Establishing a Company in Taiwan

Taiwan is an island nation, situated to the southeast of China. To its south, you will find the islands of the Philippines and, to the northeast, Japan and Korea. The country's capital is Taipei, which sits in the northern part of the central island. Taiwan's population is roughly 23 million residents, it's official language is Mandarin Chinese and the country's official currency is the Taiwanese Dollar (officially the "New Taiwan Dollar"). Taiwan is also known as "The Republic of China", not to be confused with "The People's Republic of China" (PRC), which refers, of course, to Taiwan's larger and stronger neighbor, China.  

Establishing a company in Taiwan grants access to the Asian market in general and to the Chinese market in particular, without the requirement of having to register a company in China itself.

Taiwan is not an ordinary jurisdictional zone. On the one hand, Taiwan is a sovereign country in almost all aspects, however, in practice, it is not internationally recognized as an independent country, as China opposes its independence. In light of this resistance, many countries are wary of clashing with China, thus preferring to refrain from formally recognizing Taiwan as an independent country. With that said, many countries actively maintain diplomatic and commercial ties with Taiwan, as if it was its own separate, independent nation. The current situation is a form of status quo, agreed to by the various parties: while Taiwan does not declare full independence, in actuality, it acts, in many aspects of its governance, as if it has made such a declaration, save for its status within the United Nations and other international bodies. As a means of pressuring Taiwan and maintaining the status quo, China upholds its threat to attack the island nation, if Taiwan were to choose to declare independence.

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Three things you did not know about Taiwan

  • Prior to China opening its gates to the western world and the manufacturing revolution we are witnessing today, the term "Made in Taiwan" was equivalent to the present day "Made in China". Taiwan supported internal production and massive international export of a wide variety of goods, including toys, electronics, clothing and much more. Present day production in Taiwan is still substantial, but does not compare to the astronomical scope of manufacturing taking place within the borders of its colossal neighbor, China.

  • Keeping with the many eccentricities of East Asia, Taiwan is home to a restaurant whose central theme is bathrooms. In the restaurant, meals are served on dishes shaped like miniature water closets.

  • It’s common knowledge that Taiwan is situated in a tropical geographical region subject to heavy rains. Surprisingly and quite amusingly, according to local tradition in Taiwan, it’s not considered appropriate to walk outside in the rain, even if only for a few seconds. Evidently, this custom is rooted in a fear of pollution that mixes with the precipitation, turning it into acid rain that, according to the native population, can cause them harm.

The Taiwanese Economy

Taiwan’s economy is recognized as a capitalistic, dynamic and competitive market with open, transparent government involvement. This is in stark contrast to the tremendous Chinese economy, which is under tight governmental supervision. Taiwan’s prominent export products include electronics, machines, metals, petrochemicals and textiles.  

The local economy is heavily biased towards export, a fact that exposes Taiwan to global economic risks, making the country greatly dependent on worldwide consumption.

Taiwan’s populace is considered to constitute a very high-quality workforce, well-educated and possessing an especially strong work ethic. The local economy includes a large sector of small to medium sized businesses, differing from the mega-corporations of Japan, South Korea and China.

Despite the political tension between the countries, the PRC is Taiwan’s primary and most important partner to commerce.

Taiwan’s financial services sector is highly developed, offering excellent and accessible infrastructure for entrepreneurs operating the field. Taiwan’s geographic and strategic proximity to financial centers, such as Hong Kong, Tokyo and Shanghai, coupled with substantially low cost of wages, as compared to these locations, provides a strong incentive for entrepreneurs to establish operations in Taiwan.

Mellius’ clientele benefit from our sprawling network of relationships in Asia, in general, and in Taiwan, in particular. These ties, together with a close familiarity with the local business and legal environments, allow Mellius to offer its clients a range of solutions for establishing companies in Taiwan in a way that will best meet their business needs in Taiwan.  

Additional information about establishing offshore companies in Taiwan:

General
Type of company
Limited Liability Company (LLC)
Relevant Companies Law
Taiwan Companies Act
Offices
Businesses are required to provide the authorities with the address of a local office.
Language of original incorporation documents
English and Chinese
Finance and Taxation
Currency
New Taiwan Dollar (TWD)
Corporate tax rate
20%
Standard share capital
No minimal requirement (unless the company is active in a business / industry required by a certified authority to hold a minimal amount of capital, or if the company employs a foreign national who needs to be employed by the Taiwanese company).
Office Holders
Secretary
Obligation to appoint company secretary
Not required
Obligation to appoint local secretary
Not required
Type of entity that may function as company secretary
Irrelevant
Director
Obligation to appoint company director
Required
Obligation to appoint local company director
Not required
Minimum number of directors
1
Type of entity that may serve as company director
Individual and/or company
Shareholders
Obligation to register shareholders
Required
Obligation to register local shareholders
Not required
Minimum number of shareholders
1
Type of entity that may register as shareholder
Individual and/or company
Type of shares
Registered shares and / or bearer shares
Accessibility of Information
Company registrar
Information regarding office holders accessible to the public
Annual Assembly and Reporting
Obligation to hold annual assembly
Not required
Obligation to prepare financial reports
Required
Obligation to submit financial reports
Required