When you set up a WFOE in China, one thing you needs to consider is to how to decide the amount of registered capital of the WFOE. Registered capital is the amount of capital to be contributed by its shareholders to the company.  This amount is usually based on the amount of money needed by the WFOE before the WFOE starts earning sufficient income to cover the WFOE’s cost. It may various from company to company depending the business scope and size of the company. The amount for a WFOE that will build a machinery plant could be far more exceeding the amount for a WFOE to conduct consultation business.

The central China government now has no formal requirement for the amount of registered capital except for specially regulated sectors.

There is also no longer a requirement on when the capital must be contributed and there is no fixed rule on the amount of each contribution of capital. The government generally requires that the total registered capital be contributed within 20 years, which effectively means there is no time pressure on the contribution.
The general practice is that there must be enough capital to cover the operations of the WFOE. In particular, there must be enough capital to cover employee salaries, rent, utilities and government charges and taxes before the WFOE starting earning enough income to cover the above cost.

By Beijing Lawyer Online Service