Taiwan Company
Incorporation Services
Company Incorporation in Taiwan
Advantages of Establishing a Company in Taiwan
Prime Location: Taiwan’s strategic location in the Asia-Pacific region allows access to global production resources and markets, with short flight times to major cities.
Competitive Tax Rates: Taiwan offers favorable corporate income tax rates at 20%, lower than neighboring countries like Japan, Korea, and China, and boasts a 5% VAT rate.
Streamlined Banking: Setting up business bank accounts and conducting international fund transfers is relatively straightforward with the necessary documentation.
Work Permit Ease: Taiwan simplifies work permit issuance for foreign professionals, coupled with attractive income tax incentives.
Special-Purpose Zones: The government has established various specialized zones to cater to evolving business needs, including export processing zones, industrial parks, science parks, and free trade zones.
Diverse Industrial Clusters: Taiwan’s industrial landscape encompasses electronics, technology, precision machinery, petrochemicals, and heavy industry clusters, facilitating efficient supply chains and customized solutions.
Intellectual Property Protection: Taiwan’s transparent intellectual property laws align with international treaties, adapting to evolving business and legal standards.
Skilled Workforce: Taiwan boasts a well-educated labor force thanks to its universal education system, with over 300,000 new graduates annually and 51% of the workforce holding at least a bachelor’s degree.
Disadvantages of Establishing a Company in Taiwan:
Global Income Taxation: Taiwan employs a global-wide corporate income tax system, subjecting both offshore and onshore income of registered businesses to Taiwan’s corporate income tax. Businesses in Taiwan can utilize foreign tax credits to offset their income tax liability for taxes paid in other countries.
Starting a Business in Taiwan: A Comprehensive Guide
Choosing Your Business Structure
| Limited Company/ Limited Company by Shares | Branch | Representative Office | |
|---|---|---|---|
| Minimum Capital |
NTD$1 (Note 1) |
NTD$1 (Note1) |
Not applicable |
| Business Scope | Listed in the Article of Association A special license may be required. (e.g., travel, logistics) | Listed in the Article of Association A special license may be required. (e.g., travel, logistics) | Market research, negotiation, signing contracts, and others (You cannot have sales.) |
| Management Requirement |
Investor: 1 individual or entity Director: 1 individual (Note 2) |
Representative: 1 individual | Representative: 1 individual |
| Limited Liability | Yes, limited to the amount of capital | Not applicable | Not applicable |
| Audit requirement | Depends on sales, capital, number of employees, and industry | Depends on sales, capital, number of employees, and industry | No |
| Corporate Income Tax | 20% | 20% | Not applicable |
| Business Tax | 5% | 5% | No |
| Withholding Tax on Dividend/Earning Distribution | 21% | Not applicable | Not applicable |
Note 1: Local regulations stipulate that the capital must be sufficient to cover initial operational expenses.
Note 2: A limited company by shares must have at least one individual supervisor.
Company Registration Procedure and Required Documents in Taiwan
Setting up a Limited Company, Limited Company by Shares, or Branch
Name Reservation:
Foreign investors must select a Chinese name for the company or branch in Taiwan.
The name reservation application should include basic information about the Taiwan entity, such as business activities, the representative’s name, phone number, and address.
Investment Application:
Submit the Investment Application Form and relevant documents to the appropriate MOEA unit.
Opening a Preparatory Bank Account:
A preparatory bank account is required to inject capital.
At this stage, the account is individual and under the proposed Taiwan entity’s name.
The timeframe for bank account opening varies (between 1 and 7 days for local banks and 2 and 4 weeks for foreign banks).
Capital Injection and Audit:
Inject capital from the investor’s overseas bank account in foreign currency.
Seek a local CPA to issue the capital audit report.
If injecting capital from a Taiwan bank account, provide supporting documents explaining the source of funds to the MOEA.
Company/Branch Registration:
Submit the application with the required documents (e.g., application form, office rental agreement, articles of association) to the relevant MOEA unit.
Upon approval, the Taiwan entity is officially established and receives its Taiwan tax ID.
Tax Registration:
Apply to the local tax collection authority to register the business entity in Taiwan.
Attend a tax interview and visit the tax office for further understanding of Taiwan business.
Opening an Official Bank Account:
Transition the preparatory bank account to the official bank account. The timeframe for bank account opening varies (between 1 and 7 days for local banks and 2 and 4 weeks for foreign banks).
