China company registered capital (WFOE) is one of the issues that the registered company needs to consider at first. Wholly foreign owned enterprise (abbreviated as WFOE or WOFE) is the most common adopted invest vehicles of foreign investors in China. Registered capital refers to the total amount of funds or capital contributions by the shareholders of the WFOE. These contributions must be registered with the authorities and will be stated on the company’s Business License. This investment must be paid to a for this purpose special opened investment bank account.
The greater the registered capital, the more responsibility the company must assume. Therefore, when registering capital, it is important to calculate what is sufficient to match your current financial ability or ability to expect capital. Registered funds are inflated, and the lack of shareholders' own ability will allow them to fall into unnecessary dilemmas.
How to determine the registered capital of a WFOE
The registered capital is also called legal capital. It is the total amount of capital subscribed or subscribed for by all shareholders or sponsors as stipulated in the articles of association of the company system and is registered in the company registration authority. Different industries have different requirements for registered capital. We can refer to the registered capital of companies in the same industry and compare it with our company’s actual situation in order to make good decisions.
Incremental as appropriate, registered capital can be adjusted according to operating conditions. When the company is in it’s initial stages, the registered capital can be set to a lower amount. Later, after the company expands, the company has the ability to assume greater responsibility and business needs do to change.
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How to contribute the registered capital
Excluding for some certain WFOE’s, such as insurance companies and banks etc., Owners may pay registered capital in installments. The Company Regulation allows payments of registered capital by shareholders of a limited liability company (WFOE) to be complete by installments. The first payment must be at least the minimum of 15% or more of the total planned investment capital.
Besides cash payments also the option of obtaining registered capital can be made by tangible and intangible assets. These assets can be financially estimated and legally transferred to the new formed company, such as physical things, intellectual property right, or land use right, etc. Non-cash investments must be valued by assessed and permitted by government authorities.
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If you have further enquire, please do not hesitate to contact Tannet at anytime, anywhere by simply visiting Tannet’s website english.tannet-group.com, or calling Hong Kong hotline at 852-27826888 or China hotline at 86-755-82143422, or emailing to tannet-solution@hotmail.com. You are also welcome to visit our office situated in 16/F, Taiyangdao Bldg 2020,Dongmen Rd South, Luohu , Shenzhen, China.
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