Your Handbook to Doing Business in Taiwan

Embarking on the establishment of a company and navigating the realm of business operations in Taiwan might understandably stir up uncertainties for those venturing into entrepreneurship for the first time. However, armed with the right knowledge and a supportive network, these uncertainties need not be cause for undue concern. In the following article, we have assembled a collection of ten essential insights that lie at the heart of initiating a business venture. A solid foundation sets the stage for a promising journey ahead. So, without delay, let us jump right into these key points. 

Initiating a One-Person Startup 

In the context of Taiwan, a common structure for the majority of companies involves their setup as limited companies. These entities comprise one or more individuals, including a leader, all of whom take on the role of shareholders. Under legal provisions, investors within such entities are held liable only up to the extent of their invested capital. These entities are formally recognized as limited liability companies, which tend to be a preferred choice among new entrepreneurs. Notably adaptable and familiar, they also allow for potential shifts to companies with shares in the future, should that be desired. It is important to note, however, that a company organized with shares cannot be converted into a limited company. 

Crafting Your Business Blueprint: Choosing the Right Business Activities 

• In the process of selecting suitable business activities, it is advisable to prioritize those that are compatible with your prevailing primary income source, thereby circumventing irrelevant alternatives. Furthermore, it is necessary for you to consider that particular business endeavors may mandate the attainment of specific approvals, as exemplified by the cases of travel agencies or forwarding services. 

• In such cases, it is essential to seek permission from the relevant competent authority before initiating the company. This ensures compliance and sets a solid foundation for your business journey. 

Partnering for Success: Finding Initial Capital for Your Company  

• In previous years, the requirements for capital amounts were inflexible, leading to cases where funders would initially pay the capital on behalf of others and then withdraw it. However, recent years have witnessed a gradual easing of these capital thresholds, coupled with an increased emphasis on rigorous spot checks, which has significantly reduced such occurrences. 

• There is no minimum capital amount requirement, however, the initial capital amount should be able to cover the initial operating costs and expenses for the Taiwan company. 
• If your Taiwanese company is subject to a special license, the capital might need to meet a certain amount specified in the related regulations.  
• If your Taiwanese company needs to hire foreigners in the initial stage, the capital might also need to meet a certain amount. 

Navigating Tax and Invoices: Insights for Companies 

In compliance with proper record-keeping practices, it is mandatory for the companies to apply for general uniform invoices. These invoices hold paramount importance, especially for larger-scale enterprises, as they serve as vital transaction certificates. Amid the evolving business landscape, there is a growing trend of entrepreneurs opting for electronic invoices. This modern approach to invoicing is gaining traction, aligning with the digital transformation of businesses.  

Financial Landscape After Startup: Navigating Company Taxes 

• Regular tax declaration is necessary, yet it does not equate to immediate tax payment. The obligation to pay taxes hinges on the declaration’s specifics. 
• The value-added tax necessitates bimonthly returns. According to the type of income, it is divided into taxable goods with a tax rate of 5% and exporting products and services with a zero-tax rate. Annually in May, profit-seeking enterprises declare income tax (20% rate).  
• Likewise, every May involves reporting an undistributed surplus, with a 5% addition if not distributed. 
• If your Taiwan company is acting as the withholding tax agent, you also need to comply with the withholding tax payment on a monthly or ad hoc basis, depending on the nature of the income and the payee’s tax resident status. 

Caring for Your Workforce: Labor and Health Insurance 

• For companies with fewer than five employees, employee labor insurance is not mandatory, yet labor retirement and health insurance remain obligatory, with penalties for non-compliance. 
• If the company’s representative joins the labor and health insurance through the company, their insurance fee level should not be lower than that of employees.  

Budgeting for Success: Monthly Billing Fees for Business Startups  

• Variability exists in fees due to the diverse goods or services offered by the company. The firm acts as a liaison between the company and the tax authority, charging fees tailored to company requirements. 
• Basic fees for industries and customer usage durations such as invoices, declaration methods, and others are adjusted, excluding start-ups. 
• Be sure to explore Registering and Billing at our office for favorable services. 

Transform with Our Assistance 

At Premia TNC, we empower startups with a range of services, focusing on company incorporation, accounting, and tax filing. 

Much like the key steps in setting up a business, we provide a suite of tailored services grounded in facilitating seamless company incorporation, meticulous accounting practices, and accurate tax filing. Our approach aligns with startup strategies, focusing purely on what makes a business tick. 

With our comprehensive business acumen, like understanding the landscape before starting a business in Taiwan, we infuse business strategy into every facet of our services. This enables us to aid in conceptualizing and actualizing company structures that meet your startup’s needs and aspirations, reflecting a comprehensive understanding. 

In a competitive startup environment, much like the need for effective strategies, the choice to partner with us for company incorporation, accounting, and tax filing gains significance. Just as you seek professional advice while starting a business in Taiwan, our expertise ensures that your startup’s foundational aspects are solidly established. Just as a conversation with business experts can shape your startup journey, a conversation with us can help pave the way for your business’s success. 

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