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The Ultimate Guide To
Employment in Taiwan

Employing in Taiwan: What You Need to Know

Employment in Taiwan is governed under the Labor Standards Act (LSA), which establishes the minimum terms and conditions of employment in Taiwan. Conditions such as issues on labor contracts, wages, work hours, leaves of absence, compensation, retirement, and benefits all are covered in the LSA. Hiring foreign nationals is governed by the Employment Services Act (ESA). Provisions for labor contracts are not very strict and are flexible. Currently, there is a push for greater flexibility for the LSA to provide fixed-term labor contracts, and to incorporate dispatched workers in employment regulations.

 

Key Factors to Consider When Employing in Taiwan

Taiwanese Labor laws allow the formation of trade unions under the constitution, which may form a larger confederation of businesses for widespread employee representation, such as the Taiwan Confederation of Trade Unions. The formation of employee and employer associations are widely used to discuss and negotiate employment issues, as well as lobbying the government on employment policies.

The Collective Agreements Law provides for collective bargaining arrangements, which occurs at the enterprise level. Although it is allowed, very few employees or employers are under collective bargaining arrangements.

Using Shield GEO EOR Services: How We Can Help You

Compliance with local employment requirements is just one of the issues foreign companies face when employing staff in Taiwan. For companies which intend to employ their staff directly through their incorporated Taiwanese entity, professional legal advice is recommended. Shield GEO provides an alternative path for companies to outsource the employment of their staff in Taiwan.

As a Global Employer Organization (GEO), Shield GEO acts as the Employer of Record and ensures the employment is compliant with host country regulations regarding employment. In addition Shield GEO will handle payroll processing, tax and immigration. Using Shield GEO is the fastest and most cost effective way to deploy local and foreign workers into Taiwan.

The Shield GEO solution is an attractive alternative where

– the company is looking to employ staff quickly

– the company doesn’t have an appropriately incorporated entity in Taiwan

– the company wants to work within a defined budget

– the company wants to limit its initial commitment in Taiwan

– the company needs help with tax, employment, immigration and payroll compliance in Taiwan

Shield GEO can contract directly with the company to employ and payroll their staff in Taiwan. Shield GEO supplies local employment contracts for the staff which ensure that local statutory requirements are met covering issues such as termination, probation periods, leave entitlements and statutory benefits.  Shield GEO is able to advise companies how to cover local employment regulations whilst still providing consistent global employment policies. Understand more about outsourced employment through Shield GEO.

A GEO EOR Solution vs DIY Employment in Taiwan

Companies entering Taiwan must make a decision whether to use their own resources for a Do-It-Yourself (DIY) approach, or to use a Global Employment Organization to handle payroll and employment responsibilities.  A GEO or Taiwanese Employer of Record solution makes it faster, easier and cheaper to deploy staff if they don’t have a Taiwanese entity established that can run payroll.

A DIY approach will typically be delayed until there is a properly incorporated company ready to run payroll and may be a costly option.  Shield GEO can deploy foreign staff in 4-6 weeks and local staff in 48 hours. Additionally Shield GEO is responsible for all compliance issues related to the employment.

Using Shield GEO Employer of Record Services in Taiwan

Payroll

Payroll Taiwan
Management Fee for Employer of Record Services / Monthly Payroll Costs

Please contact us for a quote

Notes

Shield GEO pays the employee on a monthly basis, typically on the last working day of the month although we can adapt to your preferred schedule. Income tax and social security (where applicable) are deducted at source and paid to the local tax authorities.

Currency ?

Taiwan Dollar (NTD)

Tax Amount
Grossed income Tax Rate (%)
NT$1 – 520,000 5%
NT$520,001 – 1,170,000 12%
NT$1,700,001 – 2,350,000 20%
NT$2,350,001 – 4,400,000 30%
NT$4,400,001+ 40%
Tax Returns Supplied

Yes

Employers Social Security and statutory contributions

No social security taxes are levied in Taiwan, but nominal labor insurance premiums and national health insurance premiums are imposed by all business entities.

Labor Insurance Scheme: 6.35%

National Health Insurance Scheme: 5.008%

Employees Social Security and statutory contributions

No social security taxes are levied in Taiwan, but nominal labor insurance premiums and national health insurance premiums are imposed by all business entities to the employee.

