The registered capital is the investment capital subscribed and/or contributed by all the shareholders to a limited liability company. There is no statutory minimum registered capital requirement for the establishment of a company (including foreign invested companies) in China, except for those operating in certain sectors such as securities, banking and insurance sectors. Although there is no statutory minimum registered capital requirement, the shareholders are recommended to determine the registered capital amount based on the budget for initial operation funds before the company begins to generate enough income to cover its operational costs.

When establishing a limited liability company, the shareholders are not required to contribute or inject the registered capital immediately. The full amount of registered capital subscribed by the shareholders can be contributed or injected within 5 years upon issuance of the business license of the company. The registered capital contributed or injected by the shareholders is not required to be kept in the bank account as a deposit. It can be used to pay daily operation expenses, for example, salary payments, office rents, payments to suppliers, and etc.  

When a foreign invested company runs out of capital, it can apply to increase its registered capital. But increase of registered capital is a time-consuming process that involves multiple government authorities, including the registry office, tax bureau, foreign exchange administration bureau, opening bank, and etc.

The total investment amount determines the maximum investment amount (including the registered capital and loans) that can be injected by foreign shareholders to a foreign invested company. The difference between the total investment amount and the registered capital is not required to be actually injected to the company by the shareholders. However, the difference can serve as the foreign debt quota that a foreign invested company is allowed to borrow for financing. Therefore, foreign shareholders can set the total investment amount at the maximum amount permitted by law in order to have flexibility for future financing.