For data to become capital, it can't simply be a matter of "I have data." It must first withstand scrutiny from four gates: rights, valuation, compliance, and accounting. Can data, like cash, real estate, or patents, be used as capital contribution in a company? Legally, this doesn't start from scratch. The Company Law has always allowed shareholders to contribute non-monetary assets, provided that the assets can be valued in monetary terms and legally transferred. The problem is that data assets fall precisely between these two conditions: it may certainly have value, but how is that value proven? It may certainly be traded, but how are the boundaries of rights defined? It may certainly enter into business operations, but whether it can truly become company capital has always lacked a set of enforceable, registerable, and traceable operational rules. This is why, despite much talk in the past few years about "data assetization," "data element entry into tables," and "data trading and circulation," when it comes to the hard scenarios of company establishment, capital increases, and equity structure adjustments, everyone remains extremely cautious. The key question has remained unanswered: if a shareholder contributes a data package as capital contribution, how do other shareholders determine whether it's worth that price? How do creditors determine if a company's capital is truly sufficient? What happens to this data if the company goes bankrupt and is liquidated? Without institutionalized answers to these questions, data-based equity investment struggles to move from concept to transaction. Zhejiang has taken a step forward. On May 16th, the Zhejiang Provincial Market Supervision Administration issued the "Notice on Regulating Data Intellectual Property as Capital Contribution (Equity Investment)," specifically addressing matters such as data intellectual property valuation for capital contribution, company registration, rights transfer, and asset accounting. The notice will take effect on June 22, 2026. Its significance lies not in suddenly declaring "data can be used as money," but in advancing data intellectual property valuation for equity investment from "feasible in principle" to "operable in process." More accurately, this notice doesn't provide the final answer to data capitalization, but rather an operational entry point into the company's capital system. For data to become an investment target, it cannot remain merely at the level of internal control and actual possession within the company. It needs to go through registration, evaluation, articles of association recording, business registration, rights transfer, and accounting entries to gradually transform from a "resource" into a "property right" that can be recognized by the company law system. ### 01 Why can data intellectual property rights be used as a capital contribution? According to Article 48 of the revised Company Law of 2023, shareholders can contribute capital in the form of currency, or in the form of non-monetary property that can be valued in monetary terms and legally transferred, such as tangible assets, intellectual property rights, land use rights, equity, and debt. There are two key words here: valuable and transferable.Traditional intellectual property rights are relatively easy to fall under this set of rules. Patents have authorization documents, trademarks have registration certificates, and copyrights have relatively mature ownership and transfer arrangements. Even if there are disputes over valuation, at least the form of rights is relatively clear. But data assets are different. Whether a set of data is a thing, intellectual property, contractual rights, trade secrets, or a property interest formed based on legitimate control and use, there is no completely unified answer under current law. If the data set is original in its selection and arrangement, it may be protected by copyright law; if the relevant data is secretive and valuable and confidentiality measures are taken, it may fall under trade secret protection; if others obtain or use the data in an improper manner, it may also be remedy through the Anti-Unfair Competition Law. But in many scenarios, the data held by enterprises does not necessarily correspond to a certain typical right. It may be very valuable, but it may not have a clear "identity card" like a patent or trademark. The data intellectual property registration system promoted in Zhejiang is precisely trying to fill this gap. It should be noted that the registration certificate should not be simply understood as a strong exclusive right like a patent right, nor can it be said that registration automatically excludes all third-party claims. A more robust understanding is that it provides preliminary proof and public notice for data holding, data source, data rights ownership, and data circulation. This is already important enough. The biggest challenge in using data as equity investment is not that companies are unaware of the data's value, but rather that this value lacks a verifiable legal basis. Without registration, if an investor claims to possess a set of data, it's difficult for other shareholders, creditors, and registration authorities to verify this. After registration, at least a verifiable, modifiable, and traceable rights carrier is established. The notice uses "acquiring data intellectual property rights through registration or transfer" as the starting point for equity investment, essentially using a registration and public notice mechanism to alleviate the uncertainty of rights in data investment. ### 02 Two Processes, Corresponding to Two Company Scenarios The most pragmatic aspect of the notice is that it doesn't stop at a declaration of principles but breaks down the process into two categories: newly established companies and existing companies. While superficially similar, they correspond to different corporate law actions. Newly Established Companies: The core is "moving" data rights into the company. For newly established companies, the core issue is: how can data intellectual property rights enter the future company's capital structure before the company is even established?The notice outlines a process whereby the investor first acquires the data intellectual property rights through registration or transfer. Then, during the company's establishment process, the investor completes the valuation, articles of association recording, and registration. Finally, the data intellectual property rights are transferred from the investor's name to the company's name, and the assets are recorded in the company's books. 