Labor Insurance Scheme: 1.8%

National Health Insurance Scheme: 1.4731%

Payroll and Tax in Taiwan

Taiwan does not impose a complicated or onerous tax system on foreign companies operating in the country. The primary concerns for a foreign company that needs to comply with tax laws in Taiwan are: Individual income tax for employees in Taiwan, social security costs, VAT, withholding tax, business tax and permanent establishment concerns.

Your Payroll Options in Taiwan

Information Explanation
Remote Payroll ?

A remote payroll in Taiwan is where a foreign company, i.e. a non-resident company, payrolls a resident employee in Taiwan. This applies to both local and foreign employees. One option for a non-resident company to payroll its employees (local and foreign) in Taiwan is to use a fully outsourced service like a GEO or PEO which will employ and payroll the staff on their behalf.

Local Payroll Administration ?

In some cases, a company will register their business in China under one of the forms available, (RO, WFOE or JV) but prefer to have another company administer its payroll.  This can be accomplished through a payroll provider. It is important to note that the company, as the Employer of Record, is still fully responsible for compliance with employment, immigration, tax and payroll regulations. But the payroll calculations, payments and filings can all be outsourced to the payroll provider.

Internal Payroll ?

Larger companies with a commitment to Taiwan may wish to run their own local payroll for all employees, foreign and local.  In order to accomplish this, they will have to complete incorporation, register the business and then hire the necessary staff.  There will be a need for in country human resources personnel who have the background needed to manage a Taiwanese payroll, and can fulfill all tax, withholding, and payroll requirements.

This approach carries significant cost and requires some knowledge of local employment and payroll regulations.  The company will need a local accounting firm and potentially legal counsel to ensure full compliance with Taiwanese employment laws.

Fully Outsourced Payroll & Employment ?

Companies can outsource the employment and payroll of their staff in Taiwan to a GEO, like Shield GEO. This is possible for both foreign workers and Taiwan nationals. This is the easiest, fastest and safest way to payroll staff in Taiwan.

Shield GEO manages all aspects of payroll for workers in Taiwan, including taxes, withholding, social security payments and other statutory requirements. Shield GEO becomes the Employer of Record and employs the staff on behalf of the client.

Staff are paid monthly with tax and social security deducted at source and paid to local authorities. Shield GEO will invoice the client monthly in advance of the payroll date. The invoice consists of the Total Cost of Employment (Base salary + Employers Statutory Contributions + Additional statutory contributions) and a Management Fee. Shield GEO provides the employees with payslips.

Read more about outsourced payroll and employment through Shield GEO.

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Setting up payroll in Taiwan

Information Explanation
National Currency ?

Taiwan Dollar (NTD)

Tax Figures

Information Explanation
Corporate Income Tax ?

Company tax rate: 17% at a NT$120,000 threshold level

Income Tax Rate ?
Grossed income Tax Rate (%)
NT$1 – 520,000 5%
NT$520,001 – 1,170,000 12%
NT$1,700,001 – 2,350,000 20%
NT$2,350,001 – 4,400,000 30%
NT$4,400,001+ 40%
Sales Tax ?

The sales tax in Taiwan is known as the business tax (BT) and is imposed through the VAT and non-VAT system.

 

The basic rate of the BT is 5%.

 

Exports, export-related services, items sold by duty-free shops, goods sold to export-oriented entities in tax-free export zones and goods sold to a bonded factory are exempt from this sales tax.

Withholding Tax ?

Dividends: 20% imposed on dividends paid to a nonresident, unless it is reduced by a tax treaty.

 

Interest: 15% imposed on interest to a nonresident, unless it is reduced by a tax treaty.

 

Royalties: 20% imposed on royalties paid to a nonresident, unless it is reduced by a tax treaty.

Other Tax ?

Customs duty: Customs duty is payable based on the dutiable value of the volume of goods imported. It is calculated on the basis of the true transaction price.

 

Excise duty: Includes commodity taxes, tobacco and liquor tax.

 

Stamp duty: Stamp duty is levied as follows:

  • 4% of the receipt amount for cash receipts
  • 1% of the contract value for a contractual agreement
  • 1% of the contract value for sale, exchange or division of real property

 

Property tax: Includes the land value tax, imposed at 1% – 5.5% of the public land value, house tax and deed tax on property.

 

Estate tax: flat tax of 10%.

 

Gift tax: flat tax of 10%.

