Six Considerations to Register a Taiwan Company


Starting a business is no small task. Doing so in a foreign country adds additional complexities, such as understanding local regulations, company structures, tax liabilities, and banking requirements. Taiwan is one of Asia’s most business-friendly environments, but it still requires careful planning.

To help you get started, we have compiled six crucial considerations when registering a company in Taiwan. If you ever feel overwhelmed, our team of accounting and consulting professionals at Songjer is ready to assist you.

1. Company Registration - Have a Chinese Business Name

Why is a Chinese Business Name Required?

The official language in Taiwan is Chinese, and the Taiwan Company Registry requires businesses to have an official Chinese name. While an English name can be used for international purposes, the registered name must be in Chinese.

Before selecting a name, ensure it is not already in use by checking with the Department of Commerce, MOEA. This step prevents duplication and ensures your business name is legally recognized.

English Business Names for International Transactions

Although companies primarily operate under their Chinese name, certain transactions, such as receiving international bank payments or exporting goods, may require an English name. Businesses can officially register an English name with the Bureau of Foreign Trade.

Choosing a Good Chinese Business Name

A well-thought-out Chinese business name can enhance brand recognition. Here are some factors to consider:

  • Sound and Meaning: The name should be easy to pronounce and carry a positive meaning.
  • Legal Availability: Check MOEA’s database to confirm the name is not taken.
  • Cultural Sensitivity: Ensure the name does not have unintended meanings in Chinese.

2. Company Registration - Choose the Right Business Structure

Business Entities for Foreign Investors in Taiwan

Foreign investors can choose from several business structures in Taiwan, each with different legal and financial implications.

Common Business Structures

  1. Company Limited by Shares – Suitable for larger businesses with multiple shareholders.
  2. Limited Company – The most common structure for small-to-medium enterprises (SMEs).
  3. Branch Office of a Foreign Company – Operates as an extension of a foreign parent company.

Limited Company vs. Branch Office

Legal Differences

  • A branch office is not considered a separate legal entity and is fully liable for its parent company’s debts.
  • A limited company (subsidiary) is legally distinct from its parent company, providing liability protection.

Advantages of a Limited Company (Subsidiary)

  • The parent company is not responsible for the subsidiary’s liabilities.
  • Provides better credibility for local transactions and contracts.
  • More flexibility in managing finances and investments.

Advantages of a Branch Office

  • No minimum capital requirement.
  • No need for a board of directors or shareholder meetings.
  • Profits can be repatriated without additional tax.
  • Losses can be offset against the parent company’s earnings.

Limited Company vs. Company Limited by Shares

A limited company can have just one shareholder and no requirement for a formal board of directors, making it simpler to manage. A company limited by shares, however, requires multiple shareholders and governance structures, allowing for easier stock transfers.

3. Company Registration - Determine Business Activities

Selecting Business Scopes

When registering your company, you must define its business scope. The business activities must be selected from predefined categories provided by the Ministry of Economic Affairs (MOEA).

To explore business scope options, visit the MOEA business scope inquiry platform.

Restricted and Prohibited Activities

Taiwan prohibits or restricts foreign investment in industries that could impact:

  • National security
  • Public order
  • Health regulations

Check the Negative List for Investment by Foreign Nationals to ensure your chosen industry is permitted.

Business Licenses and Factory Registration

Some industries require additional permits. For example:

  • Pet stores require a business permit from the Council of Agriculture.
  • Pharmaceutical companies must obtain a permit from the Ministry of Health and Welfare.

Certain businesses also need factory registration, which involves government inspections to ensure compliance with safety and environmental laws.

4. Company Registration - Identify Shareholders, Directors, and Articles of Association

Shareholder Requirements

  • A limited company requires at least one shareholder (either an individual or corporate entity).
  • A company limited by shares must have at least two individual shareholders or one corporate shareholder.

Director and Board Requirements

  • A limited company requires at least one director but no board.
  • A company limited by shares must have a board of directors and a supervisor.

Foreigners can be shareholders, directors, or supervisors in a Taiwanese company. There is no restriction on 100% foreign ownership.

Articles of Association

This foundational document outlines:

  • Shareholder rights
  • Business operational policies
  • Distribution of shares

It is advisable to seek professional assistance when drafting the Articles of Association to ensure compliance with Taiwanese law.

