The registered capital of a WFOE is the amount that is required to run the business until it can break even, and may be as low as 100, 000 renminbi.

FORBES: Staking Out Your Market Position In China: Part II

Depending upon the amount of registered capital invested, the foreign shareholder may make shareholder loans to the WFOE, with payments of interest and repayment of principal not subject to profitability.

FORBES: Staking Out Your Market Position In China: Part II

Registered capital is the default metric for financial risk assessment here (a very poor tool, but it is what it is), and the government typically includes requirements related to industry experience in an attempt to raise the bar slightly for market entry, thereby keeping out the inexperienced tyros that would be likely to fail.

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