Taiwan Immigration and Work Permits

In order to work in Taiwan, a foreign worker must first sign an employment contract with the company, where the company must then apply for a work permit from the Ministry of Labor before the worker may work in Taiwan. A work visa and an Alien Residence Certificate is required to legally reside in Taiwan during the duration of employment in Taiwan.

There are regulations that outline the permitted industries and occupation types. Among the permitted industries for foreign workers are oceanic fishing, housemaid, manufacturing, construction, nursing, bilingual translation and cooks.  Taiwan does allow the employment of specialized foreign workers who are able to provide specialized knowledge and skills for competitive technologies.

Your Options

Have your own Company?

The employer is the sponsor for the employee and may employ foreign workers on the basis of an employment relationship or a contractual relationship to fulfil a specified obligation. Either way, the employer should be aware of the regulations and steps to fully sponsor a foreign employee for work in Taiwan.

Sponsorship Process:

1.  Offer of employment

The employee must receive a letter of invitation or employment contract from the employer in Taiwan, indicating an offer to work in the nation. The contract should be signed and returned to the employer, who may then proceed to the application for a work permit.

It should be noted that employers who have been incorporated in Taiwan for less than a year have minimum capital requirements that must be met.

2. Application for work permit

The employer must submit an application to the Council of Labor Affairs for a work permit. The work permit is typically issued for six months’ validity, although may be extended up to a maximum period of three years.

For the application of the work permit, there are two job categories, which are specialized or technical workers and managerial employees. For the employer to be eligible to hire managerial employees, there are more stringent revenue requirements. In addition, different types of employment require different documents.

The foreign employer must meet one of the following requirements when hiring a foreign employee:

  • Operational capital of NT$5 million for Taiwanese entities incorporated for less than one year
  • Revenues in excess of $NT10 million for Taiwanese entities established for one year or more
  • Total import and export commission revenue of US$400,000 for the preceding year
  • If the company is a representative office, the necessary approval is given by the relevant authorities
  • The company has R&D centers or operational headquarters approved by the authorities
  • The employer has made significant contributions to the economic development of Taiwan

Required documents from employer

  • Copy of most recent year’s corporate income tax return
  • Copy of the company representative’s ID card or passport
  • Copy of the company’s registration certification, business registration and other permits
  • Copy of the letter of foreign investment approval issued by Investment Commission
  • Copy of employment contract

Required documents from employee

  • Copy of education diploma authenticated by a Taiwanese embassy. Typically a bachelor, master or Ph.D. degree
  • Copy of authenticated work experience certificate. Proof of employment should be at least five years’ experience in a related field
  • Copy of individual income tax statement
  • Medical examination report and receipt for examination fee
  • Copy of passport
  • Two passport photos

Cost:

  • NT$2,000 for each approval application
  • NT$100 for review fee

Time: 7 – 14 days

3. Application for visa

Once the work permit has been approved by the Ministry of Labor, the foreign worker must apply for a work visa from an Overseas Office of the Republic of China (Taiwan). The visa allows the employee to reside in Taiwan for the duration of employment.

Foreign passport holders entering Taiwan must have valid visas when they enter, although the Ministry of Foreign Affairs may grant exemptions to nationals from certain countries. A visa may be single-entry valid for three months, or multiple entries valid from three months to a year.

The employee must submit the visa application to the Taiwanese Bureau of Consular Affairs in their resident country. The consular officer will examine the application and relevant documents, and will request an interview if necessary. If approved, the employee will be issued the visa.

Required documents from employee

  • Passport valid for at least 6 months
  • Completed visa application form
  • Two passport-sized photos
  • Work permit provided by employer
  • Any identification documents if spouse and children are accompanying the employee

Cost:

  • Single-entry resident visa: US$66
  • Multiple-entry resident visa: US$132
  • Additional handling fee: $US24 for visa applications made at port of entry

Time: 30 working days

4. Application for Alien Resident Certificate

Once the employee receives the work permit from the employer and has visa clearance, they are allowed to travel to Taiwan. The employee must obtain an Alien Resident Certificate (ARC), which is proof that the visa may be used for day-to-day activities without the need for a passport while the employee is in Taiwan. The ARC also allows multiple re-entries, which must be shown at immigration checkpoints if the employee intends on entering and exiting Taiwan. This is done through a local National Immigration Agency (NIA) in Taiwan, and must be done within 15 days of arrival in Taiwan.

