Foreign Setup (General)

A: Yes. Foreign individuals and foreign entities may apply for approval from the Investment Commission and then set up a Taiwan company, branch, or representative office. Some industries are restricted. Investor status is generally classified as Foreign, HK/Macau, or Mainland China (PRC) depending on nationality/background and applicable rules.

• Foreign: A non-ROC national excluding HK/Macau persons. Please also note the relevant rules under the Enforcement Rules of the Act Governing Relations between the People of the Taiwan Area and the Mainland Area (Article 7). (Governing law: Statute for Investment by Foreign Nationals)
• Hong Kong (HK) : A person who holds Hong Kong permanent residency and does not hold any travel document other than a BNO passport or a Hong Kong passport. (Governing law: Act Governing Relations with Hong Kong and Macau)
• Macau (MO): A person with Macau permanent residency, and not holding travel documents other than a Macau passport; or holding a Portuguese passport only if Macau status was obtained at a specific historical point (before the end of Portuguese administration). (Governing law: Act Governing Relations with Hong Kong and Macau)
• PRC (Mainland China): A person with Mainland China household registration, and subject to the same Article 7 considerations above. Persons with certain party/government/military backgrounds are prohibited. (Governing law: Measures Governing Investment Permits to the People of the Mainland Area)

The Look-through Principle：This is the most critical part of the review. If PRC individuals or entities directly or indirectly hold more than 30% of a third-area company’s shares, or possess control, the investment is classified as "PRC Capital."

Foreign: An entity established/registered outside the ROC, and not falling under Article 3(2) of the PRC investment permit measures. (Governing law: Statute for Investment by Foreign Nationals)
HK/Macau: An entity organized/registered under Hong Kong or Macau law, and not falling under Article 3(2) of the PRC investment permit measures. (Governing law: Act Governing Relations with Hong Kong and Macau)
PRC (Mainland China): An entity organized/registered under PRC law, or falling under Article 3(2) of the PRC investment permit measures. Persons/entities with certain party/government/military backgrounds are prohibited. (Governing law: Measures Governing Investment Permits to the People of the Mainland Area)

An entity will be classified as "PRC Capital" if it meets either of the following criteria :
1. PRC Shareholding Ratio : PRC individuals, entities, or institutions directly or indirectly hold more than 30% of the entity's total shares or capital.
2. Control Power : PRC individuals, entities, or institutions possess the power to control the entity (e.g., serving as Chairman, holding more than half of the board seats, or dominating business and operational decisions).

Legal / Regulatory Aspect : Under the current Company Act, there is generally no statutory minimum capital requirement for company incorporation, except in specially licensed or regulated industries.
Practical Considerations : In practice, the Department of Investment Review (DIR) will assess whether the proposed capital is sufficient to support the company’s initial operations. It is advisable to inject sufficient capital to cover at least 6 to 12 months of start-up and operating expenses. As a general reference, a minimum of NTD 500,000 is often recommended. The capital contribution must be verified by a CPA.

Under the Statute for Investment by Foreign Nationals and the negative list (prohibited/restricted industries), the main categories are:
1. Prohibited Industries : Businesses that may adversely affect national security, public order, public morals, public health, or are expressly prohibited by law (for example, those involving national defense secrets).
2. Restricted Industries : Businesses in which foreign investment is subject to shareholding limits or specific regulatory approvals due to public interest or domestic industrial policy considerations (for example, agriculture, forestry, fishery, animal husbandry, and mass media).

Yes, potentially. While foreign investment generally follows the foreign investment statute, if the offshore company is a PRC third-area company (PRC ownership >30% or with control), it may be treated as PRC capital and be subject to the PRC investment permit regime, with stricter restrictions and review.

Yes. The Chinese name must indicate the country of origin, e.g., “American Company ○○○ Co., Ltd., Taiwan Branch” or “Japanese Company … Taiwan Branch.”

• A Taiwan company (Limited Company or Company Limited by Shares)
• A branch office (an extension of the foreign parent company)
• A representative office (for liaison only; no revenue-generating activities)

Legal Status :
1. Subsidiary: A separate legal entity incorporated in Taiwan and responsible for its own liabilities, profits, and losses.
2. Branch: Not a separate legal entity; it is treated as an extension of the foreign head office, which remains fully liable for the branch’s obligations in Taiwan.

Tax Differences:
1. Subsidiary: When profits are distributed to foreign shareholders, Taiwan withholding tax on dividends generally applies (commonly 21%).
2. Branch: Profit remittance to the foreign head office generally does not trigger dividend withholding tax.

