Taiwan offers various options for foreign corporations and multi-national companies to development business operation in Taiwan. Each has unique characteristics and features; investors should weight their pros and cons to choose carefully.
The most common business organizations are the limited companies and branch office. The difference being having a separate legal status in Taiwan or not.
Characteristics for different Taiwan company types
|Limited by Shares||Limited Company||Branch Office||Representative Office|
|Separate Legal Liability||Yes||Yes||Yes||Yes|
|Company Name||Self-determined name||Self-determined name||Same as parent||Same as parent|
|Shareholder||2 natural persons or 1 legal entity||1 natural person or legal entity||N/A||N/A|
|Share Capital||No minimum requirement||No minimum requirement||No minimum requirement||N/A|
|Directorship/ Management||3 nature persons||1 natural person||1 branch manager||N/A|
|Supervisor||1 natural person||N/A||N/A||No|
|Time required||30 Working days||30 Working days||20 Working days||14 Working days|
The difference between the “Branch Office” and “Limited Company” is not only on taxation but also the liabilities and future development of an enterprises. While the branch office can enjoy certain tax benefits, there is a trade-off in between that it cannot acquire other company’s shares nor transfer its ownership to others, etc.
Tax System in Taiwan
All sales of goods and provision of services in Taiwan, as well as all imports of goods into Taiwan, are subject to Business Tax (“BT”). BT is imposed under two systems: the VAT system (5%) and the Non-VAT system (0.1% – 25%). All companies are required to prepare accounts and file for BT every 2 months and make tax payment. Since taxation is quite complex in Taiwan, it is recommended to hire account professionals to complete the process to avoid late payment penalty.
Apart from the BT, the companies are also subjected to 20% of corporate profits tax, filed annually. Also, employer must file salary income for the employees annually and pay labour insurance and national health insurance.
If the company distributes profit or make payment to foreign shareholders, a withholding tax will be charged. For further tax details and requirement, contact our consultants now.
Visa and Residence in Taiwan
Upon fulfilment of certain criteria, the investor can apply for visas and residency in Taiwan after investment into the company. Requirements for Hong Kong and Macau residence and Foreigners are different. Refer to here for more details.