Taiwan Company Incorporation

The pros of opening a company in Taiwan

  • Taiwan is located in the center of Asia-Pacific, which puts it in an advantageous position to make use of global production resources and marketplace. The average flying time from Taipei to the 6 major cities, Hong Kong, Shanghai, Seoul, Tokyo, Singapore, and Sydney, in Western Pacific is merely within 3 hours;
  • Competitive tax rate. Taiwan’s corporate income tax rate is 20%, comparatively lower than Japan, Korea, China. The VAT rate is 5%, which is lower than Japan, Korea, China, and Singapore;
  • It is relatively easy, when compared to other Asian countries, to open a business bank account and transfer funds internationally, if you provide the required documents to the bank;
  • In order to attract foreign professionals, foreigners with expertise can get a work permit easier than many other Asian countries and enjoy the favorable income tax incentives;
  • Taiwan government established the specific-purpose zones that can suit the changing business demands. There are 10 export processing zones, 174 industrial parks, 3 science parks, 2 agricultural technology parks, 4 environmental science, technology parks, and 7 free trade zones;
  • The distribution of industrial clusters in Taiwan can generally be broken down into electronics and technology in the north, precision machinery in central regions, and petrochemicals and heavy industry in the south. It offers an industrial supply chain that can meet client needs, fast responses and quickly provide customized components and products.
  • Taiwan’s intellectual property laws are open and transparent. Not only they meet the basic guidelines established under international treaties, but also undergo revisions in response to business and international intellectual property law developments.
  • Taiwan’s excellent labor force is boosted by its universal education system, which each year adds more than 300,000 new graduates at the junior college and university level or above. According to a recent survey, 51% of the labor force had at least a bachelor degree.

The cons of opening a company in Taiwan

  • Taiwan’s corporate income tax system is global-wide based, which means both offshore and onshore income of a business entity registered in Taiwan will be subject to Taiwan corporate income tax. However, Taiwan business entities can get the foreign tax credit to offset its income tax liability for the income tax paid in foreign countries.

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How to open a company in Taiwan

Selection of business entity

First of all, you’ll need to select a business entity to be incorporated in Taiwan and the summary table is as below for your reference.

Limited Company / Limited company by Shares Branch Representative Office
Minimum Capital

NTD$1

(Note 1)

NTD$1

(Note 1)

NA
Business Scope

Listed in Article of Association

Special license may required

(e.g. travel, logistics)

Listed in Article of Association

Special license may required

(e.g. travel, logistics)

Market research, negotiation and sign contract, etc.

(Cannot have sales)

Minimum Management Requirement

Investor : 1 individual or entity

Director : 1 individual

(Note 2)

Representative : 1 individual Representative : 1 individual
Limited Liability Yes, limited to capital amount NA NA
Audit Requirement Depends on sales / capital / number of employees / industry Depends on sales / capital / number of employees / industry No
Corporate Income Tax 20% 20% NA
Business Tax 5% 5% No
Withholding tax on Dividend / Earning Distribution 21% NA NA

Note 1: There is a local rule request that the capital should be able to cover the initial operating costs and expenses.
Note 2: 1 individual supervisor will be required for a limited company by shares.

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The procedure and required documents to register a company in Taiwan

Limited company and limited company by shares

Name reservation Investment application Open preparatory bank account Capital injection Company registration Tax registration Open official bank account

Name reservation

Foreign investors should firstly select the Chinese name for the company to be incorporated in Taiwan. When filing the application of name reservation, the basic information of the Taiwan company should also be included, e.g. business activities, representative’s name, phone number and address.

Investment application

An foreign investor is required to submit the Investment Application Form and relevant documents to the Investment Commission, MOEA

Open preparatory bank account

A preparatory bank account is needed to be opened in this stage for the capital to be injected. As the Taiwan company has not yet been incorporated in this stage, the nature of the preparatory bank is an individual account under the representative’s name.

Capital injection

The capital should be injected from the investor’s overseas bank account and in foreign currency. If the investor wants to inject the capital from its Taiwan bank account, the explanation about the source of fund should be provided to Investment Commission.

Company registration

If the company being established involves an investment of NTD 500 million or more, the investor should apply to the Department of Commerce, MOEA, for the registration of his/her company. If the investment is less than NTD 500 million, the investor should apply to the local municipality government or the Central Region Office, MOEA (for Taiwan Province, Kinmen, and Matsu), depending on location. If the company being set up is located in an export processing zone, science park or free trade zone, the investor should apply directly to the administrative agency in charge of that zone or park.

Branch registration

Basically, the investor should apply for the branch registration to Central Region Office, MOEA. If the branch being set up is located in an export processing zone, science park or free trade zone, the investor should apply directly to the administrative agency in charge of that zone or park.

