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China 5-Year Capital Contribution Rule — Basics

China’s revised Company Law tightened how quickly shareholders must pay in subscribed capital. FIEs that used long contribution schedules need a plan—not a hope that legacy terms remain untouched.

Author China Law List Editorial · Reviewer Peter Ye · Last reviewed · 2 min read · Editorial policy · AI content policy · Disclaimer · Not legal advice — confirm current rules with counsel and authorities
  • Type Definition-first explainer
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Definition

The five-year capital contribution rule generally requires limited liability company shareholders to fully contribute subscribed registered capital within five years of establishment (with transitional arrangements for older companies). Exact application depends on company type, articles, and transition guidance.

At a glance

  • Check articles of association and unpaid capital schedules now
  • Transition periods may apply to companies formed under older rules—model the deadline
  • Creditors and counterparties care about paid-in capital and disclosure
  • Directors and the board have duties around capital contribution enforcement
  • Capital reduction or restructuring may be alternatives—each has procedure and creditor notice risks

How it works in practice

Finance and legal should reconcile SAMR filings, bank capital accounts, and group funding plans. Foreign parents that “subscribed large, paid small” should stress-test cash and FX timelines for contribution or reduction. Pair with legal-representative and chop control if governance is weak.

FAQ

Does this apply to joint ventures?

Generally yes for limited liability companies, including FIEs structured as LLCs. Confirm articles and transition rules for your formation date.

Can we just amend to a longer schedule?

Post-reform flexibility is constrained. Arbitrary extensions that conflict with statutory clocks are high risk—get counsel before amending.

Deep guide?

5-year capital deep page · Corporate lifecycle guide.

Go deeper

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