Time Frame:
The entire process of setting up a Taiwan business entity may take around 3 to 4 months (with government processing counting for approximately 2.5 months).
Required Documents for Proposed Representative:
- Copy of the representative’s passport
- Power of Attorney
Required Documents for Headquarters:
- Certificate of incorporation
- Articles of association
- Power of attorney
- Organization structure
- Shareholder and director lists of each business entity directly or indirectly holding the Taiwan company (until the ultimate beneficial owner)
- Copy of passport for individual ultimate beneficial owners holding 25% ownership, directly or indirectly
- Investment plan, which includes the Taiwan company’s business model and financial plan
For Representative Offices:
Registration of Representative Office:
Tax Registration:
Required Documents for Proposed Representative:
- Copy of the representative’s passport
- Power of Attorney
Required Documents for Headquarter:
- Certificate of incorporation
- Articles of association
- Power of attorney
- Investment plan, including the Taiwan company’s business model as well as their financial plan.
Is a Visit to Taiwan Necessary for Bank Account Opening?
Most local banks in Taiwan require the company’s representative to visit in person to open a bank account. However, some banks may accept a Power of Attorney (POA) to simplify the process. Here’s a breakdown of the types of banks in Taiwan:
Government-owned Local Banks:
These banks are easy to work with but typically do not accept a POA for account opening. The representative must visit the bank in person.
Privately-owned Local Banks:
These banks offer more flexibility and may accept a POA, but policies vary between banks. Building a good relationship with the bank is essential.
Foreign-based Banks:
These banks are the most flexible in terms of account opening. Some accept POAs or even arrange web meetings. However, they often have specific requirements, such as minimum annual sales or capital amounts, and primarily serve large multinational companies.
Choosing the right bank is crucial, and miscommunication with the bank can lead to delays. It’s advisable to have a Taiwanese agent or a Chinese-speaking representative assist with the bank account opening process.
Please feel free to contact us for more information and assistance.
FAQs About Incorporating in Taiwan
Most local banks in Taiwan require the company’s representative to visit in person for bank account opening. Therefore, if you plan to designate a foreigner as the representative for your Taiwan business entity, they will need to make two trips to Taiwan for the preparatory and official bank account openings.
No, directors can be foreigners, and residency in Taiwan is not necessary.
The most frequently established business entities in Taiwan include limited companies and branches, offering versatility for various business activities.
A limited company is a separate legal entity, providing limited liability protection to shareholders. In contrast, a branch is an extension of its parent company, and both the parent company and the branch representative bear unlimited liability.
Dividends distributed by a limited company to foreign shareholders are subject to a 21% withholding tax. Profits earned by a branch belong to its foreign headquarters and are not subject to withholding tax when transferred.
There is no specific regulation stipulating a minimum capital amount for foreigners establishing a company in Taiwan. However, it is recommended to allocate a minimum of NTD$200,000 in initial capital to cover your Taiwan business’s initial operating expenses.
No, the capital must be registered in New Taiwan Dollar (NTD).
In general, the capital fund can be freely used for business operating purposes and should not be utilized for personal use. However, it is advisable not to transfer funds from the bank immediately after the company is incorporated, as failure to provide supporting documents during an investigation may result in penalties.
Certainly, a foreign individual or corporation can fully own a Taiwan company. However, prior to registering the company, you will need approval from the Investment Commission.
Absolutely. A foreigner can engage in a joint venture with individuals of any nationality, including Taiwanese or other foreigners. However, if the foreign representative requires a work permit, and the foreign ownership in the Taiwan company must be at least one-third.
No, a representative office in Taiwan is not permitted to engage in sales activities or generate revenue within Taiwan.
In Taiwan, business activities are classified into various business codes. You can refer to the list of business codes to determine which one aligns with your intended activities in Taiwan.
No, there is no specific limit to the number of business codes you can select for your Taiwan company. However, it’s advisable to choose the ones that most accurately represent the activities your company intends to engage in Taiwan.
Yes, the business code of your Taiwan business entity can be accessed on the public government website.
Premia TNC has the optimal solutions for all your business needs.
Get in touch today for a FREE consultation.
No hidden costs, no obligations.
Feel free to drop us an email too!
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Premia TNC has the optimal solutions for all your business needs.
Get in touch today for a FREE consultation.
No hidden costs, no obligations.
Feel free to drop us an email too!
[email protected]
