Taiwan is a welcoming place for foreigners to set up their company, which can be attributed to Taiwan’s strategic location, favourable government policies and regulations, skilled workforce, and tax incentives. Starting a business in Taiwan as a foreigner may seem daunting to many aspiring entrepreneurs. While the first step to kickstarting your business journey is your Taiwan company registration, we will provide you a guide to setting up a company in Taiwan and highlight important things about Taiwan business registration.
- Visa Applications
- Best Business activities to operate in Taiwan
- Taiwan Free Trade Zones
- Advantages of starting a business in Taiwan
Application for visas may be required if you wish to open a company in Taiwan. Depending on your citizenship, the type of activity you are engaging in, and the length of stay in Taiwan, it is crucial to apply for the appropriate visa to avoid any legal implications.
When is it not necessary to apply for visas?
If you are a foreign investor originating from countries listed under the Taiwan Travel Agreements, you are granted visa-free entry into Taiwan for either 90 days or 30 days. Therefore, foreign investors and business owners who meet the above condition are entitled to a Taiwan work visa waiver upon arrival to Taiwan.
To qualify for the visa-free entry program, foreign visitors will have to present a valid formal passport with a minimum validity of six months and a confirmed return ticket.
In general, the duration of stay cannot be extended unless specified. You can apply for a visa extension at a local office of the Taiwan National Immigration Agency if allowed. Conversely, you can submit a request to the Bureau of Consular Affairs to convert your present visa into an extendable one.
When is it necessary to apply for a visa?
- Staying in Taiwan for more than 90 days
- Not a citizen of countries listed under the Taiwan Travel Agreements
There are two types of visas applicable to foreigners planning for long-term stay in Taiwan – Taiwan Resident Visa and Taiwan Entrepreneur Visa.
For Resident Visa, it is applicable for foreigners who have the intention of working, studying, or joining a family member in Taiwan. Some examples of Resident Visa are the Taiwan Student Visa, Work Visa, and Join Family Visa.
For an Entrepreneur Visa, it is applicable for foreigners who wish to set up a company in Taiwan. Holders of the Entrepreneur Visa can receive an initial 1-year residency in Taiwan with multiple entries. Business owners can also extend their Entrepreneur Visa if their businesses in Taiwan are successful.
Best business activities to operate in Taiwan
Depending on the type of business activity your company is engaging in, it is mandatory to inform the Taiwanese government. Your company must state the business scope(s) at the time of company incorporation and the business scopes chosen must be approved by the Ministry of Economic Affairs (MOEA).
The sectors in Taiwan mainly revolve around the Service, Manufacturing, and Semiconductors industries. In recent years, the Taiwan government has adopted various new technologies including cloud computing, big data, the Internet of Things, and smart robots with the objective of improving the nation’s manufacturing industry.
Taiwan’s manufacturing industry has seen steady growth over the past few years which can be seen by its contribution to the nation’s GDP. In the fiscal year 2019, some of the largest companies in Taiwan based on annual revenue are Hon Hai Precision Industry, Pegatron, and Taiwan Semiconductor Manufacturing. Therefore, Taiwan provides a favourable business environment for setting up businesses in the service, manufacturing, and semiconductors industries.
Moreover, Taiwan is increasingly welcoming towards start-ups that wish to establish their businesses. Efforts such as tax credits, laws that encourage foreign talent, and tracts of land specially reserved for start-ups demonstrate the government’s commitment to improving the start-up environment in Taiwan. This has also led to the establishment of Taiwan’s unique start-up zone dubbed as the Asian Silicon Valley. Moreover, the Ministry of Economic Affairs provides start-ups and SMEs with financial grants to assist with the formulation of their operating models.
Taiwan Free Trade Zones (FTZ)
While Taiwan offers numerous types of business entities for you to choose from, operating as a Free Trade Zone company brings about a plethora of benefits. It is recommended to register as a Free Trade Zone Company if your business engages in activities such as trading, warehousing, or manufacturing.
What are Taiwan Free Trade Zones?
With an objective to attract foreign investors and business owners to Taiwan, FTZs are one of the government’s economic diversification and independence initiatives. The objective of the Taiwan Free Trade Zones is to stimulate and catalyse the growth of companies incorporated in these regions.
Taiwan Free Trade Zones allow for a free flow of goods in a well-established and conducive global trade environment. Therefore, companies set up in Free Trade Zones enjoy a plethora of lucrative tax and regulation benefits. For foreign investors, this includes the exemption from import and export laws and interventions from custom authorities. Moreover, investors can enjoy corporate income tax exemption with no capital restriction.
Presently, there are seven Taiwan Free Trade Zones located in the following locations:
- Port of Kaohsiung
- Port of Taichung
- Taoyuan International Airport
- Port of Taipei
- Port of Anping
- Port of Keelung
- Port of Suao
As each Taiwan Free Trade Zone possesses its own competitive edge, it is crucial to choose a Free Trade Zone that best fits your company’s business goals.
Advantages of choosing Taiwan business registration
As Taiwan boasts a reputation of being an ideal business platform in connecting China and Southeast Asian countries, this has attracted many companies to set up their businesses in Taiwan. This can be attributed to the Taiwan government’s high valuation of foreign direct investments, thereby providing foreign businessmen with a business-friendly environment in Taiwan. Additionally, the Taiwanese government has laid out numerous attractive benefits to facilitate and ease the integration of international investors into the economy.
#1 Strong Political Ties with Major Economies
Taiwan establishes and maintains stable political relationships with various nations and is a member of organisations including the World Trade Organisation (WTO) and Asia-Pacific Economic Cooperation (APEC). Taiwan’s positive diplomatic relationships with the United States of America (USA) have subsequently led to a consistent inflow of foreign trading opportunities from the country. Moreover, Taiwan’s healthy cross-border diplomatic relationships present international business owners with export access to various developed nations.
#2 Skilled Workforce
With a population size of approximately 23.8 million and a labour participation rate of 59.1%, foreign investors and business owners are provided with access to a sizeable labour workforce in Taiwan. With high-tech manufacturing as the dominant industry in Taiwan, companies in the manufacturing industries can source high calibre and capable engineers. Moreover, Taiwan boasts a high literacy rate of 98.5%, which can be attributed to the excellent quality of education and available resources to upskill workers.
#3 Competitive economic environment
With reference to the Global Competitiveness Report published by the World Economic Forum, Taiwan ranked as the 12th most competitive nation out of the 141 countries assessed. Taiwan was one of the four economies to receive a score of more than 80 in innovation capability by the World Economic Forum.
The government levies a relatively lower corporate income tax on companies operating in Taiwan. If properly structured, entities in Taiwan’s Free Trade Zones are granted a corporate income tax exemption by the Taiwan government when requirements are satisfied. Otherwise, a 20% Corporate Income Tax will be applicable which is relatively low in comparison to the Worldwide Average Statutory Corporate Income Tax Rate of approximately 24%, measured across 176 jurisdictions.
Therefore, the competitive economic environment brought about by Taiwanese government policies alleviates the fiscal financial burden on Taiwan business owners.
Looking to begin Taiwan business registration?
The Taiwan business registration process is hassle-free if you are familiar with the incorporation process. Tetra Consultants strives to provide our clients with a seamless experience when setting up a company in Taiwan. Our team of experts will ensure that your Taiwan company can be operationally ready as soon as possible.