The Primary Reasons Behind Starting a Business in Taiwan
Taiwan has emerged as a top business destination in Southeast Asia, with a 90% confidence rating in a 2021 survey. This high approval is due to its educated workforce, strategic location, strong legal environment, excellent infrastructure, and vibrant IT sector. Proximity to major Asian economies like Japan, Vietnam, and Hong Kong further enhances its appeal, along with clean, affordable, and welcoming cities. The Taiwanese government also offers incentives for businesses in specific industries, attracting both local and international startups.
For foreign investors, understanding the local market and seeking professional advice can facilitate a smoother entry into Taiwan’s business landscape. Despite the inherent challenges of any new market, Taiwan’s favorable conditions and government support make it a promising and manageable environment for starting a business.
Factors to Consider Prior to Starting a Business in Taiwan
Starting a business in Taiwan offers numerous opportunities, but it is essential to consider several key factors to ensure a smooth and successful launch. From understanding local regulations to navigating the business culture, careful planning is crucial.
Looking into the business environment
Taiwan plays a crucial role in the global economy as a leading player in the information and communications technology sector and a major goods supplier. In 2022, it ranked 17th in both merchandise export and import volume and was one of the top foreign exchange reserve holders. Its GDP per capita placed it near Poland and Switzerland in nominal GDP and comparable to the Bahamas and South Korea in purchasing power parity.
Permit and visa requirements
A limited liability corporation in Taiwan can be established with both overseas shareholders and directors. However, this is contingent upon the scope and nature of your planned operations. It is essential to ensure that your newly established corporation complies with the regulations stipulated by the Taiwan Company Registry. Proper adherence to these regulations will facilitate a smooth set-up and operation of your business entity in Taiwan.
Variations in business entities
When choosing the right type of company to start, foreigners typically have three options in Taiwan: Limited Company, Limited Company by Shares, and Taiwan Branch. These entities are straightforward to set up and can engage in a wide range of business activities. This structure simplifies decision-making and administration. Conversely, if there is only one founding shareholder, the choice is limited to setting up a Limited Company under the Company Act, as this is the only option available for a sole founder.
Keeping a track of accounting vouchers and business ledgers
Business ledgers, excluding those related to unfinished accounting matters, should be retained for a minimum of 10 years following the completion of the fiscal year’s final accounting procedures. Accounting vouchers obtained from others or copies given to others, unless permanently required or related to unfinished matters, should be kept for at least 5 years after the fiscal year’s final accounting. For tax receipts, a 5-year retention period is recommended, aligning with the tax collection period to mitigate future audit disputes.
After the tax authority has investigated and approved the annual business income tax settlement declaration, these ledgers and accounting vouchers may be stored electronically, with approval from the tax authority. They can also be microfilmed or otherwise stored according to the specified retention periods, allowing for the destruction of original ledgers and vouchers.
The Basic Process of Starting a Business in Taiwan
In Taiwan, most banks require the company representative to be physically present for the bank account opening process. Only a few foreign-based banks accept a Power of Attorney (POA) for opening business accounts, and these may have specific conditions or requirements.
To register a Taiwanese company, first select a unique name with the help of your agency and pay the necessary fees. Required documents include your passport, proof of residence, and business information. Foreign businesses must obtain approval from the Ministry of Economic Affairs Investment Commission (MOEAIC). The Taiwan Company Act allows for Subsidiaries, Sole Proprietorships, Partnerships, Foreign Branches, and Representative Offices.
After obtaining approval, submit documentation such as the Application Form, approval letters, Articles of Incorporation, and minutes from key meetings within 15 days. Register with the State Tax Bureau to obtain a Tax Code, ideally with the director appearing in person. The entire process takes about three months. If employing staff, consider managing payroll internally or through a Global Employment Organization.
The Upsides of Outsourcing the Company Registration Process
Outsourcing the company registration process in Taiwan offers several advantages, including access to expert knowledge and streamlined procedures, which ensure compliance with local regulations and reduce the risk of errors. This approach saves time and allows applicants to focus on their core business while also providing cost efficiency compared to managing the process in-house. Overall, it helps navigate the complexities of local requirements more effectively and expedites the registration process.
What Opting for Premia TNC Gets You
At Premia TNC, we are your premier partner for seamless company incorporation services in Taiwan. As the leading experts in the field, we streamline every step of the process, from initial registration to compliance with local regulations, ensuring your business is up and running efficiently. Our dedicated team offers tailored solutions to meet your specific needs, making company formation straightforward and stress-free. Trust us to handle the complexities so you can focus on what matters most, which is growing your business.
