Business entities in Taiwan
Foreigners willing to do business in Taiwan usually register a local limited liability company. There are however alternative corporate structures available in Taiwan, including the possibility for foreign companies to register a branch or a representative office. Please find below more information on the different types of corporate structures available to do business in Taiwan.
Doing business in Taiwan through a local entity
The Taiwan limited liability company (limited company)
- The Taiwan limited liability company (LLC) can be registered with only i) one shareholder and ii) one director, who can both be non-resident foreigners. While there is no minimum paid-up capital requirement, Healy Consultants recommends to allocate a minimum of US$3,300 to optimize the probability of timely company registration approval by the Ministry of Economic Affairs;
- Before registration of the company, our Client will be required to open a capital account in Taiwan and thereafter inject the paid-up capital. Unfortunately, banks require foreign directors and signatories to travel, before approving capital account opening;
- Best uses: Setting up an LLC in Taiwan is the best option for most foreign investors due to its flexibility and low administrative requirements. Multinationals favour the LLC when establishing a subsidiary of their foreign company in Taiwan.
The Taiwan limited partnership (LP)
- Foreigners can register limited partnerships in Taiwan, which must however include at least two partners, one of them being a general partner personally liable for any debt or tax due by the partnership and who must be a Taiwanese resident. Limited partnerships in Taiwan are not allowed to hire foreigners;
- The partnership is a tax transparent entity, not subject to corporate income tax but still subject to the preparation and filing of financial statements and requiring all partners to submit a personal income tax return;
- Best uses: foreigners having a local partner can consider to register a limited partnership in Taiwan. In other cases, Healy Consultants recommends to register instead a limited liability company.
The Taiwan free zone company
- Foreigners willing to register export-oriented businesses can register a subsidiary in a special economic zone (SEZ). In addition to requirements applying to a branch, the company will be required to submit a business plan to the SEZ authority;
- While there is no minimum investment officially required, Healy Consultants recommends our Client to allocate a minimum of US$200,000 to the paid up capital of their Taiwanese free zone company. See also this page for additional information on the tax incentives available in the Taiwan free zones;
- Best uses: we usually recommend our Clients to seek free zone registration in Taiwan when they expect to make a significant investment and to export a significant percentage (over 75%) of their products overseas.
Doing business in Taiwan with a foreign entity
The Taiwan branch office
- Foreign companies may establish a branch office in Taiwan to conduct business. Compared to the registration of a subsidiary, this however requires the appointment of a local agent/branch manager. There is no requirement for these appointments if an LLC is set up;
- Best uses: We usually recommend our Client to register a branch when they plan to operate in regulated industries such as financial services, banking and finance. Otherwise, registration of a subsidiary (LLC) is more advisable.
The Taiwan representative office
- A representative office is allowed to conduct only limited, non-commercial activities in Taiwan. Like a branch, such entity is additionally required to appoint a resident as manager;
- Best uses: a representative office can be used by foreign companies to carry out market research, brand marketing activities and research & development, but they may not generate any revenue of their own.
|Operations and logistics||LLC||Limited Partnership||Free zone company||Branch||Representative office|
|Doing business in Taiwan permitted?||Yes||Yes||Yes||Yes||No|
|Allowed to sign contracts with local Clients?||Yes||Yes||Yes||Yes||No|
|Must have a lease agreement signed before registration?||Yes||Yes||Yes||Yes||Yes|
|Allowed to import raw materials?||Yes||Yes||Yes||Yes||No|
|Allowed to export goods?||Yes||Yes||Yes||Yes||No|
|Accounting and tax|
|Corporate tax rate?||17%||0%||Up to 0%||17%||0%|
|Corporate bank account?||HSBC||SCB||HSBC||Citibank||Deutsche Bank|
|Statutory audit always required?||No||No||No||Yes||Yes|
|Annual tax return to be submitted?||Yes||Yes||Yes||Yes||Yes|
|Access to DTAAs?||Yes||No||Yes||Yes||No|
|Paid up capital required?||US$1||US$1||US$1||None||None|
|Paid up capital recommended?||US$3,300||US$3,300||US$200,000||US$3,300||US$3,300|
|Resident director/manager required?||No||No||No||Yes||Yes|
|Resident bank signatory required?||No||No||No||No||No|
|local shareholder required?||No||Yes||No||No||No|
|Minimum number of directors?||1||2||1||1||1|
|Minimum number of shareholders?||1||2||1||Parent company||Parent company|
|Individual shareholders allowed?||Yes||Yes||Yes||No||No|
|Public register of shareholders and directors||Yes||Yes||Yes||Yes||Yes|
|Can the entity hire expatriate staff?||Yes||No||Yes||Yes||Yes|
|How long to get work permit approved?||3 months||N/A||3 months||3 months||3 months|
|Fees and timelines|
|How long to set the entity up?||3 weeks||3 weeks||4 weeks||4 weeks||4 weeks|
|How long to open corporate bank account?||4 weeks||4 weeks||4 weeks||4 weeks||4 weeks|
|Estimate of engagement costs||US$14,040||US$18,390||US$18,390||US$14,040||14,490|