# Registered vs paid in capital in China | Confirm Supplier

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Guide by Confirm Supplier (CNAL Consulting, Spain). Your supplier declares 10 million in capital. The right question is how much has actually been contributed. In China that gap is allowed by law.

## The two concepts

- Registered capital (注册资本): the capital shareholders commit to contribute. A promise on record, not money in the bank.
- Paid in capital (实缴资本): the capital shareholders have actually contributed.
- Subscription system (认缴制): the regime in force since 2014, under which subscribed capital is registered and shareholders set their own contribution schedule.

## What changed in 2014

The reform of the Chinese Company Law in force since 1 March 2014 removed the upfront payment requirement and minimum capital thresholds for most companies. Incorporating a company with 10 million yuan of registered capital no longer required having 10 million: committing to contribute it over periods that could reach decades was enough. Registered capital stopped being an indicator of solvency.

## What changed in 2024

The new Company Law, in force since 1 July 2024, requires shareholders of a limited liability company to pay in the subscribed capital within a maximum of 5 years from incorporation, with transitional rules for existing companies. Many companies are formally reducing their registered capital to match what they can pay in. A recent capital reduction is not necessarily bad news, but it is a fact worth knowing before negotiating.

## Why it affects you as a buyer

- Registered capital is no guarantee of recovery: the company's real ability to respond depends on its assets, not the figure on record.
- The gap is a character signal: declaring 10 million while having contributed 50,000 changes how you read the supplier's other claims.
- In a Chinese limited company shareholders are liable up to the subscribed capital; high subscribed capital with little paid in means outstanding shareholder obligations towards the company itself.

Typical case Confirm Supplier looks for in every report: a supplier boasting millions in registered capital, a record showing that capital subscribed with minimal or unpublished actual contributions, and a company age of two or three years. None of those facts alone is fraud; together they describe a company much smaller than it appears.

## How to check it

1. Registry record on GSXT: the 注册资本 field shows the registered capital.
2. The company's annual reports (企业年报) on GSXT: companies declare each shareholder's contributions. Self reported and not always complete, but the gap usually shows here.
3. Professional sources: Chinese business information platforms and legal databases reserved for licensed lawyers, which also reveal capital reductions, share pledges and shareholder disputes.

## Quick questions

- Does low paid in capital disqualify a supplier? Not by itself. What disqualifies is the inconsistency between the claims and the reality.
- Does paid in capital always appear in the registry? Not always directly; it often has to be reconstructed from annual reports and professional sources.
- Does this apply to Hong Kong? No. Hong Kong has its own registry and company regime; this guide refers to mainland China.

A €500,000 order. A €250 report. China Simple Confirmation Report: €250 + VAT. China Due Diligence Report (includes declared versus paid in capital): €900 + VAT.

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