Taiwan Company Formation
Taiwan is a popular jurisdiction for company formation, especially for non-residents, due to its stable economy, strategic location in Asia, and relatively straightforward incorporation process. It offers access to skilled labor and a robust manufacturing sector.
- Time of Indonesia company formation takes:4-8 weeks).
- Popular company type:
- Limited Liability Company (LLC)
Taiwan Company Formation Main Characteristics and the basic rules of Company registration in Taiwan
Thinking of expanding your business to Asia? Taiwan offers a vibrant economy, a skilled workforce, and a strategic location. Forming a company in Taiwan can unlock significant opportunities for non-residents. This guide provides an overview of the process, benefits, and requirements to help you navigate Taiwan company formation successfully.
A Comprehensive Guide for Non-Residents to Register a Company in Taiwan
Why Choose Taiwan for Your Business? Benefits for Non-Residents
Taiwan presents a compelling case for foreign investment, offering several key advantages:
- Strategic Location: Positioned at the heart of Asia-Pacific, Taiwan provides easy access to major markets like China, Japan, and Southeast Asia.
- Strong Economy: Taiwan boasts a robust and technologically advanced economy, particularly in the electronics, manufacturing, and technology sectors.
- Skilled Workforce: A highly educated and skilled workforce is readily available, offering a competitive advantage for businesses.
- Stable Political Environment: Taiwan enjoys a stable and democratic political system, providing a secure environment for investment.
- Tax Incentives: The Taiwanese government offers various tax incentives to attract foreign investment, particularly in specific industries.
- Intellectual Property Protection: Taiwan has a strong legal framework for protecting intellectual property rights, safeguarding your innovations.
- Relatively Low Operating Costs: Compared to other developed economies in the region, Taiwan offers relatively lower operating costs, including labor and office space.
Types of Companies for Non-Residents in Taiwan
Non-residents can establish several types of companies in Taiwan, each with its own characteristics:
- Limited Company (Limited Liability Company – LLC): This is the most common type of company for foreign investors. It offers limited liability protection, meaning your personal assets are shielded from business debts.
- Branch Office: A branch office is an extension of your existing foreign company. It’s suitable for businesses looking to establish a presence in Taiwan without creating a separate legal entity.
- Representative Office: A representative office is primarily for market research, liaison activities, and promotion. It cannot engage in direct sales or revenue-generating activities.
Advantages of Forming a Limited Company (LLC) in Taiwan
For most non-residents, the Limited Company (LLC) structure offers the most advantages:
- Limited Liability: As mentioned, your personal assets are protected.
- Flexibility: LLCs offer greater flexibility in terms of management and ownership structure compared to other types of companies.
- Tax Benefits: LLCs are eligible for various tax incentives offered by the Taiwanese government.
- Easier Access to Funding: Having a registered company in Taiwan can make it easier to secure local funding and investment.
Requirements for Taiwan Company Formation
The requirements for forming a company in Taiwan typically include:
- Company Name: A unique company name approved by the Ministry of Economic Affairs (MOEA).
- Registered Capital: A minimum registered capital is required, depending on the industry and scope of business.
- Shareholders and Directors: You’ll need to appoint shareholders and directors, who can be non-residents.
- Registered Address: A physical address in Taiwan is required for your company’s registered office.
- Business Scope: A clear definition of your company’s business activities.
- Required Documents: Passport copies, proof of address, and other relevant documents for shareholders and directors.
Procedure for Taiwan Company Formation
The process of forming a company in Taiwan generally involves these steps:
1. Company Name Reservation: Reserve your desired company name with the MOEA.
2. Capital Verification: Deposit the registered capital into a designated bank account and obtain a capital verification report.
3. Company Registration: Submit the required documents to the MOEA for company registration. This includes the articles of incorporation, shareholder information, and director details.
4. Business License Application: Once the company is registered, apply for a business license from the relevant local government.
