subject: Register WFOE in Shanghai and paid up capital [print this page] Register WFOE in Shanghai and paid up capital
If you would like to start a business in Shanghai, and starting your career, ,it is better you know some basic rules for Registered and paid up capital .
Here we would like to share some knowledge.
Registered and paid up capital
Registered Capital: USD$140,000 is a decent investment capital for all types of WFOE, with USD$ 140,000 investment it's easy to get approved.
Initial Paid-up would be 20% of the registered capital, the balance should be remitted within 2 years.
According China company law, RMB 100,000 ~ RMB 500,000 is minimum investment capital for Consulting WFOE, Service WFOE, Hi-Tech WFOE registration.
Registered capital is the amount that is required to run the business until it can break even - the 'registered capital' is a guideline only. If you are looking to operate with a minimal amount of registered capital, for instance RMB 30,000 (an amount with which it would be impossible to establish a WFOE in China), this means you will run out of money pretty soon, which leads to increased costs in reapplying for permission to increase capital, additional licensing fees, costs of renewal of business licenses, and so on.
The WFOE needs to have sufficient initial funding via the registered capital until the business can support itself from its own cash flow.
However, the amount of registered capital required will depend upon factors like Scope of Business and Location. In reality, local authorities will review the feasibility study report and check any lease contract, and then approve the investment on a case-by-case basis.? There may be opportunities to negotiate a reduced registered-capital requirement in some cases.
Scope of Business
One of the most important issues in WFOE application is the proposed scope of business. Business scope needs to be defined, and the WFOE can only conduct business within its approved business scope, which ultimately appears on the business license. Any amendments to the business scope require further application and approval. Inevitably, there is a negotiation with the approval authorities to approve as broad a business scope as is permitted. Generally business scope includes investment consulting, international economic consulting, trade information consulting, marketing and promotion consulting, corporate management consulting, technology consulting, manufacturing, etc. With China's entry into WTO, more and more business is open to WFOE especially in Trading, Wholesale and Retail sectors..
