Registered Capital (RC) and Total Investment (TI) are key terms for foreign-invested enterprises in China that differ from western concepts of share capital and share capital plus loans. RC is the amount registered and paid in, with no shares or par value, and can be injected in installments. TI determines the maximum amount that can be borrowed. RC must come from the foreign parent company and be converted to RMB, while TI and RC ratios restrict maximum borrowing based on the size of the investment. Proper understanding of these terms is important for foreign investors setting up companies in China.

1. BUSINESS ｜商业
Registered Capital & Total Investment
FOR FOREIGN-INVESTED ENTERPRISES (FIEs) IN NINGBO
An Executive Description of Two Key Terms to all FIEs
in P.R. China
宁波外资企业的注册资金及总投资额
适用于中国所有外资企业的两个关键术语
By ( 作者 ): Helge Hareland
Helge Hareland
R
egistered Capital (‘RC’) and Total 4. Approved Capital and a capital verification report (‘CVR’) shall
Investment (‘Ti’) are terms that The RC can be injected in the form of (a) be made by an authorised auditor firm. You
most get to hear about early, when cash, (b) fixed assets and (c) intangible can normally not start using the injected funds
preparing to set up their first manufacturing assets. The cash proportion shall cover at before the CVR has been made.
company (‘WFOE’), trading or service least 30% of the total RC. The remaining part
company (‘FICE’) in P.R. China. RC is the can be injected in the form of fixed assets and 9. Write-downs
Chinese equivalent to Share Capital. Ti is intangible assets. It is common to limit the Once the RC has been registered and fully
the Chinese equivalent to Share Capital plus amount of intangible assets to maximum 20% paid up, it is normally impossible to write
Loan Capital. I will in this article focus on the of the total RC for foreign invested enterprises it down, and get the written down amount
major differences between China and 'the (a higher portion is often allowed for JVs and paid out as dividends. On the other hand, it
west'. CJVs i.e. Joint Ventures and Contractual Joint is possible to get the registered RC written
Ventures). Customs duties and VAT must be down, with an amount equal to what remains
1. No Shares paid if injecting (importing) fixed assets. to be paid up, subject to the already paid up
A WFOE or FICE is a limited company. amount exceeding the minimum RC or P.R.
However, the owner ’s capital or RC is 5. Source China i.e. RMB 100,000 or roughly USD
not denoted in shares. The RC is instead The source of the RC shall be the registered 16,000.
recognised by the total amount registered and mother-company of the WFOE or FICE. RC
paid in. injected by a sister or related company will 10. Gearing
never be approved, and is synonymous with Where the company laws in ‘the west’ calls
2. No Par Value weeks (if not months) of ‘repair work’, trying to for the board to secure that one’s company is
There is no ‘par value’ tied to the RC, due to rectify ‘the mistake made’. ‘sufficiently capitalised’, the Chinese company
the RC being recognised by the total amount laws, regulations and practises operate with
registered and paid in. This in itself calls for 6. Currency a far more absolute set of guidelines, leaving
you to think well through the legal structure The RC can be denoted in more or less all of you with far less room for interpretation
of yours before initiating an incorporation the world’s major currencies. The RC cannot and estimation. The size of your Chinese
process in P.R. China. be injected in the form of RMB (and the RC company’s RC will determine the maximum
of your WFOE or FICE shall be injected from size of its ‘Ti’, where the difference between
3. Injection in Installments abroad by the registered mother-company). your company’s Ti and its RC represents the
You decide through your company’s ‘Articles of maximum amount your company can borrow
Association’ whether the RC shall be injected 7. Conversion (Loan Max = Ti – RC). The Loan Max covers
in ‘one-go’ or instalments. If injecting in ‘one- Registered mother-company loans and loans, intercompany loans and prepayments
go’, the entire RC shall be injected within six dividend debts to the mother-company, stated from customers. The gearing matrix related