1. Acquisition of Rights: The investor first acquires the data intellectual property rights to be contributed and completes registration or transfer at the Zhejiang Provincial Data Intellectual Property Registration Center. 2. Valuation: Non-monetary assets cannot be valued by the shareholders themselves; a valuation report must be issued by a third-party valuation agency. 3. Articles of Association Recording: The company's articles of association should specify the method of contribution, amount, corresponding equity ratio, and completion time of the contribution. 4. Business Registration: When registering the company's establishment, the data intellectual property rights are included in the registered capital, and "Intellectual Property Rights" is selected as the "Form of Contribution." 5. Transfer of Rights and Recording of Assets: The contributed assets must be genuinely transferred from the shareholder's name to the company's name and recorded in the company's accounting books. The notice also specifically requires that the validity period of the data intellectual property rights, including the renewable period, must comply with the accounting management requirements of enterprise accounting standards regarding the amortization of intangible assets. This requirement, while seemingly technical, is actually crucial—if a data intellectual property right before its expiration is used as registered capital at a high price, the company's capital adequacy will be significantly at risk. The notice also designs a more practical "pre-change" mechanism. For newly established joint-stock companies and other companies in industries implementing a paid-in capital registration system, a pre-change of data intellectual property rights can be processed based on the approved company name, with the formal change filing completed within one month of the company's establishment. This arrangement addresses the temporal dilemma of "which comes first, the company or the change of rights": before the company is established, rights cannot be transferred; without the transfer of rights, it's difficult to say that capital contribution has been completed. The pre-change mechanism essentially builds a regulatory bridge between the two. For existing companies: the real sensitivity lies in the adjustment of shareholder interests. The process for existing companies involves more capital increases and share expansions. Once the company is established, using data intellectual property rights as equity usually means an increase in registered capital and a change in equity structure. According to Article 66 of the Company Law, resolutions such as increasing registered capital must be passed by shareholders representing more than two-thirds of the voting rights. In other words, in the context of existing companies, the real sensitivity is not the registration process itself, but the adjustment of interests between old and new shareholders.If a controlling shareholder contributes a set of data intellectual property rights at a high price, minority shareholders may be diluted; if external investors contribute data assets, existing shareholders need to determine whether the valuation is fair; an increase in the company's book capital may seem to provide creditors with an extra layer of protection, but if the data valuation is significantly inflated, this protection may just be an illusion. Therefore, for data contributions in existing companies, in addition to completing assessments, resolutions, changes in rights, amendments to articles of association, asset registration, and equity transfer registration, more attention should be paid to related-party transactions, fair valuation, information disclosure, and minority shareholder protection. ### 03 The real difficulty lies in the fact that rights, valuation, and compliance notifications have advanced the operational process, but several hard issues in practice will not automatically disappear. First, the boundaries of rights still need to be examined. Data intellectual property registration certificates can provide preliminary proof and publicity, but they do not automatically resolve ownership disputes. Data may originate from users, platforms, partners, and suppliers, and may have undergone multiple cleaning, processing, labeling, and modeling processes. Who has rights to the original data, who has rights to the processed results, and whether the contract stipulates that it is transferable, can be contributed as capital, or can be reused—all of these need to be examined separately. If a third party raises objections after the investment is completed, or if the data source is deemed flawed, the company's capital adequacy and asset authenticity will be affected. Secondly, valuation is most prone to problems. Data assets are most easily overvalued and undervalued. It's not about the volume of data or the number of files stored on servers, but whether the data can continuously generate economic benefits in a specific business scenario. The same set of consumer behavior data may be highly valuable to a precision marketing company but have limited value to a traditional manufacturing company; the same set of industrial equipment data may be a core asset if used for predictive maintenance, algorithm training, and product iteration, but may simply be a sunk cost if it lacks usage scenarios and compliant authorization. Valuation agencies face practical difficulties when using the income approach, cost approach, or market approach. The income approach requires predicting future cash flows, but the revenue generated by data is often embedded in the overall business and difficult to separate; the cost approach can calculate the costs of collection, cleaning, storage, and maintenance, but may not reflect the true market value; the market approach is limited by insufficient comparable transactions. Therefore, the biggest risk of valuing data intellectual property as equity is not the lack of an valuation report, but rather that while the valuation report may appear complete, its key assumptions may not withstand scrutiny. Third, data compliance cannot be covered by registration certificates.Data intellectual property investment is not simply a transfer of rights; it often signifies the continuation of data processing activities and compliance responsibilities. If the data involves personal information, the acquiring company may become a new personal information processor, subject to obligations under personal information protection laws. Whether the data collection was legal, the authorization sufficient, the