Doing business in Taiwan
- How quickly can I set up a business?
- What is the minimum investment needed?
- How can I raise finance?
- What are the legal requirements for setting up my business?
- What structure should I consider?
- What advice can you give me in regards to payroll and taxation requirements?
- Is there anything else that I should know?
How quickly can I set up a business?
10-20 days (For foreign investors: 30-45 days).
What is the minimum investment needed?
No minimum investment capital required.
How can I raise finance?
Investor must contribute the entire capital.
What are the legal requirements for setting up my business?
Offer 100% foreign ownership. There is no equity participation required with the local nationality.
Investment Flow Chart in Taiwan:
1. Investment inquires.
2. Apply for reservation of company name and business scope (1 week).
3. Apply for Foreign Investment Approval (1 week).
4. Remit capital to Taiwan banks (1 week).
5. Capital verification and Approval (1 week).
6. Company registration (2-3 weeks).
What structure should I consider?
Foreign investors could choose to set up a Limited Liability Company or Branch Company in Taiwan. Both involve paying 20% of income tax and 5% of VAT tax.
A. Limited Liability Company:
1. From the legal viewpoint, the company gives a legal ring-fence, offering protection to the top group company.
2. From the tax viewpoint, when the company has earnings and want to wire them abroad, the earning is subjected to a 10%~20% withholding tax.
B. Branch Company:
1. From the legal viewpoint, if something happened to the branch company that the top group would be legally responsible, it potentially puts the group at risk.
2. From the tax viewpoint, when the branch company has earnings and wants to wire them abroad, the earnings are not subjected to withholding tax.
Most of the multinational companies prefer to choose setting up a “Limited Liability Company”, instead of Branch Company.
What advice can you give me in regards to payroll and taxation requirements?
1. Employer’s Liabilities: Labor insurance 8.05% + Health insurance 4.90% + Pension 6.00% = 18.95% (based on salary). No other social security tax or payroll tax except the above.
2. File income tax returns per year (Income tax rate: 20%).
3. File VAT tax returns every 2 months (VAT tax rate: 5%).
Is there anything else that I should know?
Taiwan has a free economy and two major types of business:
Electronics manufacturing, e.g., HP, Epson. The major reason is Taiwan good at electronics hardware production is based on the following reasons:
1. Lower labour cost.
2. Well-educated and hardworking employees.
3. Industrial gathering effect.
Marketing Company, e.g., BP, Levi’s. Cross-border e-commerce.
1. Sell products in Taiwan.
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Kreston firm, Brighture, share their expertise in their latest newsletter covering financial news and updates from China.