Interested in opening a company in Taiwan? This article offers you important information about the main types of companies, the incorporation process, and much more. Explore the following lines and get in touch with our local agents if you want personalized assistance and comprehensive company formation services.
Table of Contents
Types of companies available in Taiwan
Below are some of the most popular business types for international and local entrepreneurs who want to expand their portfolios in Taiwan:
- the limited liability company is the most popular business structure in Taiwan. TWD 1 is the minimum share capital required for an LLC in Taiwan;
- the company limited by shares is another suitable option and often the choice of international investors in Taiwan. There is no minimum share capital imposed; however, shareholders must cover the initial company formation costs, and have around TWD 500,000;
- the closely held company limited by shares in Taiwan is a non-public subcategory of a company limited by shares, but with more flexibility;
- entrepreneurs from abroad can also set up branches and subsidiaries in Taiwan;
- although it is an option, sole proprietorship in Taiwan is not that popular. The same thing goes for partnerships in Taiwan;
- for non-activities and market tests, foreigners can set up liaison/representative offices in Taiwan.
These are some of the main business entities available in Taiwan. Tailored assistance plus advice can be provided by one of our local specialists.
How to open an LLC in Taiwan
If a limited liability company is your business choice in Taiwan, these are the main requirements for company incorporation:
- applicants/company representatives must submit the desired business name with the Ministry of Economic Affairs. Once the approval is issued, the incorporation process can start;
- another approval must be obtained from the Investment Commission, part of the Ministry of Economic Affairs in Taiwan.
- an LLC in Taiwan must have a bank account, preferably local;
- once all approvals are issued, together with the Articles of Association will be submitted to the local Trade Register. An establishment approval letter will then be issued;
- the Unified Business Number is the tax ID that must be obtained from the National Taxation Bureau in Taipei.
These are some of the main steps in incorporating an LLC in Taiwan. Businessmen must know that the company must have insurance. Plus, the temporary bank account will be transformed into a permanent business bank account once the formation procedure is concluded.
Taxation in Taiwan
Even though Taiwan is not an offshore jurisdiction, the country operates as a tax-efficient offshore banking unit, which is quite beneficial for international investors activating in the financial sector. Here are the main taxes in Taiwan:
- 20% is the corporate income tax in Taiwan. Companies registering below TWD 120,000 as taxable income/year are exempt from this tax.
- 5% is the additional tax imposed on profits that are not delivered by the end of the next fiscal year in Taiwan.
- 5% is the standard VAT rate in Taiwan.
- 20% is the Alternative Minimum Tax (AMT) imposed on foreign-source income above TWD 7.5 million.
Ready for company formation in Taiwan? Now that you know some of the main company types, formalities, and taxes, you can get in touch with our local specialists and discover our services. We provide a free case evaluation to our new customers.