How to Set Up a Company in Taiwan

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Taiwan combines a highly skilled workforce, world-class technology supply chains and a transparent legal system. Foreign investors are welcome in most sectors, but the process has a specific feature: investment approval usually comes before the company is registered.

1. Choose the vehicle

• Company limited by shares or limited company: separate legal entities, the usual choice for a subsidiary.
• Branch office: an extension of the foreign company, which remains liable for its obligations.
• Representative office: for liaison and market research only; it cannot trade.

2. Main steps

1. Name and business scope: reserve a Chinese company name and define the business activities using the official codes.
2. Foreign investment approval: apply to the Ministry of Economic Affairs’ investment review authority. Investors from certain jurisdictions, including mainland China, follow separate and stricter rules.
3. Bank account and capital: open a preparatory account, remit the capital from abroad and obtain approval of the capital contribution.
4. Capital verification: a Taiwanese certified public accountant verifies the capital.
5. Company registration: file with the competent registration authority, then register for tax.

With complete documents, the process often takes one to two months. Corporate documents from abroad must be legalised or authenticated and translated into Chinese.

3. Points to watch

• Capital: there is no general minimum, but if the company will sponsor a work permit for a foreign manager, the authorities usually expect a higher paid-up capital. Plan the amount with this in mind.
• Restricted sectors: check the negative list for foreign investment before planning the structure.
• Repatriation: approved foreign investment allows profits and capital to be repatriated, so keep the approval documents in order.
• Tax: the standard corporate income tax rate is 20%, with additional tax on undistributed earnings and withholding tax on dividends to foreign shareholders, which treaties may reduce.

4. After incorporation

The company must keep accounts, issue government uniform invoices, file VAT (business tax) returns, file annual corporate tax returns, register employees for labour and health insurance, and report changes to its directors or capital.

The views expressed are personal and do not necessarily represent the position of NET CRAMAN. This article is for general information only and does not constitute legal or tax advice. Rules change over time; seek specific advice before acting.