processing purpose clear, whether it involves sensitive personal information, and whether there is excessive use or illegal sharing—these issues cannot be covered by registration certificates and evaluation reports. This is where data investment differs from traditional intellectual property investment. Patent and trademark investment primarily examines ownership, validity, licensing burdens, and infringement risks; data investment must also examine the data source, processing process, authorization chain, security protection, cross-border flow, and personal information compliance. Without this layer of due diligence, so-called data assets may not be assets at all, but rather another way of describing risk. Fourth, accounting entries still need to adhere to accounting standards. The Ministry of Finance has issued accounting treatment rules related to corporate data resources, and the entry of data assets into the balance sheet has moved from policy advocacy to specific accounting treatment. However, whether it can be entered into the balance sheet, how it should be entered, and whether it should be treated as intangible assets or inventory, all need to return to the recognition conditions of corporate accounting standards. How to connect the appraised value in capital contribution, the capital contribution amount in business registration, and the amount recorded in financial statements still requires more detailed operational guidelines in the future. It cannot be simply assumed that as long as it has been appraised and registered, it can naturally be recorded at the appraised value. ### 04 What has this notice truly changed? Looking at this matter within a broader institutional context, this notice from Zhejiang is a concrete step in the market-oriented reform of data elements. For data to become a factor of production, it cannot merely be a "useful" resource within enterprises; it must also be able to be confirmed, registered, appraised, traded, financed, and recorded in financial statements, ultimately entering the company's capital and financial system. In the past, many companies knew they had data, but this data often remained buried in their business systems, making it difficult to trade externally, present as an asset on the balance sheet, or enter into equity financing and corporate governance structures. The path offered by Zhejiang this time is to use data intellectual property rights as an institutional interface, allowing data to gradually shift from factual control to the expression of rights, and then from the expression of rights into capital arrangements. This path is not complicated, but it is crucial: 1. First, register to identify rights; 2. Then, evaluate to establish a basis for valuation; 3. Then, change the registration to transfer the rights to the company; 4. Finally, record the transaction to bring the assets into the financial system; 5.Finally, through business registration and articles of association arrangements, it becomes part of the company's capital structure. Of course, this notice cannot be considered the final solution for data capitalization. After all, it is only a normative document from the provincial market supervision department, with limited legal standing, addressing operational procedures rather than all fundamental legal issues. The nature of data intellectual property rights, their enforceability, and the mechanism for handling objections still need further clarification at a higher level; data asset valuation methods still require industry standards to be established; and the connection between accounting, taxation, company registration, and data compliance also needs more detailed guidance. Therefore, a more prudent assessment is that Zhejiang has not solved all the problems of valuing data assets as equity at once, but it has first drawn up an executable roadmap. The demonstrative significance of this roadmap may be no less than its normative significance. In the future, when other places promote data intellectual property rights, data asset inclusion, data element trading, and data financing, they will likely refer to this experience. ### 05 Opportunities for legal services are also hidden in risks. For enterprises, this notice means a new capital tool. Enterprises with data, scenarios, and a compliance foundation can explore using data intellectual property for company establishment, capital increases, industrial cooperation, and financing arrangements. For legal professionals, the new business scenarios are also clear: data intellectual property registration consultation, due diligence on data asset valuation, review of valuation reports, company bylaws design, capital increase arrangements, personal information compliance review, and data rights dispute resolution. These will gradually unfold as data elements become capitalized. However, the barriers to entry in this field are also very high. It is not simply corporate law, nor traditional intellectual property, nor data compliance in the general sense; rather, it is an intersection of corporate law, intellectual property law, data compliance, asset valuation, and accounting standards. The truly valuable work is not simply writing "data assets" into the bylaws, but answering a series of more specific questions: Where does this data come from? Who has the right to use it? Can it be transferred? Does it involve personal information? Are there any third-party encumbrances? Are the valuation assumptions reasonable? If the rights are challenged, can the company's capital remain intact? The ability to use data as equity is certainly a noteworthy institutional signal. However, this doesn't mean that data is inherently capital, nor does it mean that all data can be packaged as assets. For data to enter a company's capital market, it must first pass the tests of four gates: rights, valuation, compliance, and accounting. This notice from Zhejiang has opened that gate a crack.The real question then becomes: when a set of data is included in registered capital, do we truly know its value, and who bears the risks behind that value? References: "Notice on Regulating the Valuation of Data Intellectual Property as Capital Contribution (Equity Investment)" issued by the Zhejiang Provincial Market Supervision Administration; "Company Law of the People's Republic of China"; "Interim Provisions on Accounting Treatment Related to Enterprise Data Resources" issued by the Ministry of Finance; and relevant public information from the State Intellectual Property Office and Zhejiang's data intellectual property registration system. [paperduoduo]