Frequently Asked Questions for Investing in Taiwan
Q 1. What is the minimum capital amount when foreigners would like to invest in Taiwan?
Generally speaking, establishing a company in Taiwan requires at least NTD 500,000 (approximately USD 17,000). For a foreigner who applies for Taiwanese work permit in front of the Ministry of Labor, he must invest more than 1/3 of the capital amount. Absent the work permit, the foreign investor will not be able to apply for Alien Resident Certificate ("ARC").
Q 2. What is the first step foreigners have to take for investing in Taiwan?
Like the company set up process in other countries, foreigners have to figure out some company names and check whether the company names can be used in Taiwan. The problem is that you have to give your company a name in Chinese, not in English or any other language. But do not worry about it. We can assist you to come up with some suitable Chinese names for your company doing business in Taiwan. Also, we can assist you to give yourself a Chinese name for making a seal, which will be required for doing business in Taiwan.
Q 3. What is the most important requirement for foreigners to invest in Taiwan?
The most important requirement is to obtain permission of Department of Investment Review, Ministry of Economic Affairs. Foreign investors will have to submit investment application with relevant investment plan, ID such as passport, and designated documents.
Q 4. How long does it take to finish the whole company set up process?
Usually it takes around 1.5 months to 2 months to complete if all the required documents are prepared well. As to obtaining permission from Department of Investment Review, it just needs a couple of days to get it if all the required documents are duly submitted. However, when the investment plan structure is more complicated, you will have to expect longer processing time. In addition, when there are more foreign investment cases being handled by Department of Investment Review, you are supposed to expect a delay for the permission to be issued.
Q 5. Will the foreign investor be required to come to Taiwan for establishing a company?
Unfortunately, yes, regardless of whether agents, lawyers, or accountants are fully authorized to assist you for the whole company set up process. First, the prospective legal representative of the Taiwanese company must come to Taiwan for opening a bank account after Department of Investment Review issues its permission. Due to the strict anti-money laundering laws in Taiwan, no banks will allow agents, lawyers, or accountants to open a bank account for you. Secondly, the prospective legal representative of the Taiwanese company is required to appear personally in front of the Taxation Bureau. Fortunately, this rule has been loosened to a certain extent so that foreign company designating a foreigner to be its legal representative of the Taiwan subsidiary may be exempted from personal appearance.
Q 6. Will the foreign investors be required to have Taiwanese shareholders for setting up the Taiwanese company?
No. Taiwanese shareholders are not required when the foreign investors are investing in Taiwan. This is a very friendly rule.
Q 7. Will the foreign investors need a physical office in Taiwan for setting up a Taiwanese company?
Generally speaking, the answer is yes. However, you can rent an office with a legal address at a very low cost, similar to a virtual office, from some business centers.
Q 8. Since Taiwan has not signed social security agreements with other countries, will a foreign investor who act as a company's legal representative be required to pay mandatory social securities for himself?
There are three kinds of compulsory social security systems under Taiwanese laws.
- Mandatory Labor Insurance: When a foreign investor obtains a work permit for working in Taiwan, he may voluntarily join the Labor Insurance program but it is not a requirement for the employer.
- Mandatory Health Insurance: Only when the foreigner obtains ARC will be required to join the Mandatory Health Insurance program. When a foreign investor fails to apply for the ARC, he will not be required to join this program.
- Mandatory Labor Pension: Only Taiwanese citizen who also works as an employee may enjoy the labor pension. Thus, a foreign investor who acts as company's representative will not be required to join this pension program.
Hung Ou Yang, Esq., Managing Partner of Brain Trust International Law Firm, specializes in transnational legal disputes, international trade, business and white collar crime, and antitrust. Hung Ou Yang has successfully resolved many high-profile civil, criminal, and transnational disputes, including but not limited to representing Simpolo, Icon, and other Indian tiles companies in an anti-dumping investigation regarding ceramic tiles, advising PharmaEngine to deal with its commercial dispute regarding a merger with a French company, representing Indo Kordsa for its corporate internal investigation which led to exposing a biggest bank fraud case in Taiwan history.