Establish a Subsidiary in Taiwan

Our company formation consultants can provide assistance related to setting up a subsidiary in Taiwan.

What is the registration procedure for a subsidiary in Taiwan?

If you think about establishing a subsidiary in Taiwan, you must follow the next steps:

• reserve the company name and business scope;
• obtain any special approval required for the intended business activity, if applicable;
• apply for foreign investment approval with the Department of Investment Review under the Ministry of Economic Affairs (MOEA);
• transfer the investment capital to Taiwan;
• register the subsidiary.

The procedure may vary depending on the business sector, investment structure and location of the subsidiary.

Our company formation representatives in Taiwan can provide all the necessary information related to the the registration procedure for a subsidiary here.

What documents are needed to set up a subsidiary in Taiwan?

The documents needed to set up a subsidiary in Taiwan are:

• an application form;
• an approval letter for other organizations;
• an application form for the business name verification;
• documents of the corporate organizations;
• copy of the business regulations;
• official meeting minutes of the shareholders or of the board of directors, in which it is required to receive permission to set up a business in Taiwan;
• the notification letter for inward remittance and remittance purchase slips for working capital in Taiwan;
• the power of attorney which designates the representative of the subsidiary in Taiwan;
• the power of attorney from the subsidiary manager;
• other documents: our company registration agents in Taiwan can present all the relevant details related to these other documents.

How long does it take to establish a subsidiary in Taiwan?

The entire process generally takes several weeks, especially when document authentication, capital remittance and other registration formalities are required. Our local agents can help you avoid delays caused by incomplete documentation.

What types of companies can be incorporated as subsidiaries in Taiwan?

A foreign company can establish a subsidiary in Taiwan by incorporating either a limited company or a company limited by shares, following Taiwanese company law.

The subsidiary will operate as a separate legal entity from the parent company, which can have various advantages, such as limiting liability, separating financial records, and facilitating local business operations. Our specialists in company formation in Taiwan can offer you more details about the types of companies that can be incorporated as subsidiaries.

What is a limited company?

A limited company is a popular type of business structure that can be established as a subsidiary in Taiwan and has the following characteristics:

• shareholders are only liable for the amount of capital they invest in the company;
• it is suitable for small to medium-sized investors who contribute a significant amount of capital to start the business;
• at least one shareholder (an individual or a legal entity) is required to incorporate a limited company;
• shareholders need the consent of a majority of the other shareholders' votes before transferring their capital contribution (two-thirds for a director).

What is a company limited by shares?

The company limited by shares can also be established as a subsidiary in Taiwan and is distinguished from a limited company by the following:

• shareholders’ liability is also limited to the capital they invest in the company;
• the company must have a legal person status;
• when shareholders transfer their shares, they are subject to a security transaction tax of 0.3%;
• unlike a limited company, shareholders may have multiple voting rights based on their shareholding pattern.

Ultimately, deciding which is the best structure for opening a subsidiary in Taiwan depends on your business goals and ownership structure. You can discuss further details with our Taiwan company formation specialists for guidance.

What registrations are required after incorporating a subsidiary in Taiwan?

After incorporation, a subsidiary in Taiwan must complete its tax registration with the competent tax authority before starting business operations.

Depending on the activity of the company, you may also need to:

• obtain specific permits or licenses for regulated business activities;
• register as an importer or exporter, if the company conducts international trade;
• complete factory registration, if you manufacture or process goods;
• enroll as an employer for Labor Insurance and National Health Insurance (if you hire employees).

Our company formation consultants in Taiwan can identify the registrations that apply to the subsidiary and assist with the post-incorporation formalities.

What are the taxes on subsidiaries in Taiwan?

Before you establish a subsidiary in Taiwan, it is important to know the taxes that will apply to your company.

All subsidiaries in Taiwan are subject to corporate income tax on the revenue generated from their operations in Taiwan. The tax rate is 20%. Please note that resident companies with a taxable income of less than TWD 120,000 are exempt from paying taxes.

When a Taiwan subsidiary distributes dividends to its foreign parent company, withholding tax may apply. The standard domestic withholding tax rate on dividends paid to a foreign corporate shareholder is 21%, although a lower rate may apply under an applicable tax agreement.

If a company does not distribute its profits to shareholders it may have to pay an extra 5% tax on those retained profits. Qualifying substantial investments made within the period allowed by law may, however, be deducted when calculating undistributed earnings.

A Taiwan subsidiary may also have to pay business tax. For most taxable sales, the standard business tax rate is 5%.

We can provide more details regarding taxes and company registration in Taiwan.

Can a subsidiary be incorporated without travelling to Taiwan?

In many cases, yes. You have to appoint an agent residing in Taiwan to submit the foreign investment application on your behalf. You will need a power of attorney for this operation. An authorized lawyer or CPA may also fill the company registration application.

It is important to know that certain steps, particularly those related to opening a bank account or completing bank-specific procedures may require the presence of a company representative, depending on the bank’s internal requirements.

Our company formation consultants in Taiwan can handle the incorporation formalities locally and advise whether any stage of the procedure requires the investor or company representative to travel to Taiwan.

If you would like to know more about how to establish a subsidiary in Taiwan, contact us!