Required documents from employee

  • Application form
  • One color photo
  • Original passport and visitor visa
  • A notarized health certificate if required
  • A certificate of criminal record of required
  • A certificate of current residence
  • A certificate of cause

Cost:

  • NT$1,000 for ARC valid for one year for a resident visa.
  • NT$3,200 for applicants holding a visitor visa.

5. Employee medical examination

Within 3 days of arrival in Taiwan, the foreign worker must undergo a medical examination if it is the first time traveling to Taiwan. This can be done at a local Center for Disease Control.

6. Application for employee insurance

Once the employee has obtained the work permit, visa and Alien Resident Permit, he/she is able to work under the employer. However, the employer must take further measures and registration steps within three days of receiving the ARC, or will be subject to a small fine.

The employer should apply for coverage enrollment of labor insurance with the Bureau of Labor Insurance upon the date of the worker’s arrival.

Required documents from employer

  • Application form
  • Copy of the employee’s current residence proof
  • Identification proof of labor
  • Copy of the employee’s full passport
  • Copy of an authenticated ARC
  • Copy of employee’s work permit

 

7. Other post-arrival applications for employer

Within three days’ of the worker’s arrival, the employer must apply for an entrance report at the local Department of City Government. This must be done or the employer’s recruitment permit and the employer’s work permit may be annulled.

The employer must also apply for the coverage enrollment of National Health Insurance within 3 days from the date the ARC is issued. This is done through the Bureau of National Health Insurance.

Once these steps have been taken by the employer, the employee will be properly registered in Taiwan with the relevant authorities and may commence employment in Taiwan.

Use the Shield GEO Employer of Record Solution?

Once you get in touch with us, one of our consultants will take all the work off your hands, coordinate with our local partners to get all the required permits organised, provide the processing time, costs, document-checklist and keep you informed through the process.

Contact us to find out more.

Types of visas in Taiwan

Category Description of Visa
Visitor visa

The visitor visa is intended for foreign nationals who wish to enter Taiwan temporarily must apply for this visa. Nationals from certain countries that have visa-exempt entry status may enter for stays of 30 days or less, although any period of time longer will require a visitor visa.

Depending on the nationality, visitor visas may be issued for single entry or multiple entries. The validity of the visitor visa is valid from 3 months up to 1 year, unless stated in reciprocal visa agreements between Taiwan and certain countries.

The holder of the visitor visa allows durations of stay of less than 60 days, which may not be extended, and periods of stay for 60 days or longer, which may be extended up to 180 days. The extension of stay is administered by the National Immigration Agency of the Ministry of the Interior.

Processing Time: 4 working days

Fee: US$50 for single entry, US$100 for multiple entry

Working Holiday Visa

The working holiday arrangement allows nationals from certain countries aged between 18 and 30 years to have an extended holiday in Taiwan with some short-term work or study arrangements. Both work and study are to supplement the living arrangements during the stay or to explore Taiwan further.

The working holiday visa is valid for a period of 12 months. The visa allows the individual to stay in Taiwan for 180 days, and may be extended for another 180 days. The application for extending the working holiday visa should be submitted to the local offices of the National Immigration Agency.

Individuals may legally engage in work without applying for a work permit under a working holiday visa, although may not work for the same employer for more than 6 months. Similarly, students may study up to 4 months under this visa arrangement, without any requirements to take Mandarin language courses.

Processing Time: 4 working days

Application Fee: $US100

Resident visa

Foreign citizens intending to travel to Taiwan and live in the nation for more than 6 months should apply for a Resident visa, giving them the authority to reside in Taiwan. The resident visa may be obtained if the national is an immediate family member of a Taiwanese citizen with a household registered in Taiwan, or obtained an employment relationship with a sponsored employer in Taiwan. Authorization must be given from the Workforce Development Agency.

The resident visa is valid for 3 months from the date of issuance, and is normally granted for a single entry. Resident visa holders must apply for an Alien Resident Certificate (ARC) and a re-entry permit at local centers of the National Immigration Agency 15 days from entering Taiwan. The resident visa is usually valid for as long as the ARC is valid, which usually extends until the employment contract expires.

Processing Time: 4 working days

Application Fee: $US132

Entrepreneur visa

The Ministry of Foreign Affairs has implemented the entrepreneur visa effective as of July 31 2015, in an effort to foster greater innovation and entrepreneurship in the nation. Applicants will have their eligibility examined by the Investment Commission of the Ministry of Economic Affairs, including sufficient funding, education or patents.