5. Tax Registration: Register your company with the tax authorities to obtain a tax ID number.
6. Open a Bank Account: Open a corporate bank account in Taiwan.
7. Apply for Work Permits (if applicable): If you or your employees plan to work in Taiwan, you’ll need to apply for work permits.
Timeframe for Taiwan Company Formation
The timeframe for completing the entire company formation process can vary depending on the complexity of your business and the efficiency of the government agencies involved. Generally, it takes approximately 4-8 weeks from start to finish. This includes name reservation, capital verification, company registration, business license application, and tax registration.
Navigating the Process: How Our Professionals Can Help
Forming a company in a foreign country can be complex and time-consuming. Our team of experienced professionals can guide you through every step of the Taiwan company formation process, ensuring a smooth and efficient experience. We offer a comprehensive range of services, including:
- Company Name Search and Reservation: We’ll help you find a unique and compliant company name and reserve it with the MOEA.
- Document Preparation and Filing: We’ll prepare all the necessary documents and file them with the relevant government agencies.
- Capital Verification Assistance: We’ll assist you with the capital verification process, ensuring compliance with regulations.
- Business License Application: We’ll guide you through the business license application process, ensuring you meet all the requirements.
- Tax Registration Support: We’ll help you register your company with the tax authorities and obtain a tax ID number.
- Registered Agent Services: We can provide a registered agent service to receive official correspondence on your company’s behalf.
- Ongoing Compliance Support: We can provide ongoing support to ensure your company remains compliant with Taiwanese regulations.
- Translation Services: We offer professional translation services to facilitate communication with government agencies and other stakeholders.
- Legal and Accounting Advice: We can connect you with experienced legal and accounting professionals in Taiwan.
Conclusion
Taiwan company formation offers a gateway to a thriving Asian market. By understanding the benefits, requirements, and procedures involved, you can successfully establish your business in Taiwan and capitalize on the opportunities it presents. Contact us today to learn more about how our professionals can help you navigate the process and achieve your business goals. We are dedicated to providing you with the expertise and support you need to succeed in Taiwan.
FAQ on Taiwan’s Tax System
1. What is Corporation Tax in Taiwan?
Corporation tax in Taiwan is set at a standard rate of 20% on net taxable income. This tax applies to both domestic and foreign companies operating within Taiwan. Companies can benefit from various tax incentives, such as deductions for research and development expenses, which can help reduce their overall tax burden.
2. How is Income Tax assessed in Taiwan?
Income tax in Taiwan is progressive, with rates ranging from 5% to 40%, depending on income levels. Residents are taxed on their worldwide income, while non-residents are taxed only on income sourced in Taiwan. Deductions and exemptions may apply, such as for dependents and specific expenses.
3. What is the VAT Rate in Taiwan?
Taiwan imposes a Value-Added Tax (VAT) of 5% on most goods and services. Certain essential goods, such as food and medical services, may be exempt or subject to a reduced rate. Businesses are required to register for VAT if their taxable sales exceed NT$480,000 annually.
4. How is Dividends Tax structured in Taiwan?
Dividends distributed by Taiwanese corporations are subject to a withholding tax of 21%. For foreign investors, this rate may be reduced under tax treaties Taiwan has with other countries. It is important for investors to check treaty benefits to ensure compliance and optimization of tax liabilities.
5. Are there any other significant taxes in Taiwan?
In addition to the aforementioned taxes, Taiwan imposes several other taxes, including the property tax, inheritance tax, and gift tax. The inheritance and gift tax rate can reach up to 20%. Local governments may also levy additional taxes, such as the land value tax, based on the property’s assessed value.
FAQ: Company Registration in Taiwan for Non-Residents
What are the benefits of forming a company in Taiwan as a non-resident?
Forming a company in Taiwan as a non-resident offers several advantages. Firstly, Taiwan has a strategic location for businesses targeting the Asian market, serving as a gateway to major markets like China and Southeast Asia. Secondly, the corporate tax rate in Taiwan is relatively low, making it an attractive destination for investment. Additionally, a Taiwanese company can enhance credibility and trust among local clients and partners. Moreover, Taiwan has a well-structured legal system that protects foreign investors, ensuring a secure environment for business operations.