No. A representative office may not engage in any revenue-generating or profit-seeking activities. Its activities are generally limited to non-commercial liaison, coordination, and preparatory functions that do not generate income, such as market research, information gathering, and communication with the head office or business partners.

A representative office should not carry out activities such as:
• signing contracts in its own name
• issuing quotations or negotiating prices
• participating in bids or tenders as an operating entity
• conducting procurement or purchasing transactions for business operations
• providing services or otherwise engaging in transactions that generate revenue

Consider a representative office first. If you later need actual operations, you can convert to a branch or company for more flexibility.

The main process generally consists of :
Name Reservation → Investment Approval from the DIR → Inward Remittance and CPA Capital Verification → Capital Approval → Company Registration → Tax Registration
If documents are complete and no special review applies, the full process from name check to getting the Unified Business Number (UBN) usually takes about 1 to 1.5 months.

Not all foreign documents need to be legalized. Among the foreign documents, only the Power of Attorney (POA) appointing the investment agent is generally required to be legalized. The investor must have the Power of Attorney for the Investment Agent legalized by a Taiwan overseas mission (TECO / Embassy). However, if the authorized signatory is currently residing in Taiwan, the document may instead be notarized by a Taiwan court or a private notary public in accordance with the Notary Act.

In most cases, yes. The responsible person is generally required to visit Taiwan in person to open a bank account after investment approval and to attend the tax interview with the National Taxation Bureau. Other matters may usually be handled by an authorized agent within the scope of the Power of Attorney.

Please refer to the attachment for details.

1. Use the approval letter to open a preparatory account at a bank.
2. Remit funds from overseas; specify remittance purpose code “310” (foreign equity investment).
3. For FX conversion to NTD, present the original approval letter to the bank.
4. Engage a CPA to perform capital verification/attestation.
5. Submit the CPA report to apply for investment amount recognition.
6. After recognition is issued, the funds are officially treated as capital for operations.

After the company is incorporated, it must complete tax registration with the National Taxation Bureau, set up its e-invoicing system, and enroll in Labor Insurance and National Health Insurance if employees are hired.

1. Value-Added Tax (VAT) : Generally 5%, with a 0% rate applicable in certain cases.
2. Corporate Income Tax : 20%.
3. Withholding Tax on Dividends / Profit Remittance : Generally 21% for dividends paid to non-resident shareholders; not applicable to Taiwan branches.
4. Undistributed Earnings Tax : 5%; not applicable to Taiwan branches.

Yes
Standard : Dividends to non-resident shareholders are generally subject to withholding (commonly 21%).
Tax treaty : If the investor’s jurisdiction has a tax treaty with Taiwan and conditions are met (e.g., minimum shareholding, beneficial ownership), the investor may apply for a reduced treaty rate (e.g., 10% or 15%). Application must be filed before distribution and approved by the tax authority.

A representative office cannot issue invoices and generally has no VAT/CIT obligations in Taiwan. However, expenses paid (rent, payroll) require proper withholding handling depending on whether costs are paid by the head office or in Taiwan.

• Profit Remittance : Once the company’s financial statements have been audited by a CPA and the shareholders have resolved to distribute profits, the company may apply through a bank for foreign exchange settlement and remittance by submitting the required supporting documents. Prior approval from the Department of Investment Review (DIR) is generally not required.
• Capital repatriation (capital reduction / divestment) : Prior approval from the Investment Commission is required. After approval and CPA verification, remit via bank.

Yes. If the branch maintains independent accounting records and its financial statements are audited by a CPA, it may carry forward losses for up to 10 years to offset future taxable profits.

Yes. The remitter must be the head office and the beneficiary must be the Taiwan branch.

Yes. Significant equity transfers and changes to directors or legal representatives generally require a filing or approval from the Department of Investment Review (DIR). Changes to managers, such as the general manager, depend on whether the change affects representative authority and on the company’s Articles of Incorporation.

The process generally involves liquidation and tax clearance in accordance with the Company Act, return of any remaining capital to the shareholders, and an application for divestment approval or deregistration with the Department of Investment Review (DIR). Branches and representative offices are also subject to the corresponding deregistration procedures.

After the company is established, it must apply to the Ministry of Labor as the employer in order to hire foreign professionals.
Key requirements generally include :
1. Company eligibility : For example, a newly established company will generally need paid-in capital of at least NTD 5 million.
2. Candidate qualifications : The foreign executive must satisfy the applicable education, experience, and salary requirements.

After the work permit is issued, the foreign executive may apply for an ARC and residence with the National Immigration Agency.