Registered Capital Is a Schedule You Have Promised to Meet
Since 2015 foreign exchange registration for direct investment has been done at the bank, not the regulator. That made capital injections faster and made a mismatched contribution schedule harder to hide.
HainanInc Corporate Advisory
· 4 min read
Registered capital is chosen in an afternoon, usually as a round number that sounds substantial enough to open doors. It is then a schedule the entity has publicly undertaken to meet, on a timetable it has itself declared, and the gap between the figure chosen for appearances and the funding the business can actually deliver is one of the more persistent sources of trouble in a young Hainan entity.
Registration moved to the banks a decade ago
The administrative shape of capital injection is set by the State Administration of Foreign Exchange's Notice on Further Simplifying and Improving Foreign Exchange Administration Policies for Direct Investment (关于进一步简化和改进直接投资外汇管理政策的通知, 汇发〔2015〕13号), in force since 1 June 2015. It abolished foreign exchange registration approval for direct investment and moved the registration itself to banks, which now handle it directly for both inbound and outbound direct investment. It also replaced the annual foreign exchange inspection with equity registration reporting.
The practical consequence is that the bank is the control point. Nobody at a regulator is separately checking that the remittance matches the declared schedule; the bank is doing it, at the moment the money arrives, against what was registered. A mismatch between the registered schedule and the incoming payment is the most common reason a capital injection stalls, and it stalls with the funds already in transit.
The foreign exchange and registration rules
- Notice on Further Simplifying and Improving Foreign Exchange Administration Policies for Direct Investment (关于进一步简化和改进直接投资外汇管理政策的通知, 汇发〔2015〕13号) — State Administration of Foreign Exchange — in force 1 June 2015 — abolished direct investment foreign exchange registration approval and moved registration to banks; replaced annual foreign exchange inspection with equity registration reporting.
- Hainan Free Trade Port Regulations on the Registration Administration of Market Entities (海南自由贸易港市场主体登记管理条例) — in force 1 May 2024 — registration of capital particulars and the obligation to file changes.
- Notice on Enterprise Income Tax Preferential Policies for the Hainan Free Trade Port (财税〔2020〕31号), continued by 财税〔2025〕3号 to 31 December 2027 — the substantive operation condition, which requires the basic deposit account and the main-business settlement account to be opened in the Free Trade Port.
- All positions above verified against the issuing bodies' published texts in September 2026.
Why an inflated figure is not a free option
An overstated registered capital carries three costs that are invisible at the moment it is chosen. It creates a subscribed obligation the shareholders are expected to meet on the declared timetable. It shapes what counterparties, landlords and banks expect of the entity's balance sheet. And when the schedule is not met, the shortfall is a matter of public record on the registration file rather than a private funding decision — which is precisely the wrong place for it to surface during a transaction, a licence application or a credit review.
Understating carries the mirror problem: a schedule too small to fund the operating plan means either a capital increase filing later, or an entity running on shareholder loans with the cross-border and tax questions those bring. Neither is fatal. Both are avoidable by sizing the schedule against the funding plan the group actually has rather than against the impression it wants to make.
The figure is chosen for how it looks. The schedule is what the company is then held to.
Where the account is opened is also a tax question
Banking arrangements set up at formation feed directly into the substantive operation condition behind the 15% corporate income tax rate. That condition requires the enterprise's basic deposit account and the account through which its main business settles to be opened in the Free Trade Port, and requires wages and salaries to be paid through a Free Trade Port account. An entity that banks its operating flows through a group account elsewhere for convenience has made a treasury decision that quietly weakens its tax position, and the two decisions are almost never taken by the same people.
What gets tracked, tranche by tranche
- A contribution schedule sized to the funding plan and stated in terms the shareholders can actually meet.
- Foreign exchange registration filed with the receiving bank and matched to the schedule before funds move.
- The capital account opened and linked to the registered schedule rather than treated as a general operating account.
- Each tranche tracked against its scheduled date, with verification support at the point of contribution.
- The basic deposit and main settlement accounts opened in the Free Trade Port, consistent with the substance position.
- Change filings made where the schedule or the capital particulars are amended.
Sizing the schedule, then tracking every tranche
Our registered capital and foreign exchange registration work sizes the schedule before it is filed, then registers and tracks each tranche as it lands, coordinating with the receiving bank so the registration and the remittance agree on both sides rather than being reconciled after a payment has been held. Where the entity is being set up from scratch this runs directly out of Entity Structuring and Registration; where an existing entity has drifted from its declared schedule, it is usually the first thing an entity health check surfaces.
This is general commentary on published policy, not advice on a specific capital or foreign exchange position. Bank practice varies and requirements change; confirm the current position with the receiving bank before relying on any of the above. Positions were verified against published sources in September 2026.