Setting up a company in Taiwan

When setting up a company you may want to consider these factors:

  1. Business Factors

    The Taiwanese government has implemented welcoming and encouraging foreign investment policies, including the provision of customized, one-stop solutions for domestic and foreign investors to engage in investments into Taiwan smoothly. Taiwan’s industries have been largely deregulated, with most sectors having no ownership limits for foreigners. The government has offered various tax and non-tax incentives to encourage greater corporate investments, including special tax regimes for specific industries.

    Taiwan bases its law on the civil law system, with clearly defined terms in the law codes and regulations much like Germany, Japan and South Korea. There is an impartial treatment towards most judicial matters, where commercial dispute resolution may be subject to the Taiwanese jurisdiction.

    When doing business in Taiwan, the use of distributors, agents and local representatives are a popular method of setting up a business presence due to the advantages of local knowledge and networks. Foreign investments do require a Foreign Investment Approval (FIA) issued by the Investment Commission (IC) of the Ministry of Economic Affairs (MEA) as a prerequisite for foreign investment. Foreign investors may invest into most business sectors, except for those on the Negative List. Foreign invested enterprises are protected under the Statute for Investment by Foreign Nationals, which provide the same benefits and treatments as domestic Taiwanese businesses.

    Although Taiwan has a historically stressful relationship with mainland China particularly in the recent cross-strait relationship talks, Taiwan remains an attractive location do to the ease of starting a business for foreign companies. These factors should also be considered when incorporation in Taiwan:

    • The industry and type of business that will be conducted
    • Nationality of headquarters/individuals
    • Presence of existing trade agreements or relationships
  2. Location

    Location will be another factor. Separate cities and regions may have different rules, costs and availability. It is always recommended to seek advice from relevant professionals, such as business or legal advisors, accountants and others depending on your needs.

  3. Language

    Mandarin Chinese is the main language used in Taiwan. Various ethnic groups use Taiwanese Hokkien as a dialect, while some with Haka ancestry typically speak Hakka dialect. English has a smaller yet still important role in the language of Taiwan, where it is the most common foreign language taught at some large private schools and is compulsory in elementary school.

Your Options

Most foreign businesses entering Taiwan will choose to use a local agent or distributor to gain an initial foothold in the business community. The options for incorporating a branch office, representative office or a locally-incorporated company is more applicable to markets of considerable size or for foreign companies who wish to establish a persistent market presence.

Taiwanese investment policy allows foreigners to invest in most business sectors except the ones on the Negative List. Foreign businesses in particular may only incorporate once they have obtained approval from the Ministry of Economic Affairs’ Investment Commission (MOEAIC). The Taiwan Company Act allows four kinds of company to be established:

  • Subsidiary
  • Partnership
  • Foreign Branch
  • Representative Office

Subsidiary

The subsidiary is generally applicable to foreign entities who wish to establish a limited company in Taiwan. This method of incorporation is much more involved than representative offices and branches due to the length incorporation procedure and requirements. There are several forms of subsidiaries that a foreign company may choose:

  • Unlimited company
  • Unlimited company with limited liability shareholders
  • Limited company
  • Company limited by shares

Almost all subsidiaries are incorporated through a company limited by shares, while the unlimited company and company with limited liability shareholders are rarely used.

Companies incorporated this way are generally not restricted by the Company Act on the activities they may carry out, except general restrictions on investments, loans of capital and guarantees.

Liability

Each shareholder is liable for the company up to the amount of capital contributed.

Minimum Ownership

A foreign company can be the sole corporate shareholder of a limited company or a company limited by shares, except for certain restricted sectors.

Number of Founding Members

The company has at least one shareholder.

Minimum Capital Requirements

There are no minimal capital requirements for a limited company or company limited by shares, unless it operates in a sector that requires special permits or approvals.

A minimum limit of NT$5 million is required as start-up capital if the company wishes to employ foreign professionals to work in Taiwan in the first year.

Typically, the paid-in capital should be sufficient to cover set-up costs.

 

Incorporation procedure:

1. Apply for Search and Reservation of Company name

The company may submit an online application to search for and reserve a company name at the one-stop service request website, or it may be submitted via post or in person to the Department of Commerce of the Ministry of Economic Affairs (MOEA). The company name reservation is valid from the date of approval of the Reservation Application for six months.

