China's revised Company Law takes effect, with a five-year limit to pay in capital
China's revised Company Law took effect on 1 July 2024. Shareholders of a limited liability company must pay their subscribed capital in full within five years of incorporation. Under State Council provisions issued the same day, companies formed before then whose remaining payment period runs more than five years beyond 1 July 2027 must shorten it by 30 June 2027, so that capital is paid by 30 June 2032 at the latest.
The revised Company Law of the People's Republic of China was adopted in December 2023 and came into force on 1 July 2024. On the same day the State Council issued provisions on the registered capital registration system, setting the transition for existing companies.
What changed
- New companies: shareholders of a limited liability company must pay subscribed capital in full within five years of incorporation. Promoters of a joint stock company must pay in full before incorporation.
- Existing companies: if the remaining payment period at 1 July 2027 is more than five years, the company must amend its articles by 30 June 2027 so that capital is paid by 30 June 2032.
- Existing joint stock companies: outstanding subscribed shares must be paid by 30 June 2027.
- Abnormal capital: companies with a payment period over 30 years or registered capital above RMB 1 billion that the regulator considers abnormal can be required to adjust within six months.
- Failures to adjust can be publicly disclosed.
Who is affected
All Chinese companies, including foreign-invested enterprises, and their shareholders and boards.
What to do
Check each entity's capital payment schedule against the 2027 and 2032 dates and plan amendments to the articles or capital reductions.