Equity Finance In China
Below is a MRR and PLR article in category Internet Business -> subcategory Web Hosting.
Equity Finance in China
Overview
Minimum Investment and Capital Contribution Schedule
Minimum Capital Requirements
China's foreign investment laws set specific minimum Registered Capital requirements. For Limited Liability Companies (LLCs), including Joint Ventures and Wholly Foreign-Owned Enterprises, the minimum is 30,000 RMB (approximately US$4,000). However, in practice, a higher amount is often necessary for approval. For a Foreign Invested Company Limited by Shares, the minimum requirement is significantly higher at 5,000,000 RMB (about US$600,000). It's important to note that certain industries, like insurance and securities, have even higher capital requirements.
Capital Contribution Schedule
There is a discrepancy between the Ministry of Commerce (MOFCOM) and the State Administration of Industry & Commerce (SAIC) regarding which regulations apply to capital contributions.
SAIC Requirements:
- An initial 20% of the Registered Capital is needed.
- The remaining amount must be paid within two years from the date stated on the Foreign Invested Enterprise’s (FIE) Business License.
MOFCOM Requirements:
- A contribution of either 15% of the total Registered Capital or an amount equal to the minimum requirement (whichever is greater) must be made within 90 days of the FIE’s business license issuance.
- The remaining contributions must adhere to this schedule:
- Up to US$500,000: 1 year from license issuance
- US$500,001 to US$1 million: 1.5 years from license issuance
- Over US$1 million to US$3 million: 2 years from license issuance
- Over US$3 million to US$10 million: 3 years from license issuance
- Over US$10 million: Subject to examination and approval authority
Any lump sum payments should be completed within six months of the FIE’s business license issuance.
Industry-specific regulations can influence these requirements. Given the complexities and potential conflicts within Chinese foreign investment laws, it is prudent to comply with industry-specific rules and refer to the Company Law if there are no specific regulations.
You can find the original non-AI version of this article here: Equity Finance In China.
You can browse and read all the articles for free. If you want to use them and get PLR and MRR rights, you need to buy the pack. Learn more about this pack of over 100 000 MRR and PLR articles.