Your Handbook to Doing Business in Taiwan

What should entrepreneurs know before doing business in Taiwan?  

Taiwan is generally startup-friendly, but incorporation is not only a registration exercise. Founders should confirm the right entity type, business scope, foreign investment approval route, realistic capital level, tax registration, invoice system, and employer obligations before trading or hiring. Getting these items right early helps avoid delays, penalties, and costly restructuring. 

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 Taiwan, many startups are incorporated as limited companies. Under the Company Act, a limited company may be organized by one or more shareholders, and each shareholder is liable for the company only up to the amount of capital contributed. This makes the limited company a familiar option for small and closely held businesses. The Company Act also provides a route for a limited company to change its organization into a company limited by shares, subject to the required shareholder approval and registration procedures.  

Crafting Your Business Blueprint: Choosing the Right Business Activities 

• In the process of selecting suitable business activities, it is advisable to prioritize activities that match your intended revenue model and actual operations. Taiwan company registrations use business category codes, and a company may generally conduct businesses that are not prohibited or restricted by law. However, businesses requiring special approval must be stated clearly and approved before registration or operation, as applicable.

• Examples of regulated activities may include travel agency services, freight forwarding, financial services, medical-related services, education, and other activities subject to a competent authority. In such cases, it is essential to seek approval from the relevant authority before initiating the company or before commencing the regulated business, depending on the applicable rules. 

Foreign Investment and Registration Sequence  

Foreign founders should plan the incorporation sequence carefully. For a Taiwan company established by a foreign investor, the usual route is Chinese company-name and business-scope pre-check, foreign investment approval from the Department of Investment Review under the Ministry of Economic Affairs or the relevant park authority, capital remittance and investment amount approval, company registration, tax registration, and any required import/export, factory, or special-permit registration. Taiwan’s one-stop service may combine company name pre-inspection, company setup registration, tax registration, labor and health insurance unit setup, and work-rule filing, but foreign investment approval and sector permits still need to be checked separately. 

Partnering for Success: Finding Initial Capital for Your Company  

• Taiwan has cancelled the general minimum investment limit for company registration. However, registered capital still needs to be realistic, examined and certified by a local CPA, and sufficient to cover incorporation and expected initial operating costs. 

• There is no general 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 Taiwan company is subject to a special license, the capital may need to meet a specific amount set out in the relevant regulations.  
• If your Taiwan company needs to hire foreign professionals at an early stage, work-permit-related capital, revenue, qualification, and salary criteria may also apply. For example, the Workforce Development Agency’s category for an overseas Chinese or foreign investment officer refers to paid-up or working capital of at least NTD$500,000 for certain companies established for less than one year, or revenue/import-export/commission thresholds depending on the employer’s profile.

Navigating Tax and Invoices: Insights for Companies 

In compliance with proper record-keeping and business tax requirements, a Taiwan business entity that sells goods or services generally needs to issue uniform invoices unless it falls under a specific exemption, assessment, or small-scale treatment. A business entity approved for taxation registration may apply to use electronic invoices, and must use approved electronic invoice letter-track numbers obtained through the competent tax authority and the Ministry of Finance e-invoice platform. 

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 depends on the filing result, taxable income, input tax credits, withholding obligations, and other facts.
• Business tax returns are generally filed every two months. A business entity must report sales, tax payable, or overpaid business tax within 15 days from the beginning of the next tax period, even if there are no sales. Taiwan’s standard VAT rate is 5%, and export sales or qualifying export-related services may be zero-rated where statutory conditions are met. 
• Profit-seeking enterprise income tax is generally filed annually. Taiwan’s standard profit-seeking enterprise income tax rate is 20% for taxable income above NTD$120,000, subject to the applicable calculation rules. 
• Likewise, undistributed earnings are subject to an additional 5% profit-seeking enterprise income tax under the current Ministry of Finance guidance for earnings from 2018 onward.
• If your Taiwan company acts as the withholding tax agent, it must comply with withholding, payment, and reporting obligations according to the nature of the income and the tax residence status of the payee.

Caring for Your Workforce: Labor and Health Insurance 

• For companies with fewer than five employees , labor insurance is not compulsory, although voluntary enrollment is available. However, once a registered company or firm hires at least one employee, it is a compulsory insured unit for employment insurance and labor occupational accident insurance. If the company does not voluntarily enroll employees in labor insurance, it should still complete the required employment insurance and occupational accident insurance filings. 
• Employers must also consider National Health Insurance enrollment for eligible employees. Foreign professionals legally employed in Taiwan with work permits and Alien Resident Certificates generally enroll in NHI through the company from the date of employment. 
• Employers are generally required to contribute at least 6% of a worker’s monthly wages to the worker’s individual labor pension account where the Labor Pension Act applies. From January 1, 2026, newly hired foreign professionals and foreign specialist professionals can directly apply to the new labor pension system from their employment date without first obtaining permanent residence. 
• If the company’s representative, responsible person, or business owner joins labor, occupational accident, pension, or health insurance through the company, the correct status and insured salary grade should be assessed based on the applicable BLI and NHI rules rather than assumed to be the same as ordinary employees.

Budgeting for Success: Monthly Billing Fees for Business Startups  

• Fees vary depending on the goods or services offered by the company, the number of transactions, use of paper or electronic invoices, filing method, payroll headcount, and whether special licenses or foreign investment filings are involved. 
• Professional firms often act as 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 other compliance needs, may be adjusted according to the company’s scope and activity level.
• Be sure to explore Registering and Billing support 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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