Tax registration

The investor must apply to the tax collection authority of the company’s locality to register his/her business in Taiwan.

Open official bank account

Lastly, the investor needs to transfer the preparatory bank account to the official bank account.

Time frame

The total time frame for government processing time will be around 3 months.

Document required - for proposed representative

  • Copy of passport of representative
  • Power of attorney

Document required - for headquarter

  • Certificate of incorporation
  • Articles of association
  • Power of attorney
  • Organization structure
  • Shareholder and director lists of each business entity directly or indirectly holds the Taiwan company (until the ultimate beneficial owner)
  • Copy of passport for individual ultimate beneficial owners who directly or indirectly hold 25% ownership
  • Investment plan (including Taiwan company’s business model and financial plan)

Representative office

Name reservation Investment application Open preparatory bank account Capital injection Company registration Tax registration Open official bank account

Name reservation

Foreign investors should firstly select the Chinese name for the branch to be set up in Taiwan. When filing the application of name reservation, the basic information of the Taiwan branch should be included, e.g. business activities, representative’s name, phone number and address.

Investment application

The foreign investor should first file an application to Central Region Office, MOEA, and obtain its letter of approval.

Open preparatory bank account

A preparatory bank account is needed to be opened in this stage for the capital to be injected. As the Taiwan branch has not yet been set up in this stage, the nature of the preparatory bank is an individual account under the representative’s name.

Capital injection

The capital should be injected from the headquarter’s overseas bank account and in foreign currency. If the investor wants to inject the capital from its Taiwan bank account, the explanation about the source of fund should be provided.

Representative office

Representative office registration Tax registration

Representative office registration

The foreign investor should first file an application to Central Region Office, MOEA, and obtain its letter of approval.

Tax registration

The investor should then apply to the local tax collection authority for a taxpayer code number.

Document required - for proposed representative

  • Copy of passport of representative
  • Power of attorney

Document required - for headquarter

  • Certificate of incorporation
  • Articles of association
  • Power of attorney
  • Investment plan (including Taiwan company’s business model and financial plan)

Do you need to come to Taiwan?

The only reason to come to Taiwan during the incorporation process is that most local banks request the representative to visit the bank in person for bank account opening. Thus, if you want to assign a foreigner as the representative for your Taiwan business entity, the representative will need to come to Taiwan 2 times for the preparatory and official bank account opening.

The Taiwan banks can be categorized into 3 main types, government-owned banks, private-owned banks and foreign-based banks. In order to facilitate the incorporation process, some banks can accept a Power of Attorney (POA) instead of visiting Taiwan in person.

Government-owned local banks

It is very easy to open a bank account in government-owned banks. However, they do not accept the POA for bank account opening and request the representative personally to visit the bank in person;

Private-owned local banks

They provide more flexibility to clients as they are more aggressive to attract customers. However, each bank has its own policy and the relationship is also important;

Foreign-based banks

Foreign-based banks provide the most flexibility for bank account opening to clients. For example, some banks accept POA and some banks will arrange web meetings. However, they usually set certain requirements, e.g. annual sales, capital amount, certain industries. Their target clients are usually large-sized and multinational companies.

Selecting a proper bank to open the bank account during the incorporation process is important. Sometimes, the incorporation might be significantly delayed by miscommunication with the banker. Thus, you should assign a Taiwanese agent or a person who can speak Chinese to support on the bank account opening.

 

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FAQs for Taiwan Incorporation Service

The only reason to come to Taiwan during the incorporation process is that most local banks request the representative to visit the bank in person for bank account opening. Thus, if you want to assign a foreigner as the representative for your Taiwan business entity,  the representative will need to come to Taiwan 2 times for the preparatory and official bank account opening. 

The Taiwan banks can be categorized into 3 main types, government-owned banks, private-owned banks, and foreign-based banks. In order to facilitate the incorporation process, some banks can accept a Power of Attorney (POA) instead of visiting Taiwan in person.

  • Government-owned local banks

It is very easy to open a bank account in government-owned banks. However, they do not accept the POA for bank account opening and request the representative personally to visit the bank in person;

  • Private-owned local banks 

They provide more flexibility to clients as they are more aggressive to attract customers. However, each bank has its own policy and the relationship is also important;

  • Foreign-based banks

Foreign-based banks provide the most flexibility for the bank account opening to clients. For example, some banks accept POA and some banks will arrange web meetings. However, they usually set certain requirements, e.g. annual sales, capital amount, certain industries. Their target clients are usually large-sized and multinational companies.

Selecting a proper bank to open the bank account during the incorporation process is important. Sometimes, the incorporation might be significantly delayed by miscommunication with the banker. Thus, you should assign a Taiwanese agent or a person who can speak Chinese to support the bank account opening.

No, the director can be a foreigner, and no need to stay in Taiwan.