4 Key Considerations Prior to Setting up a business in Taiwan

Factors influencing a startup in Taiwan

Culture

Mandarin Chinese stands as the predominant language in Taiwan, alongside Hokkien or Taiwanese, Hakkaand approximately a dozen native dialects. English is prevalent, primarily in larger urban areas and among the younger population. The business culture present in Taiwan is a mix of Japanese and mainland Chinese customs significantly influenced by Confucian principles.

Values such as a strong social network, respect, teamwork and loyalty carry considerable significance. Consequently, many Taiwanese companies are organized hierarchically. In business interactions, individuals typically greet each other with a handshake and exchange business cards. Given the country’s heavy reliance on exports, business leaders in Taiwan generally understand and adhere to global business etiquette.

It is important for those entering the business scene in Taiwan to note that the country observes 15 or fewer annual public holidays. Some follow the Gregorian calendar, while others are based on the lunar schedule. Overall, the Taiwanese business approach is characterized by a tranquil and considerate demeanor.

Business visa requirements

For a visitor visa with a business purpose, entry permits are obtainable upon submission of the following documents:

• A valid passport with a minimum validity of six months and containing at least two blank pages
• A completed online application form with a printed barcode
• Two recent color photographs (2×2 size) taken within the last six months, without eyeglasses
• A copy of the green card or a valid return visa to the United States, confirmed by a lawyer (both sides in color)
• A copy of the traveler’s most recent bank statement
• A business letter on company letterhead, specifying the purpose and duration of the trip and assuring that all expenses in Taiwan will be covered by the company
• An invitation letter from the hosting Taiwanese company, on official letterhead and bearing the company seal, providing the applicant’s full name, passport number, and date of birth, duly signed by the inviting contact in Taiwan
• An onward or return ticket, or an unconfirmed itinerary with hotel bookings displaying the applicant’s name, entry and exit dates, and flight information
• If applicable, a signed authorization letter allowing a representative to submit or collect documents and passports from the Taiwan embassy

Options

Foreign individuals or companies intending to initiate a business in Taiwan should anticipate that the establishment process necessitates review and approval by the Investment Commission of the Ministry of Economic Affairs. This process typically spans several months, possibly extending up to half a year. Consequently, many foreign entities commencing operations in Taiwan engage a local broker or agent to facilitate initial entry into the commercial landscape.

In cases where setting up a locally incorporated firm is not the chosen route, establishing a branch or representative office is often more suitable, especially for larger markets or offshore entities aiming to establish a solid market presence. Notably, Taiwan’s investment scheme permits foreign entities to invest in most business sectors except those reserved exclusively for local investors.

Prior to commencing operations in Taiwan, International investors are required to determine the type of business entity permitted under the Company Act of Taiwan. The authorized types of entities include subsidiaries, foreign branches and representative offices. Consequently, the selection of the preferred business entity is dependent on the nature of the intended business in Taiwan.

Employment considerations

If the company is planning to hire employees in the country, foreign investors are required to decide whether to oversee the hiring process internally or to engage service providers for this specific task. These aforementioned service providers may also encompass additional responsibilities, such as managing payroll and other business obligations in Taiwan. Moreover, you could expect there to be a requirement to enlist professionals to aid in the incorporation process and manage accounting and taxation obligations.