Taiwan

Comparison of Taiwan Branch and Subsidiary When a foreign company decides to set up an operation in Taiwan to carry out business activities, it could choose either a limited liability company (or a company limited by shares) or a branch office. A limited liability company is a separate legal entity independent from its parent company, whereas a branch office is merely an extension of the operation of the head office. This article introduces briefly the difference between a limited liability company and a branch office in Taiwan. 1. Definition and Main Differences Between a Branch and a Subsidiary A subsidiary is incorporated pursuant to the Company Act and is an independent legal entity. A subsidiary can be listed in the stock market and is entitled to various tax incentives. When a subsidiary distributes dividends to its foreign shareholders, it is subject to 20% withholding tax. A branch is also incorporated […]

Types of Taiwan Visas In terms of Taiwan Statute Governing Issuance of ROC Visas in Foreign Passports, there are four types of visa that may be issued in foreign passports, namely: 1. Visitor’s Visa There are four main types of visitor visa, namely: 1. two weeks – intended for short stays only, no extension allowed; 2. one month – intended for short stays only, no extension allowed; 3. sixty-days – can be extended for legitimate reasons unless bear the words “No extension will be granted” and 4. ninety-days – can be extended for legitimate reasons. A maximum of two extensions for 90 and 120 days may be obtained from any city/county police headquarters in Taiwan. 2. Landing VISA May be issued to the holders of USA passport, Hungary, Poland and Slovak, which the duration is for 30 days starting from the day after arrival and is not extendable nor be […]

1. Report to Department of Commerce, MOEA of registration particulars of foreign head office and establishment of representative office Documents required: (1) Application form (2) Certificate of incorporation issued by the government authority (authenticated by the representative of the Taiwan government in the country where the foreign head office is resident) and Chinese translation (3) Business registration certificate (for Hong Kong companies only) (authenticated by the representative of the Taiwan government in the country where the foreign head office is resident) and Chinese translation (4) Power of attorney appointing the legal representative in Taiwan (authenticated by the representative of the Taiwan government in Hong Kong) and Chinese translation (5) Photocopy of the ID card of the litigation / non-litigation agent in Taiwan (if a Taiwan national) (6) Photocopy of the passport of the litigation / non-litigation agent in Taiwan (if a foreign national) (7) Photocopy of Hong Kong permanent ID […]

1. Application to Department of Commerce, MOEA to reserve a Chinese company name General information required: Application for Reservation of Corporate Name and Business Scope (Chinese name of the proposed company and type of organization, applicant’s name, chop, passport or ID card number and residence address) Note: The applicant should be one of the incorporators   2. Application to Investment Commission of MOEA, SPA or EPZA (based on location of the invested company) for approval of foreign investors General information required: (1) Application form (2) Amount of foreign investment to be contributed in cash (3) Composition of total capital investment (4) Documents required from the foreign investor: (a) Photocopy of Certificate of Incorporation or passport (authenticated by the representative of the Taiwan government in the country where the foreign company is resident) (b) Power of Attorney appointing an ROC individual as attorney-in-fact to file the application (authenticated by the representative […]

1. Forms of Capital Contribution The Statute for Investment by Foreign Nationals provides regulations relating to the protection and administration of investments by foreign investors, individuals or enterprises within the ROC. It recognizes four forms of putting up capital: (1) Cash in the form of foreign exchange that is remitted or brought in. (2) Machinery, equipment, or raw materials imported for own use against self-provided foreign exchange. (3) Technical know-how or patent rights. (4) Investment principal, capital gains, net profits, interest or any other income generated as a result of transfer of investment, education of capital, or dissolution/liquidation as approved by the government.   2. Types of Investments There are three types of investment: (1) Investments for establishing a new business or expanding the capital base of an existing business, made individually or in association with other foreign nationals, the ROC government, Chinese nationals, or juridical persons. (2) Purchases of […]

Introduction Foreign investors usually establish the following forms of business entity for the purpose of carrying out business in Taiwan: 1. A corporation, which may either be a company limited by shares or a limited Liability company; or 2. A branch office. Company Limited by Shares / Limited Liability Company In order to establish a corporation in Taiwan, the foreign investor(s) should obtain approval under the Statute for Investment by Foreign Nationals (“SIFN”). A company established under SIFN is usually referred to as a Foreign-Investment-Approved (“FIA”) company. Certain industries are prohibited or restricted from foreign investment under SIFN. The prohibited industries are those which (1) may negatively affect national security, public order, good custom, or national health; and (2) are prohibited by laws and regulations. The application for investment in a restricted industry is subjected to the special approval of the competent authority in charge of such industry.   1. […]

1. Preliminary Stage (1) Lease of Office Space Firstly, the parent company will have to enter into a tenancy agreement in relation to the office space to be used by the branch office. The office must be located in a commercial building. (2) Legalization of Identity Documents of the Head Office The parent company is also required to arrange to have the identity documents, such as Certificate of incorporation and Articles of incorporation and bylaws (including all amendments to-date) of the parent company legalized by the Taiwan Embassy in the country where the parent company is registered. (3) Legalization of Board Minutes and Power The parent company is also required to issue and have the Board Minutes, Power of Attorney appointing the company’s litigious and non-litigious agent and Power of Attorney appointing the branch manager legalized by the Taiwan Embassy in the country where the parent company is registered. (4) […]

1. Tax Incentives (1) No import duty, commodity tax nor business tax will be imposed on machineries, instruments, raw materials, fuel, materials and semi-finished products imported by a Park enterprise for its own use. The enterprise is also excused from the off-duty, warrant, filing, or tax-mortgage process. However, in case of exporting the mentioned items to taxed regions, enterprises should pay import duty, commodity tax, and business tax according to regulations. (2) All products or labor outputs exported by Park enterprises are exempted from business taxation. (3) Corporate income tax: 20%. 2. Protection of Investors’ Rights (1) Foreign investors enjoy the same benefits and rights as local investors. (2) Foreign investors can own 100% of share in Park enterprises and can seek co-investors from government sectors or local investors. (3) Foreign or overseas Chinese investors can apply for remittance of their investment profits, capital gains, or other capital interests. (4) […]

1. Overview Taiwan classifies all taxes into two categories: National tax and City/County/Municipal tax. The classification of taxes and the competent tax collection authorities are listed below: National Taxes Municipal Taxes     Income Tax Land Value Tax Business Tax (VAT and Non-VAT) Amusement Tax Securities Transaction Tax Land Value Increment Tax Futures Transaction Tax Stamp Tax Estate and Gift Tax Vehicle License Tax Tobacco and Wine Tax Building Tax Commodity Tax Farm Tax Customs Duty Deed Tax   2. Fiscal Year Taxable income is ordinarily determined by reference to the year ending 31 December, which is the standard Taiwan financial year. However, with the consent of the Tax Authorities, taxpayers may choose a substituted accounting period.   3. Types of Taxes Income Tax All foreign residents with Taiwan source income shall pay consolidated individual income tax in accordance with law on the basis of their Taiwan source income. Those […]