What are the requirements for non-residents to form a company in Taiwan?
Non-residents looking to form a company in Taiwan must meet specific requirements. You will need to provide a valid passport and any necessary identification. Additionally, it’s essential to have a registered office address in Taiwan, which can often be facilitated through local service providers. Depending on the type of business, you may also need to apply for various permits or licenses. Working with a local legal expert can streamline the process and ensure compliance with Taiwan’s regulations.
How long does it take to register a company in Taiwan for non-residents?
The process of registering a company in Taiwan for non-residents typically takes between 2 to 4 weeks. This timeframe can vary based on the complexity of the business structure and the completeness of the submitted documents. Initial registration involves name approval, preparing the company charter, and submitting the registration application to the relevant authorities. After registration, additional licenses may be required, which can extend the overall timeline. It’s advisable to work with a local consultant to expedite the process.
What types of businesses can non-residents set up in Taiwan?
Non-residents can set up various types of businesses in Taiwan, including limited liability companies, branch offices, and representative offices. A limited liability company (LLC) is the most common structure and offers legal protection to its shareholders. On the other hand, a branch office operates as an extension of a foreign company but requires a local representative. A representative office, while not allowed to conduct direct business activities, serves as a liaison for marketing and communication purposes. The choice depends on the specific business goals.
Are there any restrictions on foreign ownership in Taiwanese companies?
In Taiwan, foreign ownership is generally permitted, although there are certain restrictions depending on the sector. For most industries, non-residents can own 100% of a company. However, sectors such as telecommunications, finance, and media may have limitations on foreign investments. It’s essential to check the specific regulations for the intended sector before proceeding. Consulting with local legal experts is recommended to navigate any complexities related to foreign ownership laws.
What taxes should non-resident business owners be aware of in Taiwan?
Non-resident business owners operating in Taiwan need to be aware of several tax obligations. The primary tax is the corporate income tax, which is typically set at 20%. Additionally, businesses should account for value-added tax (VAT) on sales, which is generally around 5%. Depending on the business activities, other taxes may apply, such as withholding tax on dividends paid to foreign entities. It is crucial to maintain proper accounting records and consult with a tax professional familiar with Taiwanese tax law to ensure compliance.
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This publication is provided for information purposes only. This info should not be treated as a substitute for a tax or legal consultation or legislation. You should not act on the basis of the information contained in this publication without having obtained individual advice from the professional expert.
BRIS GROUP does not assume responsibility for any damage resulting from decisions made by the reader on the basis of this publication.
About Taiwan
Capital: Taipei
Region: The eastern part of Taiwan is washed by the Pacific Ocean, while the southern and northern parts are washed by the South China and East China Seas
Currency: Taiwanese dollar (TWD)
Time Zone: GMT+8
Dial Code: +886
Abbreviations: TW
Helping Your Company Thrive in Taiwan With us, starting and running a business in Taiwan will be easy and efficient!
- Full support of the company’s registration in Taiwan: from the preparation of documents to their submission.
- Remote registration: all processes are online, wherever you are.
- Secretary and Treasurer: we can take on these important roles.
- Nominal directors and shareholders: we will ensure the confidentiality of your information.
- Help in opening a bank account: we will simplify this complex process.
- Registration for taxes, VAT and EORI: ensure all requirements are met.
- Website development: we will create a professional online representation for your business.
- Logo creation: we will design a unique and memorable logo for your brand.
- Full administrative support of the company: we will take over routine tasks.
- Mailing address organization: we provide a reliable mailing address for your business.
- Organization of the virtual office: we will ensure the professional image of your company.
- Telephone answering service: we will answer calls on behalf of your company.
- Accounting, audit and reporting: ensure accurate and timely accounting.
- Preparing and filing a VAT declaration: let’s save you the trouble.
- Interaction with local authorities: take over communication with state institutions.
- Trademark registration: protect your brand.
- More Emphasis on Customer Input.
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