months from your company’s business license in foreign currency, can be converted to RC. hereto is as follows:
date (‘BLD’). If injecting in instalments, the first Conversion of dividend debts requires that the
15% of the RC shall be injected within three related withholding tax must have been paid
TI RC LoanMax
months from your company’s BLD, whereupon prior to the initiation of a conversion to RC. USD 0 -
the remaining 85% of the RC shall be injected Min 70% Max 30%
3,000,000
within 24 months from the BLD (the 15/85 pct 8. Capital Verification USD 3,000,000 -
Min 50% (or USD 2,100,000) Max 50%
instalment scheme is replaced by a 20/80 pct The paid up RC shall be paid into your 10,000,000
USD 10,000,001
scheme if you, later on, should register an WFOE’s or FICE’s capital account, whereupon - 30,000,000
Min 50% (or USD 5,000,000) Max 60%
increment to the already registered and paid the capital injection shall be verified by SAFE USD 30,000,001+ Min 50% (or USD 12,000,000) Max 67%
up RC). (State Administration for Foreign Exchange),
30 ningbo focus December 2012 www.ningbofocus.com

2. BUSINESS ｜商业
Closing Remarks 是几月）的时间来纠正这个错误。 总投资额 注册资金 最高贷款额
RC and Ti represent two of several terms 0 - 3,000,000 美元 最低 70% 最高 30%
3,000,000 -
riddled with differences compared to their 6. 货币 10,000,000 美元
最低 50% ( 或 2,100,000 美元 ) 最高 50%
equivalents in ‘the west’. Similar differences 大部分世界上的主要流通货币都可以用作 10,000,001 -
最低 50% ( 或 5,000,000 美元 ) 最高 60%
apply to more or less all terminology that 为注册资金。注册资金不能以人民币的形式注 30,000,000 美元
30,000,001 美元以上 最低 50% ( 或 12,000,000 美元 ) 最高 67%
you will encounter during the planning, 入（你的制造企业或贸易服务公司的注册资金
incorporation and operating phase of 应该由注册母公司从国外注入）。
your WFOE or FICE. It is hence my 结束语
recommendation that you seek help, support 7. 转换 在中国有好多术语相比起类似的西方术语
and advice from foreigners ‘whom have done 注册母公司放出的以外币形式的贷款和借 都有着不同之处，而注册资金和总投资额只是
it before’ before initiating an incorporation 款能够转变为注册资金。将股息债务转换为注 代表了其中的两个。相似的差异也会在几乎所
process in P.R. China. Herein, as the same 册资本前，相关的代扣所得税必须已经支付。 有你在计划、注册和经营你制造企业或贸易服
‘differences’ are not necessarily visible to 务公司的阶段中所遇到的术语中得以体现。我
Chinese advisors and incorporation service pr 8. 验资 会建议你在开始启动注册程序之前，向已经在
oviders. ■ 以付清的注册资金应将纳入你制造企业或 中国成立公司的外国人寻求帮助、支持和意见，
贸易服务公司的资本账户，因此资本注入应经 因为中国的顾问和注册服务提供者并不太了解
Photo by: Helge Hareland 国家外汇管理局查实，还需要授权审计事务所 这些差异。 ■
具的验资报告书。在验资报告书出具之前，你
图片来源：Helge Hareland
通常不能够使用注入的资金。
注册资金和总投资额是准备在中国注册制
造企业、贸易或服务公司时经常能够听到的术 9. 资产减值
语。中国的注册资金等同于股份资本，而总投 一旦注册资本被注册并全部付清后，通常
资额等同于股份资本加上借入资本。在这篇文 不可能减值，也不能将减值总额以股息的形式
章中，我会着重解释在中国和在西方注册公司 支付。 另一方面， 将注册资产减值也是可能的，
时的不同之处。 减值的总额为未付清的那一部分，但是已付清
部分的总额并需超过中国法定的最低注册资本
1. 没有股份 额，也就是 10 万元人民币或大约 1.6 万美元。
一家制造企业或贸易服务企业是有限公
司。然而，所有者的资本或是注册资金并不以 10. 公式
股份形式表现。注册资金是注册时所投入的资 在西方，公司法要求董事会确保某人的公
金总数。 司有着充足的资金，而中国的公司法规有着严
格的规定，你几乎不能够钻空子。你中国公司
2. 无票面价值 的注册资金将决定其总投资额，你公司总投资
由于注册资金是注册时所投入的资金总 额与注册资金的差额便是你公司能够贷款的最
数，从而注册资金并不与票面价值挂钩。这让 高贷款额度（最高贷款额 = 总投资额 - 注册资
你在开始启动在中国建立公司的程序时需要仔 金）。最高贷款额包括贷款、短期贷款和来自
细地思考你公司的法律构架。 客户的预付款。公示表请见下：
3. 分期注入
根据你公司的章程，你决定注册资金应该
是一次性投入还是分期投入。如果是一次性投
入，那所有的注册资金并须在你公司营业执
照的起始日期后的六个月中投入。如果是分
期投入，15% 的注册资金须在你公司营业执
照的起始日期后的三个月中投入，其余 85%
的注册资金须在你公司营业执照的起始日期
后的 24 个月中投入（如果你以后将在原有的 The Author Helge Hareland is the Founding Partner
注册资本上增资，那分期投入的比例将由从 at Hareland Capital Ltd. (www.hareland.com) and
15% / 85% 变为 20% / 80%）。 Chairman at Point Services (Ningbo) Co. Ltd. (www.
point-services.net). Helge has been living and working
4. 批准资本 in Ningbo since July 2000. In addition to be an
注册资金可以以（1）现金、（2）固定 investor and company owner, he is also a specialist
资产和（3）无形资产的形式投入。其中，现 in corporate structuring and financing. Helge is an
金投入的比例需占 30% 以上。其余的部分可 advisor to foreign investors planning to invest in
以以固定资产和无形资产的形式投入。对于外 China and Chinese investors seeking investment
资企业来说，将其的无形资产的总量限制为 opportunities abroad. He can be reached at info@
20% 是非常普遍的做法（合资企业和契约式 hareland.com and advisory@point-services.net.
合资企业允许有更高的比例）。如果注入（进
口）固定资产，那必须支付关税和增值税。 作者 Helge Hareland 是 Hareland 资本有限公司（www.hareland.com）的创建人，同时也是
Point 服务（宁波）有限公司（www.point-services.net）的董事长。Helge 从 2000 年 7 月开始
5. 来源 便在宁波居住工作。他除了投资、自营企业之外，还是一个企业组织和理财方面的专家。Helge
注册资金的来源应该是制造企业和贸易或 为想在宁波投资的外商以及想去国外寻求投资机遇的中国人做顾问。您可以通过以下网址联系
服务公司的母公司。由姐妹公司或相关公司投 到他：info@hareland.com 和 advisory@point-services.net。
入注册资金将绝不会被批准，你将有几周（或
www.ningbofocus.com December 2012 ningbo focus 31