Company incorporation in Taiwan

If you do business in Taiwan there may be a point that it makes sense to set up a local company. Then you need to know how to comply with local regulations and who can help you.

This article describes:

the most likely types of company to set up;
how you do this and who can help you;
a few important fiscal regulations.

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Your legal entity in Taiwan

Taiwan, with its robust economy, highly skilled workforce, and strategic location in East Asia, is an appealing destination for foreign companies looking to establish a presence in Asia. The island offers strong trade relations with China, Japan, and the United States, making it an excellent choice for businesses across various industries.

Most Common Business Forms for Foreign Companies

The most common business structure for foreign companies in Taiwan is the Wholly Foreign-Owned Enterprise (WFOE), which allows 100% foreign ownership of the business.

WFOEs are popular for foreign companies seeking to maintain full control over their operations in Taiwan.
Foreign shareholders benefit from limited liability, meaning personal assets are protected from company debts.
WFOEs are subject to Taiwan’s local laws and regulations, and they must have at least one director (who can be a foreign national) and one shareholder.

An alternative option for foreign businesses is the Joint Venture (JV), where foreign companies partner with Taiwanese firms. JVs can be beneficial for companies seeking to leverage local expertise and market knowledge, particularly in industries like manufacturing and technology.

Setting Up a Company in Taiwan

Incorporating a Wholly Foreign-Owned Enterprise (WFOE) in Taiwan involves several steps:

Choosing a company name and ensuring it complies with Taiwanese naming regulations.
Filing the necessary documents with the Taiwanese Ministry of Economic Affairs (MOEA), including the Articles of Incorporation, company registration, and proof of the business address.
Designating at least one director (foreign or local) and appointing a local agent or representative to act on behalf of the company.
Opening a corporate bank account in Taiwan and depositing the required initial capital.
Registering with the Taiwanese tax authorities to obtain a tax identification number and filing for VAT or business tax if applicable.

Foreign nationals can serve as directors, but it is advisable to have a local representative to handle the legal requirements. The incorporation process can typically be completed within 1-2 months.

Taxation and Withholding Taxes

Corporations in Taiwan are subject to a corporate income tax rate of 20% on profits. This is relatively low compared to other Asian countries and contributes to Taiwan’s competitive business environment.

Regarding dividends:

Dividends paid to foreign shareholders are subject to a 20% withholding tax, which can be reduced or eliminated through Taiwan’s network of double taxation treaties.
Foreign investors may benefit from lower withholding tax rates under applicable tax treaties, reducing the tax burden on repatriated profits.

Service Providers for Company Incorporation

These service providers specialize in helping foreign businesses with company registration, compliance, tax filing, and other legal requirements in Taiwan.

Travel to Taiwan for a better impression

The best preparation for doing business in any country is visiting it. This way you can experience the culture, check the shops and build your network.

With Trip.com you can compare flights and also book your hotel.

Hotellook compares different hotel sites so you always have the best rate.

Localrent connects you to national rental car providers per country.

Frequently asked questions

How to convince an importer in Taiwan to work with you?

As in any country, convincing an importer or wholesaler to put your product in his assortment is difficult. Also in Taiwan importers look at the rotation of the product, how easy and often they can sell it, and multiply this with the margin they can make on it. The result should be higher than they earn now from any competing product. Only if you have proper sales data, for example from other countries, they will engage in a discussion with you.