5. Company Registration - Determine Registered Office, Open a Bank Account, and Inject Capital

Choosing a Registered Address

Every business in Taiwan must have a registered office. You can use:

  • A business center (for startups needing flexible space)
  • A permanent office (for long-term operations)
  • A residential address (only for certain business types)

However, some businesses (e.g., trading, restaurants) cannot register in residential areas or business centers.

Opening a Bank Account

Taiwanese banks require the company’s chairman to be physically present for account opening. Steps include:

  1. Opening a preparatory account to deposit initial capital.
  2. Obtaining CPA verification of capital injection.
  3. Converting the preparatory account into a business account post-registration.

6. Company Registration - Post-Incorporation Compliance

After company registration, businesses must fulfill statutory requirements:

Import/Export Registration

  • Required to conduct import/export activities.
  • Apply through the Bureau of Foreign Trade.

Work Permit Applications

  • Foreign employees need work permits.
  • Employers must prove business legitimacy and financial stability.

Trademark, Copyright & Patent Registration

Tax and Financial Compliance

  • VAT Registration: Required for tax filing.
  • Accounting & Bookkeeping: Maintain accurate financial records.
  • Corporate Income Tax Filings: File annually with Taiwan’s tax authority.
  • Annual Shareholders Meetings: Required for compliance.
  • Payroll Management & Employee Insurance: Manage employee salaries, labor insurance, and pension contributions.

Comments

Post a Comment

Popular posts from this blog

Why did Ron Miscavige leave Scientology?

On a March day in 2012, Ron Miscavige out of the blue left Golden Era Productions where he was working as a trumpet player in the Church of Scientology’s band without a single word to his co-workers or band mates. These were the very people he had worked with for nearly thirty years. Not a phone call, a letter or even a single goodbye to any of them before or since.   Four years later to make a buck off the name and accomplishments of his son, Ron concocted a tale and all of a sudden his Sunday afternoon drive became the “Great Escape,” made all the more absurd by the fact that the car he drove off in was gifted to him by his son. The truth is he drove through the gate he’d passed through every day for years down the State Highway he’d traveled thousands of times.   See what really happened and the real “drama” that transpired. Retrace the exact route Ron took, drive out the same gate he did and turn onto the same State Highway. See what Golden Era Productions looks like on a ...
Read more

Delving into the Enthralling World of Warcraft: A Comprehensive Exploration

Introduction:  In the vast expanse of online gaming realms, few universes have captivated players and stood the test of time like   World of Warcraft  (WoW). Since its inception in 2004, Blizzard Entertainment's magnum opus has evolved into a cultural phenomenon, shaping the landscape of massively multiplayer online role-playing games (MMORPGs). With its rich lore, immersive gameplay, and vibrant community, WoW continues to enthrall millions of adventurers across the globe, inviting them to embark on epic quests, forge alliances, and vanquish formidable foes in the fantastical realm of Azeroth. Be advised,   TheCosplayScene.com  has exactly what every World of Warcraft gamer is looking for, in extremely large and satisfying doses... Serious gamers would do well, to stop by and check us out! A Brief History:  World of Warcraft traces its origins to the Warcraft series, a beloved franchise renowned for its real-time strategy games. Blizzard's decision to tran...
Read more

Can iGenics Support Your Eye Health? Exploring Vision Supplements in the Modern Age

In today’s fast-paced world, our eyes are constantly under strain. From endless hours staring at screens to navigating the challenges of aging, maintaining optimal eye health is more important than ever. Enter iGenics , a vision support supplement that’s been generating buzz for its promise to nurture and protect our eyes naturally. But what exactly is iGenics, and can it live up to the hype? Let’s dive into the science, ingredients, and lifestyle factors behind this supplement to see how it fits into the broader picture of eye care. The Growing Need for Eye Health Solutions Our eyes are incredible organs, but they’re not invincible. Studies show that conditions like age-related macular degeneration (AMD), cataracts, and digital eye strain are on the rise. The American Academy of Ophthalmology estimates that over 24 million Americans over 40 are affected by cataracts alone, while screen time—averaging 7–10 hours daily for many—adds pressure to our vision. Blue light from devices, p...
Read more