five-year paid-in rule

Article 47 states that shareholders of a limited liability company must pay their subscribed capital contributions in full within five years from the company’s date of establishment, as stipulated in the company’s articles of association. Because a WFOE is incorporated as an LLC under Chinese law, Article 47 applies directly to every new WFOE.^[2]

Before 2024, shareholders could nominate any reasonable paid-in schedule, and in practice many foreign investors promised to pay in 20 or 30 years later. That era is over. Any paid-in schedule that exceeds five years is now non-compliant for new WFOEs.

Transition period for existing WFOEs

Existing companies that were incorporated before 1 July 2024 fall under a separate transition regime. Under the Draft Regulations on the Implementation of the Registered Capital Registration Management System of the Company Law, issued by SAMR on 6 February 2024, existing LLCs have a three-year transition period running from 1 July 2024 to 30 June 2027 to adjust their paid-in capital schedules.^[3]

If an existing company’s original paid-in timeline would extend beyond 30 June 2032 (that is, more than five years after 30 June 2027), it must shorten the timeline during the transition period. The final backstop deadline for existing WFOEs to fully pay in their registered capital is 30 June 2032.

Why the rule matters in practice

Before Article 47, inflating registered capital was a vanity move with little cost. A foreign investor might subscribe USD 5 million to “look serious” to Chinese counterparties, with no real intention of paying it in. Under the new rule, every subscribed yuan has to arrive in the company’s capital account within five years, and directors have a statutory duty to verify and demand contributions.

Industry benchmarks: what SAMR actually accepts in 2026

Although there is no statutory minimum for a general WFOE, local SAMR offices evaluate whether the registered capital is reasonable relative to your declared scope of business and your first three years of expected operating costs. “Reasonable” is interpreted by eye, not by formula, but the ranges below reflect what we see accepted consistently in Shanghai, Beijing, Shenzhen, and the Greater Bay Area today.^[4]

A useful rule of thumb: match your registered capital to roughly the first two years of operating expenses you can realistically commit to, then revisit the number once the business is on its feet.

What happens if you under-capitalise

Local SAMR offices can reject an incorporation application if the registered capital is so low that it “does not reasonably reflect the company’s operating needs.” This is not a precise test and does not usually come up for consulting WFOEs at RMB 100,000. It does come up for trading or manufacturing WFOEs that propose registered capital at RMB 10,000 and a scope of business that involves million-yuan import orders.

A more common problem with under-capitalisation is operational. A WFOE cannot pay salaries, rent, or suppliers before its capital account is funded. If your registered capital is too low to cover the first three months of costs, you end up waiting for the foreign parent to wire additional funds, each tranche of which requires SAFE foreign-direct-investment registration.

Under the 2024 Company Law, directors also carry a statutory duty to verify that shareholders’ subscribed capital is paid in on time. Under-capitalising in the hope of paying in later, without a concrete plan, exposes the directors to personal liability if creditors are left unpaid.^[5]

What happens if you over-capitalise

Over-capitalisation used to be a harmless vanity move. Under Article 47 it has teeth.

If you subscribe RMB 10 million and can only pay in RMB 3 million within five years, you have three options. You apply to reduce the registered capital under SAMR’s change-of-registration procedure, which requires a 45-day creditor notice period under the Company Law and SAMR rules.^[6] You accelerate the capital contribution, which may require the parent to wire additional funds under SAFE rules. Or you face a compliance problem that sits on your company’s registration record until resolved.

Neither the reduction nor the acceleration is fast. A registered capital decrease involves a shareholder resolution, a public announcement, a creditor protection period, and a change filing with SAMR. Expect a minimum of 60 days elapsed time, and significantly longer if creditors raise claims.

Regulated sectors with statutory minimums

The “no minimum” rule applies to general WFOEs. In regulated sectors, statutory minimums still apply. These are set by sector-specific regulations, not the Company Law. Common examples:

If your WFOE is going into one of these sectors, the statutory minimum overrides any practice benchmark. Confirm the current figure with the sector regulator before you draft the articles of association, since several of these amounts have changed as regulators were reorganised.

Currency of registered capital

WFOE registered capital can be denominated in RMB or in a foreign currency. Most foreign investors denominate in USD or EUR to simplify cross-border transfers. SAFE registers the capital account in the currency of subscription, and capital-conversion rules allow the company to convert foreign-currency capital into RMB on an as-needed basis through the Foreign Direct Investment Account.^[7]

The downside of foreign-currency registered capital is foreign-exchange exposure on the parent’s balance sheet until the capital is injected. Some groups prefer to subscribe in RMB against a fixed exchange rate, accept the FX cost upfront, and simplify internal accounting. There is no right answer; it depends on how your group books intragroup FDI.

How to change registered capital after incorporation

Changing registered capital is a change-of-registration matter under SAMR procedures. Both increases and decreases are possible; the processes differ.

Increasing registered capital

The shareholders pass a resolution to increase the registered capital. The articles of association are amended. The company applies to the local SAMR for a change of registration within 30 days of the resolution. A capital verification record is usually required to prove the amount that has already been contributed. Once SAMR processes the application, a new business license is issued, and SAFE is notified of the change through the company’s bank.^[6]

Decreasing registered capital

A capital decrease is slower because of creditor protection. The company publishes a capital reduction notice in a credible newspaper or through the National Enterprise Credit Information Publicity System, disclosing the before-and-after registered capital amounts and inviting creditors to claim repayment or request security within 45 days of publication. Only after the 45-day window closes can the company apply to SAMR for the change of registration.^[6]

In both cases, the bank and SAFE must be notified and the inbound-FDI capital account records updated.

How to decide your registered capital in 2026

Four practical questions to answer before you sign the articles:

1. What are your first two to three years of cash costs?

Add up payroll (with social insurance and housing fund), office lease, software, legal and accounting fees, travel, and any inventory or capex you plan to fund locally. Round up. That is your baseline registered capital.

2. Can the parent realistically wire the subscribed amount within five years?

Cross-border FDI wires need SAFE registration and bank KYC. If the parent balance sheet cannot support the subscribed amount within five years, lower the number.

3. Are you in a regulated sector?

If yes, the sector minimum governs regardless of your baseline. Check with the specific regulator.

4. Do you want to leave headroom for expansion?

Yes, but within the same five-year window. Over-subscribing “for the future” has compliance consequences. It is cleaner to increase the registered capital later through a SAMR change of registration.

Common mistakes in 2026

Mistake 1: copying another WFOE’s registered capital

“Our partner set up with RMB 5 million so we will too.” The other WFOE’s business plan, runway, and parent-company balance sheet are different from yours. Work from your own costs.

Mistake 2: setting a vanity number to impress local stakeholders

Chinese counterparties looked at registered capital as a credibility signal under the pre-2014 regime. That signal has weakened since, and under Article 47 it is now a five-year liability.

Mistake 3: ignoring the EIA or sector licence step

For manufacturing or regulated sectors, the registered capital interacts with the licensing process. Set the capital at a level that supports the licence, not just the incorporation.

Mistake 4: forgetting to update SAFE after changes

A change of registered capital triggers downstream filings with the bank and SAFE. Miss them and the next capital wire will bounce.

Frequently asked questions