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ARTICLE · 14 MARCH 2014

China Business Registration Reform

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The State Council issued Notice on Reform Plans of Registration Policies of Registered Capital, providing guidelines on business registration reforms of companies in China.

United StatesGovernment, Public Sector
Sharon Xu
Sharon Xu
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On February 7, 2014, the State Council issued Notice on Reform Plans of Registration Policies of Registered Capital, GuoFa [2014] No. 7 (the "Notice") providing guidelines on business registration reforms of companies in China.  The objective of the reform is to relax the administration on market entry and optimize the business investment environment.

The reform mainly embraces the following areas:

1. Relaxation of capital contribution requirements

Under the current system, there are specific requirements about the timeline and amount of registered capital that needs to be injected to the company.  For example, shareholder should make initial capital contribution of at least 15% of the registered capital within three months of issuance of company's business license and the remaining registered capital within two years of issuance of company's business license. Whereas the new system allows the shareholder to decide on its own the means of capital contribution

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