On October 25, 2013, Premier Li Keqiang chaired an executive
meeting of the State Council, and announced during the meeting that
China is going to push forward the reform of the company
registration regime, which will support a faster pace of economic
reform in China and "arouse social investment
The five reform policies announced in the executive meeting were
reported by the official website of China State Council two days
later on October 27, 2013. On November 7, the Information Office of
the State Council held a press conference regarding this remarkable
meeting of State Council. Zhang Mao, the Director of the State
Administration for Industry and Commerce (SAIC) briefed the new
policies in the press conference. According to the official report
of State Council and the information in the press conference, the
executive meeting confirmed the policies as follows:
1. Relaxing the registered capital requirements for
setting up a company: The minimum registration capital of
RMB 30,000 (around USD 5,000) for limited liability companies will
be cancelled as well as the RMB 100,000 (around USD 16,667) minimum
for single shareholder companies and the RMB 5,000,000 (around USD
833,333) minimum for joint stock companies. In addition, the ratio
of the initial payment and the deadline for full contribution will
be cancelled. Further, the actual capital contributions of the
company will no longer be a registration item for
2. Replacing annual inspection regime by annual report
regime: The current annual inspection regime will be
substituted by annual report regime. Such annual reports shall be
available for all entities and individuals for inspection.
Transparency of the company information shall be promoted.
3. Relaxing the registration conditions of the
enterprise business residence: The State Council will
delegate the legislation power regarding the registration
conditions of the "business residence" to local
governments based on the understanding that the upcoming local
rules shall relax the registration conditions for more convenient
4. Developing the enterprise credit system:
Information including the registration record, the annual reports
and the business qualifications shall be disclosed and shared
through the enterprise credit system. Electronic records are
encouraged and an electronic business license shall have the same
effect as a hard copy of the business license. A
"blacklist" will be established and updated which will
record non-compliance by specific companies, and such
"blacklist" shall be made public through the
to-be-developed credit system.
5. Changing the paid-up registration regime to a
subscription regime: The actual capital contribution
regime will be replaced by subscribed capital regime, which will
lower the costs for incorporation. The new regime will require the
company shareholders (founders) to voluntarily subscribe the
capital contribution, form of contribution and due date of
contribution. At the same time, the company shareholders (founders)
are responsible and liable for the authenticity and legitimacy of
These new policies will result in legislative amendments to
Company Law, Sino-foreign joint venture laws and other foreign
investment laws and regulations. Zhang Mao, the Director of SAIC,
revealed in the press conference that SIAC is now cooperating on
the legislation work of the State Council. The new policies cannot
be fully implemented until the rules are strictly in accordance
with the reform.
Zhang Mao also commented that based on the principle of national
treatment, all foreign-invested enterprises will enjoy the same
reformatory polices. These new policies indicate the investment
climate of China will be further improved as company profiles
become more transparent.
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