Required documents:

  • Application form for Reservation of Company Name and Business Scope

Cost: NT$300 per in-person or post application, or NT$150 through online application

Time: 2 days

2. Apply for Foreign Investment approval

If the company is a foreign investor, the approval for foreign investments must be obtained from the Investment Commission of the MOEA. This is usually submitted by a local agent who is a resident of Taiwan who must be elected by the foreign company to submit the application. Documents must be authenticated by the government agency or notarized by a court at the location of the foreign company. A Chinese translation should be attached.

Required documents:

  • Application Form A
  • Original approved application form for Reservation of Company Name
  • Confirmed roster of shareholders and capital amount
  • Power of Attorney authorizing a representative of a corporate investor
  • Certificate of Incorporation and register of shareholders if needed
  • Power of Attorney from a corporate investor appointing a local agent for the foreign investment application process
  • Copy of the passport from corporate representative

Time: 4 days

3. Apply for Examination of Investment Capital

For foreign companies, the components of the investment capital must be examined by the Investment Commission. Once the investors have obtained approval for foreign investment and have remitted the investment capital in Taiwan, this step is taken.

Required documents:

  • Application Form C
  • Letter of Approval of foreign investment issued by Investment Commission of MOEA
  • Copy of bank’s Inward Remittance Advice
  • Copy of bank’s Foreign Exchange Memorandum
  • Copy of bank’s account passbook or statement

Time: 2 days

4. Apply for Company Registration

Once the articles of incorporation have been approved by shareholders, the company registration should be within 15 days from the approval date if it is a limited company, and 15 days from when the chairman of the board of directors is elected for a company limited by shares.

Required documents:

  • Application Form
  • Other approval letters issued from different authorities if required
  • Articles of Incorporation
  • Minutes of the incorporators’ meeting
  • Minutes of the Board of Directors’ meeting and attendance record
  • Name, address and number of shares subscribed and paid by each shareholder
  • Consent letter from chairman of the board of directors
  • Power of attorney to appoint individuals as corporate shareholders’ representatives
  • CPA report for verifying paid-in capital and other supporting documents and the authorization letter of the CPA
  • ID documents required from incorporators, directors and supervisors
  • Incorporation Registration Form

Cost:

  • 1/4000 of the company’s authorized capital, minimum of NT$1,000
  • CPA report ranges from NT$5,000 – $20,000

Time: 2 days

5. Apply for Importer/Exporter English name and registration

Once the company has been properly registered in Taiwan, the company must reserve a trading name if the subsidiary is to import and export from abroad, which requires an English business name. This is done through the Bureau of Foreign Trade of the MOEA. The company must then be registered under this English name.

Required documents:

  • Application Form for reservation of English Name of the Company
  • Application Form for Importer/Exporter Registration

6. Apply for Business Registration

This step is usually completed automatically by a local agency of the national tax authority once the company has been registered and has received approval and details of the company’s registration. The company may need to submit additional supporting documents if requested by the agency of the national tax authority.

7. Apply for Factory Registration in Industrial Parks

If required, a longer, more comprehensive registration procedure is required if the incorporated company is to conduct large scale manufacturing processes.

Partnership

Foreign investors are allowed to invest into Taiwan through setting up a sole proprietorship or a general partnership with one or more individuals. There are no set minimum capital requirements for partnerships, although foreign investment approval is required, much like the subsidiary incorporation procedure.

Partners of a partnership in Taiwan may only be a natural person and not a business entity. All partners are jointly and severally liable for the obligations of the partnership. Each partner’s contribution and profit sharing percentage is provided for in the partnership agreement.

Under the Limited Partnership Act, entrepreneurs may explore other business structures for partnerships which are still under revision of implementation rules as of June 2015. This includes the limited liability partnership structure, which has previously not been available in Taiwan.

Liability

All partners are jointly and severally liable for obligations of the partnership.

Minimum Ownership

There are no restrictions on the nationality of the partners.

No. Founding Members

At least two general partners.

As of June 2015, a limited partnership is allowed, comprised of at least one general partner and one limited partner.

Minimum Capital Requirements

There is no minimum requirement for partnerships.

 

Incorporation procedure:

1.  Apply for Search and Reservation of Company name

The partnership may submit an online application to search for and reserve a partnership name at the one-stop service request website, or it may be submitted via post or in person to the Department of Commerce of the Ministry of Economic Affairs (MOEA). The partnership name reservation is valid from the date of approval of the Reservation Application for six months.

