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.
Office building where a foreign company is incorporated

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:

  1. Choosing a company name and ensuring it complies with Taiwanese naming regulations.
  2. 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.
  3. Designating at least one director (foreign or local) and appointing a local agent or representative to act on behalf of the company.
  4. Opening a corporate bank account in Taiwan and depositing the required initial capital.
  5. 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.

Do you need a local company?

A local entity is not always the answer. A distributor, an agent or an employer of record gives you presence in the market without the administration of your own company.

You do need one when you hire local staff, hold stock or an office, bid for public tenders, or when your activity creates a permanent establishment for tax purposes. The alternative is usually a branch: cheaper to set up, but the parent company stays liable.

Do you need help in Taiwan?

Our service providers are local specialists. They know the market, the regulations and the parties that matter, and they can support you with the steps on this page.

Ask a professional

Setting up a company in Taiwan in three steps

Step 1

Choose the legal form

Compare a limited company, a branch and a representative office on liability, minimum capital, local director requirements and what a bank will accept.

Step 2

Incorporate and register

Prepare the statutes and identification documents, register with the trade register and the tax authority, and open a local bank account — usually the slowest step.

Step 3

Stay compliant

Arrange bookkeeping, VAT and payroll from day one and note the filing deadlines. Fines for late annual accounts are common and easy to avoid.

Company incorporation in other countries

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