Whether you moved to Taiwan for a project or to experience something new with your relatives or friends, you may decide that you want to launch a business there, and as such would require information on how to register a company in Taiwan.
Starting a business in Taiwan will be profitable and enjoyable for expats for a number of reasons, including the fact that expats can own 100% of their business.
Taiwan also boasts a low cost of living, allowing you to concentrate on earning money rather than paying rent.
Even if the benefits are considerable, you first need to discover how to launch your company in Taiwan to start enjoying them.
You might not even need to travel to Taiwan to begin operations if you want to start a business there.
It is now feasible to establish your corporate entity without being present thanks to recent reforms.
In general, hiring an agency or local representative in Taiwan to manage the process on your behalf is a good option.
Steps To Create A Limited Company In Taiwan
What type of business structure you intend to use—limited company, branch, representative office, etc.—determines the precise actions necessary in establishing a company in Taiwan. The limited company and branch are the most typical types of business.
1. Request a Company Name Search and Reservation
The business must complete this step to reserve its company name. Applications for reservations can be submitted by businesses either online or by mailing them to their offices. The company name must be in Chinese.
2. Request Approval For Foreign Investment
Your business must submit the necessary paperwork to MOEA after having the company name approved in order to be recognized and registered as a Taiwan company or branch. For the case of setting up a company, a business plan must be included to explain the business activities, financial forecasting and source of funds. The processing time will normally be from 2 weeks to 1 month depending on the judgemental opinion of the government officer and the additional documents or explanations will be needed to provide if required.
3. Preparatory Bank Account Opening and Capital Injection
The 3rd step is to find a local bank to open a preparatory bank account and inject the capital for your Taiwan company or branch. Before you choosing the bank for account opening, you should consider below questions:
- What is the requirement of the bank for account opening? (e.g. local director, company location, capital amount, minimum deposit)
- Does the bank have an English e-banking system?
- What is the transaction charge fee?
The processing time of preparatory bank account opening is from 1 day to 1 month depending on the type of bank you choose (multinational banks usually will take longer time, e.g. Citi, HSBC).
The capital must be injected from the shareholder’s oversea bank account and the currency must be in foreign currency, e.g. USD, EUR (NTD is not allowed). The capital injection then must be examined by a local certified public accountant (CPA) before submitting to MOEA. The capital injection and CPA audit will take around 1 to 2 weeks.
4. Request A Business Registration
Once you complete the capital injection, the next step is to file for business registration to the Department of Commerce, MOEA. The processing time will take around 2 weeks. After you get the approval from MOEA, your Taiwan company or branch is officially set up. The company/branch registration form will be also attached with the approval letter in which you can find the GUI number and the relevant registration information on it.
5. Tax Registration
The 5th step is to file for the tax registration. The processing time will take around 2 to 3 weeks and then you will get an approval letter with a notification for the tax interview. For the tax interview, you make the appointment with the tax officer and prepare the below documents:
- GUI chop
- Copy of approval letter for company registration and registration form
- Copy of office rental agreement and house tax receipt
- Company chops
The interview will take around 20 mins and the company’s representative should attend it in person. A power of attorney might be accepted depending on the internal policy of the tax office if the representative is not available to attend it.
6. Transfer to Official Bank Account
The last step is to transfer the preparatory bank account into the official account. You need to prepare all the registration documents to the bank in order to input the details of the company bank account. The additional documents will be required for know-your-customer and anti-money laundering process as below:
- Shareholder structure
- Director and shareholder list of the direct and indirect holding entities
- Copy of passport of ultimate beneficial owners
Once the official bank account is established, you can start to use the capital funds for the business operation. Last but not least, it is also suggested to install the e-banking software when you visit the bank so you can do the online transaction via the internet afterwards.
Does Taiwan Permit Foreign Investors?
The Taiwanese government actively promotes international companies. In reality, owing to Taiwan’s openness to foreigners and commerce, many organizations (particularly tech firms) decide to domicile their Asian operations there.
