Companies established after the enforcement of the new Company Law

With the entry into force of the new Chinese Company Law on December 29, 2023, an important change has been introduced to the regulation of limited liability companies regarding the registered Capital. Specifically, companies established after the enforcement of the new Company Law (July 1, 2024) must pay their share capital within 5 years from the date of establishment. In detail:

– Article 47 states that for companies formed after the new regulation’s entry into force, the registered capital must be fully paid within five years from the date of incorporation. It should be noted that this requirement significantly changes the current situation by imposing a deadline for the full payment of the registered capital, which previously was not present.

– Article 266 essentially provides that companies established before the current law’s enforcement should bring their capital contributions within the provisions and rationale of the new regulation according to specific implementations rules that will be issued by the State Council.

In other words, for the already established companies, there is no peremptory deadline for the payment of Capital, and likely, in the course of the next five years, there will be additional provisions to regulate when and if the 5-year term should be applied.

Our team of professionals is available to assist you in interpreting and assure compliance to new regulations.