Strategically located in the middle of Asia, Taiwan is an ideal place for setting up offshore companies due to its pro-business policies, skilled labour force, strong legal system, and stable political landscape. While registering a company in a new jurisdiction may seem like a daunting task, it is relatively easy to register company in Taiwan. The entire process to open company in Taiwan be done remotely as long as you follow our guide to setting up company in Taiwan.
5 steps to open company in Taiwan
Step 1: Choosing an optimum business entity
Step 3: Open a corporate bank account
Step 4: Register Taiwan business with the Ministry of Economic Affairs
[ps2id id=’step1′ target=”/]Step 1: Choose an optimum business entity
The first step to setting up any business is to choose the business entity you wish to incorporate. The choice of business entity will depend heavily on your company structure, business activity, and long-term goals. The business entities available in Taiwan are as follows:
a) Limited Liability Company
- A limited liability company is a private company limited by shares. Since a limited liability company is regarded as a separate legal entity, shareholders and owners will not be held liable for any debt and obligations incurred by the company. They will only be held liable for the paid-up capital they hold in the company. In Taiwan, at least 1 director and 1 shareholder are needed to set up a limited liability company. There are no restrictions to the nationality or residence of the director and shareholder in the company.
b) Limited Partnership
- A limited partnership is formed when two or more co-owners decide to run a business together. An individual in a limited partnership can choose to be either a general partner or a limited partner. A general partner is in charge of administering the company and has unlimited liability. This means that the general partner will be held liable for all the debts and obligations incurred by the business. On the other hand, a limited partner is not involved in the company’s operations and has limited liability. This means that the limited partner will only be held liable for the amount of investment they hold in the partnership. The general partner must be a Taiwanese resident.
c) Free Trade Zone Company
- Currently, there are 7 Free Trade Zones in Taiwan. Typically, Free Zones are designed to provide a conducive environment for business activities in specific industries and encourage new companies to incorporate them in the area. The Free Zones in Taiwan offer numerous advantages for newly incorporated companies, including tax benefits, strong supporting infrastructure, and other monetary incentives and grants. A Free Trade Zone company requires at least 1 director and 1 shareholder to set up. There is no nationality or residence requirement for the director. However, a Free Trade Zone company must have a physical office in Taiwan. A Free Trade Zone company is an attractive option for starting business in Taiwan as a foreigner.
d) Branch Office
- A branch office is a business structure that acts as an extension of the parent company. Foreign companies that incorporate outside of Taiwan can choose to set up a branch office in Taiwan. The branch office will not be regarded as a separate legal entity. This means that the parent company will be held liable for any debt and liability incurred by the branch office. However, a branch office is treated as a separate tax entity and will file an annual tax return on the income earned from Taiwan. In Taiwan, it is necessary to employ a resident manager to run the Taiwan branch.
e) Representative Office
- Foreign companies incorporated outside of Taiwan can also choose to set up a representative office in Taiwan. However, unlike a branch office, a representative office is not allowed to conduct any business activity that generates revenue. Typically, foreign investors will choose to set up a representative office to conduct market research and promote the parent company’s presence in Taiwan. Similar to a branch office, a resident manager is required to run a Taiwan representative office.
[ps2id id=’step2′ target=”/]Step 2: Reserve company name
Once you have selected the optimal business entity, you can start to search for the availability of your company name. This can be done through the Taiwan One-stop Service Request portal. Through the portal, you will register for pre-inspection of your company’s name. The name of the company can be reserved for up to 6 months. In Taiwan, every business must have a Chinese trade name. If you wish to have an additional English name, you can also apply for it through the One-stop Service Request portal.
[ps2id id=’step3′ target=”/]Step 3: Open a corporate bank account
After receiving approval for your company name, you can proceed to open a corporate bank account. Although there are no capital requirements to set up a business in Taiwan, you will have to procure a capital verification report to verify that you have sufficient capital in the bank account to cover the cost of company formation. As such, you must open a corporate bank account and deposit the required capital into the bank before registering your company. The capital verification report must be certified by a licensed Taiwan accountant.
[ps2id id=’step4′ target=”/]Step 4: Register Taiwan business with the Ministry of Economic Affairs
Once your bank account has been successfully opened, you can start to prepare the documents required for a foreign director for incorporation of the company. This includes the application form, notarized passport copy, and proof of address of individual directors and shareholders. In the case that you wish to appoint a corporate shareholder, you will have to prepare the Certificate of Incorporation, Memorandum & Articles of Association, Minutes of the Board of Directors’ meeting, power of attorney to appoint a representative of the corporate shareholders, personal information of the directors, and other relevant documents.
In addition, you will be required to prepare the business plan, Memorandum & Articles of Association, and other corporate documents for your new company. Once you have prepared all the necessary documents, you can register your company through the business industry portal managed by the Taiwan Department of Commerce.
[ps2id id=’step5′ target=”/]Step 5: Tax Registration
Upon successful incorporation of your company, you can apply for a company Tax Code with the State Tax Bureau. All resident companies in Taiwan are subjected to an annual corporate tax rate of 20%, regardless of the location, the income is derived. Companies must also register for VAT if their annual revenue exceeds the threshold of TWD 480,000.
In addition, all corporations are required to submit audited annual reports to the Financial Supervisory Commission (FSC) if they are publicly listed or have a registered capital exceeding TWD 30,000,000.
Looking to open a company in Taiwan?
Although Taiwan business registration may seem like a simple process that can be completed online, it is not easy to prepare the incorporation documents required to register a Taiwan company, due to the legal expertise and knowledge required. Furthermore, opening a corporate bank account in Taiwan can be a tedious process due to the stringent residence requirement by local banks.
Tetra Consultants provide you with a fast and easy way to register a company in Taiwan through our service package which includes registration of your company in Taiwan with the Ministry of Economic Affairs, provision of a local company secretary and a registered address, opening of a corporate bank account, tax registration and annual accounting and tax services. Tetra Consultants will also recommend the type of business entity suitable for your company, based on your long-term goals and business model.
Contact us now to find out more about the comprehensive range of services we offer to incorporate your business in Taiwan, and our team of experts will revert within the next 24 hours.