A Taiwan company can be 100% owned by foreign investors. There is no difference in the rights and obligations between foreign and local shareholders. The director is not required to stay in Taiwan, thus can run the business in Taiwan all over the world.
Do Banks Accept to Open Account Remotely?
There are few banks who accept to open the bank account remotely and most of them are multinational banks. It is suggested to know the requirements of those banks and do a pre-screen check by the banker. Each bank has its own customer preference and internal policy so it is very helpful to have an experienced agent to support it for you!
Conclusion
In Summary, for businesses wishing to grow their presence and benefit from what Taiwan has to offer, it is a desirable alternative. Setting up a business may be a reasonably easy and seamless procedure if the proper steps are taken and the documentation is fully completed on time. Depending on the entity you select, the full procedure could be finished in as little as 11 weeks.
Make sure you hire professionals to ensure that everything is done correctly and that all paperwork is filled out. You may establish a global presence with the appropriate assistance.
FAQs
Q1: Can a foreign shareholder hold 100% of a Taiwan company?
A: Yes, a foreign individual or corporate can hold 100% of a Taiwan company. An approval from Investment Commission will be required before you submit the company registration.
Q2: Can a foreigner do the joint venture with a Taiwanese or other foreigner?
A: Yes, a foreigner can do the joint venture with 1 or more persons of any nationality. If the representative with foreign nationality need to apply for the work permit, the foreign ownership must be above 1/3 of the Taiwan company.
Q3: What language should be used when deciding the Taiwan company name?
A: The official language in Taiwan is Chinese Mandarin, thus the Taiwan company name must be registered in traditional Chinese. If you expect the company will make international transactions, you may additionally register a English name for your Taiwan company.
Q4: What is the regulation I should refer to when deciding the company name?
A: You can refer to Regulations Governing Review of Applications for Reservation of Corporate Names and Business Scopes.
Q5: How long will be valid once I made the company name reservation?
A: The reservation will be valid for 6 months. It can be extended once for one month but the extension should be filed prior to the expiration.
Q6: What is the most common types of business entity in Taiwan?
A: The most common types of business entity in Taiwan are limited company and branch. They are easy to set up and can do most types of business activities.
Q7: What distinguishes a limited business from a branch from a legal perspective?
A: A limited company is a legal entity separated from its shareholder. The shareholder is responsible on the capital amount invested and can enjoy the limited liability protection.
However, a branch is not a legal entity and is an extension of its headquarter. The headquarter and the branch representative bear the unlimited liability of the branch.
Q8: What distinguishes a limited business from a branch from a tax perspective?
A: The dividend distributed by a limited company to its shareholder with foreign nationality will be subject to 21% withholding tax.
However, the profit earned by a branch is owned by its foreign headquarter, thus, there is no withholding tax if the branch transfer the profit to its headquarter.
Q9: Can all the types of Taiwan business entities do the sales activities in Taiwan?
A: No, if you set up a representative office in Taiwan, the representative office cannot do the sales activities or generate revenue in Taiwan.
Q10: How many business codes can I select for my Taiwan company?
A: There is no limitation on the number of business code. However, we would suggest you to choose the most likely you will do in Taiwan.
Q11: Will my Taiwan business entity’s business code be shown in public website?
A: Yes, the business code can be found in the public government website.
Q12: Is there any capital requirement for a foreigner to set up a company in Taiwan?
A: There is no regulation request the minimum capital amount for a foreigner who want to set up a company in Taiwan.
However, there is a local rule mention that the capital of a newly set up company should be able to cover the initial operating cost of your Taiwan business.
Thus, we would suggest you to set up at least NTD$200,000 as your Taiwan company’s initial capital amount.
Q13: Can register the capital in foreign currency?
A: No, the capital must be registered in New Taiwan Dollar.
Q14: Is there any limitation on the use of capital?
A: Basically, the capital fund can be freely used if it is for the business operating purpose, not personal use.
It is not recommended to transfer the fund from the bank immediately after the company is incorporated. It will be subject to penalty if you cannot provide the supporting documents when an investigation is proceeded.
