Taiwan company incorporation has grown in popularity in recent years, primarily due to the country’s geographic advantages, business-friendly policies and stable business environment. The country is now seen as a strategic location to help foreign businesses enter into emerging Asian markets. In this article, we look to provide guidance on the requirements surrounding Taiwan companies, what the incorporation process is like, and what you must take into consideration upon successful incorporation.
What You Will Learn:
1. The Taiwan company requirements
2. What the Taiwan company incorporation process is
1. Taiwan Company Requirements
A Taiwan limited company is the most common company type utilized by SMEs due to the relatively relaxed corporate requirements. Limited companies are most suited to subject to the following requirements:
- Maintain a minimum of one (1) company director, who can be a natural person or corporate body
- Maintain a minimum of one (1) shareholder, who can be a natural person or corporate body
- Maintain a local registered office address in Taiwan
- Appoint one (1) investment agent who must be a Taiwan resident
Unlike many other countries, there are no nationality or residency requirements surrounding who is eligible to be a Taiwan company’s company director or shareholder.
Taiwan companies that are limited by shares are also a popular company type commonly incorporated. However, this company type is typically utilized by large corporations who intend to publicly list themselves on a stock exchange.
Unlike Taiwan limited companies, a Taiwan company limited by shares is required to appoint at least one individual to act in the role of Supervisor. Furthermore, companies limited by shares are required to have at least one (1) corporate shareholder or two (2) individual shareholders, and must also have at least three (3) company directors. Lastly, all Taiwan company types are not subject to minimum capital requirements.
2. Taiwan Company Incorporation Process
The Taiwan company incorporation process can be broken down into two distinct steps – the preliminary stage where a company prepares all necessary application documents and pre-requisite requirements for incorporation purposes, and the application for registration stage.
Before an applicant submits their application for registration with the Taiwan Ministry of Economic Affairs (“MOEA”), they must meet and have made the following pre-requisites and decisions:
Lease of Office Space
Taiwan companies are required to maintain a local registered office address. Companies operating in Taiwan must have their registered office address be located in a commercial building or a residential building that has been approved to facilitate commercial activities. A tenancy agreement in relation to the use of this space must be acquired before the application for registration.
Appointment of Director(s)
The Taiwan company must decide which individuals will be appointed as their company director(s). The applicant should then prepare a written statement confirming the company director(s) acceptance of this position and their formal appointment.
Legalisation of Documents
The identity documents of the Taiwan company’s shareholders and directors must be legalised before submission of the application for registration. If another company will act as the Taiwan company’s parent company, then documents ranging from Certificate of Incorporation to Articles of Incorporation and By-laws must be legalised.
Regardless of whether another company or individuals will hold the position of shareholders or company director, all identity documents must be legalised in the local Taiwan embassy where the individuals reside, or where the parent company is registered.
If a Taiwan company is being incorporated by foreigners who are abroad, then they must arrange to have a local Taiwan agent act on their behalf to assist in completing the Taiwan company incorporation process. A Power-of-Attorney must be prepared to validate this relationship, which must also be legalised by a local Taiwan embassy.
Application for Registration
Once an applicant has prepared all the preliminary steps they may begin the formal process of submitting their Taiwan company application for registration. The process involves the following steps:
Company Name Search and Reservation
Companies that are incorporated in Taiwan must have a Chinese name – English names are optional. In addition, Taiwan company names are not allowed to be similar to, or identical to an existing company. Furthermore, they cannot use a name that can potentially mislead the public, associate itself with a government agency or public welfare organisation, or can be interpreted as intending to disturb public order.
Upon deciding on a company name, the registration process begins with performing a name availability search with the MOEA. Upon confirmation that a desired name is available, a reservation can be made for the use of the name.
Submission of Application for Registration
Once a company name has been successfully reserved, a formal application for registration can be submitted to the MOEA, along with all supporting documentation.
The MOEA will typically respond with a verdict within 10 working days upon the receipt and review of all documentation. If an application is a success, the MOEA will issue an approval letter.
However, the MOEA will, as required, ask the applicant for supporting documentation or to clarify certain aspects of the application if there is a lack of clarity on the particulars of the company’s proposed business operations.
Bank Account Opening
Once an approval letter has been received from the MOEA, the applicant can open a bank account in the name of the company’s preparatory office for the purpose of receiving the company’s capital.
After the initial capital injection has been made to the company’s bank account, the company should maintain documents evidencing the validity of these transactions. This is because the company will be required to provide this documentation to the MOEA for verification, after which, the Taiwan company can be considered to be fully incorporated.
3. Other Considerations
After successful incorporation, companies limited by shares must go through an annual audit, to be conducted by a local CPA, if they have capital over NTD30 million, or exceeds NTD100 million in sales.
A limited company must have its annual financial statements audited by a local CPA if they have capital contributions of over NTD30 million.
All Taiwan incorporated companies must file annual tax returns.
Annual Corporate Maintenance Requirements
While limited companies are not required to conduct annual board meetings or shareholders’ meetings, companies limited by shares are required to do so.
While company incorporation can seem like a complicated process, especially for foreigners who have no prior experience in their selected country, the actual exercise does not need to be. For those who feel overwhelmed about the Taiwan company incorporation process and don’t know where to begin, please contact the FastLane Group for assistance!