Required documents:

  • Application form for Reservation of Company Name and Business Scope

Cost: NT$300 per in-person or post application, or NT$150 through online application

Time: 2 days

2. Apply for Foreign Investment approval

If a partner is a foreign investor, the approval for foreign investments must be obtained from the Investment Commission of the MOEA. This is usually submitted by a local agent who is a resident of Taiwan who must be elected by the foreign partner to submit the application. Documents must be authenticated by the government agency or notarized by a court at the location of the foreign company. A Chinese translation should be attached.

Required documents:

  • Application Form A
  • Original approved application form for Reservation of Company Name
  • Confirmed roster of shareholders and capital amount
  • Power of Attorney authorizing a representative of a partnership investor
  • Certificate of Incorporation and register of shareholders if needed
  • Power of Attorney from a corporate investor appointing a local agent for the foreign investment application process
  • Copy of the passport from partner representative

Time: 4 days

3. Apply for Examination of Investment Capital

For foreign partners, the components of the investment capital must be examined by the Investment Commission. Once the investors have obtained approval for foreign investment and have remitted the investment capital in Taiwan, this step is taken.

Required documents:

  • Application Form C
  • Letter of Approval of foreign investment issued by Investment Commission of MOEA
  • Copy of bank’s Inward Remittance Advice
  • Copy of bank’s Foreign Exchange Memorandum
  • Copy of bank’s account passbook or statement

Time: 2 days

4. Apply for Partnership Registration

Once the articles of incorporation have been approved by shareholders, the registration should be within 15 days from the approval date.

Required documents:

  • Application Form
  • Other approval letters issued from different authorities if required
  • Articles of Incorporation
  • Minutes of the incorporators’ meeting
  • Minutes of the partners’ meeting and attendance record
  • Power of attorney to appoint individuals as partners’ representatives
  • CPA report for verifying paid-in capital and other supporting documents and the authorization letter of the CPA
  • ID documents required from incorporators, directors and supervisors
  • Incorporation Registration Form

Cost:

  • 1/4000 of the company’s authorized capital, minimum of NT$1,000
  • CPA report ranges from NT$5,000 – $20,000

Time: 2 days

5. Apply for Importer/Exporter English name and registration

Once the partnership has been properly registered in Taiwan, the company must reserve a trading name if the subsidiary is to import and export from abroad, which requires an English business name. This is done through the Bureau of Foreign Trade of the MOEA. The partnership must then be registered under this English name.

Required documents:

  • Application Form for reservation of English Name of the Company
  • Application Form for Importer/Exporter Registration

6. Apply for Business Registration

This step is usually completed automatically by a local agency of the national tax authority once the partnership has been registered and has received approval and details of the partnership’s registration. The partners may need to submit additional supporting documents if requested by the agency of the national tax authority.

Foreign Branch

A company that is incorporated outside of Taiwan may choose to establish a branch office to conduct business in Taiwan. Foreign branches in Taiwan are not allowed to transact business without obtaining a certificate of recognition and completing the procedures for branch office registration.

Branch offices have the same rights and obligations as a domestic company, although is not considered a separate legal entity from the parent company. All liabilities are assumed by the head office. The foreign company must designate a representative for the Taiwanese branch who may be a foreign national. The parent should appropriate funds exclusively for its Taiwan operations.

Branch offices have tax advantages over a wholly-owned subsidiary company, in that it is exempt from tax on repatriation on after-tax profits to the parent company.

Liability

The parent company assumes all liability of the branch office.

Minimum Ownership

The branch is owned by a foreign company.

Minimum Capital Requirements

There are no minimum capital requirements for establishing a branch office, although the parent company should remit sufficient operating funds before establishment.

A minimum limit of NT$5 million is required as start-up capital if the company wishes to employ foreign professionals to work in Taiwan in the first year.

 

Incorporation procedure:

1.  Apply for Search and Reservation of Company name

The company may submit an online application to search for and reserve a company name at the one-stop service request website, or it may be submitted via post or in person to the Department of Commerce of the Ministry of Economic Affairs (MOEA). The company name reservation is valid from the date of approval of the Reservation Application for six months.

Required documents:

  • Application form for Reservation of Company Name and Business Scope

Cost: NT$300 per in-person or post application, or NT$150 through online application

Time: 2 days

2. Apply for Recognition of Foreign Company and Branch Registration

The parent company must apply to the Department of Commerce of the MOEA for the recognition of the foreign company and to also register the branch in Taiwan.

Required documents:

  • Copy of application form for name reservation with MOEA approval seal
  • Two copies of the registration card for recognition
  • Two copies of the registration card for the branch
  • Application letter
  • Power of attorney appointing agent
  • Power of attorney appointing branch manager
  • Copy of the articles of incorporation and bylaws
  • Copy of any government authorized approval for special approval
  • Minutes of the board of directors’ meeting
  • Copy of the notice of inward remittance and exchange memo for operating capital remitted into Taiwan
  • Power of attorney appointing CPA or lawyer to apply for recognition and registration

Cost:

  • 1/4000 of the company’s authorized capital, minimum of NT$1,000
  • CPA report ranges from NT$5,000 – $20,000

Time: 4 days

3. Apply for Examination of Investment Capital

For foreign companies, the components of the investment capital must be examined by the Investment Commission. Once the investors have obtained approval for foreign investment and have remitted the investment capital in Taiwan, this step is taken.

Required documents:

  • Application Form C
  • Letter of Approval of foreign investment issued by Investment Commission of MOEA
  • Copy of bank’s Inward Remittance Advice
  • Copy of bank’s Foreign Exchange Memorandum
  • Copy of bank’s account passbook or statement

Time: 2 days

4. Apply for Importer/Exporter English name and registration

Once the company has been properly registered in Taiwan, the company must reserve a trading name if the subsidiary is to import and export from abroad, which requires an English business name. This is done through the Bureau of Foreign Trade of the MOEA. The company must then be registered under this English name.

Required documents:

  • Application Form for reservation of English Name of the Company
  • Application Form for Importer/Exporter Registration

5. Apply for Business Registration

This step is usually completed automatically by a local agency of the national tax authority once the company has been registered and has received approval and details of the company’s registration. The company may need to submit additional supporting documents if requested by the agency of the national tax authority.

Representative Office

A foreign company may choose to use a representative if they do not intend to transact business but wish to conduct limited acts related to their business. The company may require a resident in Taiwan as a representative for the application process. The representative acts as the legal agent for the company regarding matters like contracts, procurement and quotations.

The representative office is ideal for companies who wish to establish a limited presence prior to making a more permanent commitment in Taiwan. It is one of the easiest methods of incorporation, although the level of activities is restricted.

Incorporation procedure:

The only step required for the setup of a representative office is the application procedure. The application and designation of a representative should be filed according to Article 386 of the Company Act, with any translations to Chinese provided.

Required documents:

  • Document certifying the identity and residence of the representative
  • Power of attorney if application is to be filed by a lawyer or CPA
  • Copy of any documents certifying establishment of the foreign company in its country
  • Power of attorney appointing the representative in Taiwan
  • Copy of original house lease contract for the representative office
  • Copies of the registration card
  • Application form

Outsourcing Employment Through a GEO Employer of Record Service

Whether to incorporate in Taiwan, and what sort of entity to setup are just two of the many choices companies must make when expanding into a new market.

If the company intends to have staff in Taiwan they must also decide whether they will administer that employment internally or use a Global Employment Organization to handle payroll and Employer of Record responsibilities.  A GEO Employer of Record solution is an attractive alternative where

– the company is looking to setup an office quickly;

– the company wants to work within a defined budget;

– the company wants to limit its initial commitment in Taiwan;

– the company needs help with tax, employment, immigration and payroll compliance in Taiwan.

The complexity of employment regulations in Taiwan makes the use of a GEO advisable coupled with local legal counsel to ensure full compliance with employment laws, for example the drafting of local contracts for workers.

Shield GEO provides a comprehensive service in Taiwan allowing companies to deploy their staff quickly with reasonable, clearly stated costs and timeframes. The company contracts directly with Shield to employ and payroll their staff on their behalf in Taiwan.

Shield GEO then becomes the Employer of Record. Shield GEO assumes the legal responsibility for these employees, sponsoring them on work permits, complying with local employment law and running their monthly payroll. Using Shield GEO is the fastest and most cost effective way to deploy local and foreign workers into Taiwan. Read more about outsourced employment through Shield GEO.

  • Tax Compliance : What is FATCA and who is affected?

Tax Compliance : What is FATCA and who is affected?

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