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Taiwan Company
Set up foreign investment office in Taiwan
Set up foreign investment office in Taiwan
I.Introduction and Functions of Foreign Investment Office in Taiwan
- Foreign-funded enterprises come to Taiwan to set up companies, in addition to setting up subsidiary and branch, they can also set up the office. For foreign companies to set up an office in Taiwan, the law is Article 386 of the Company Law. The legal action taken by the office in Taiwan is to “report” to the Ministry of Economic Affairs and cannot conduct business activities. If a foreign company does not intend to set up a branch in Taiwan for business, they can apply for Office registration.
The scope of its business activities is limited to contract signing, quotation, negotiation, bidding, procurement, market research, and research activities in Taiwan. - The office establishment in Taiwan can be divided into overseas Chinese and foreign investment offices according to the type of parent company. Generally, overseas Chinese and foreign investment offices do not have special requirements for the parent company. However, if a Chinese company applies to establish an office in Taiwan, except those special regulations that meet; its parent company shall meet the following regulations:
- Established for more than three years.
- The minimum paid-in capital is equivalent to more than NT$6 million.
- The company’s business must meet at least one project that meets the requirements of Chinese people’s investment in Taiwan before applying.
- Foreign-funded enterprises come to Taiwan to set up companies, in addition to setting up subsidiary and branch, they can also set up the office.
- For foreign companies to set up an office in Taiwan, the law is Article 386 of the Company Law. The legal action taken by the office in Taiwan is to “report” to the Ministry of Economic Affairs and cannot conduct business activities. If a foreign company does not intend to set up a branch in Taiwan for business, they can apply for Office registration.
- The office establishment in Taiwan can be divided into overseas Chinese and foreign investment offices according to the type of parent company. Generally, overseas Chinese and foreign investment offices do not have special requirements for the parent company. However, if a Chinese company applies to establish an office in Taiwan, except those special regulations that meet; its parent company shall meet the following regulations:
- 1.Established for more than three years.
- 2.The minimum paid-in capital is equivalent to more than NT$6 million.
- 3.The company’s business must meet at least one project that meets the requirements of Chinese people’s investment in Taiwan before applying.
II.What tax burden does the office have?
- In addition to local market development factors for foreign investment in setting up business offices, “tax” should also be a key consideration. Since the office cannot engage in business activities, only expenses and no income, naturally there is no taxation problem. A liaison office established by a foreign-funded profit-making enterprise in my country to handle the procurement business for its head office may be exempted from business registration if it has no external business.
- Purchasing expenses remitted by its foreign headquarters are not within the scope of the business tax levy and are exempt from profit-making business income tax.
III.The procedure of setting up an office in Taiwan
1.Company name pre-check:
Confirm whether the company name has been registered in advance.
2.Verification of documents from the parent company:
Before establishing a branch office in Taiwan, the parent company needs to prepare documents that require verification to ensure their authenticity and legality.
3. Recognition of the parent company and filing of the branch office:
After completing the document verification, the parent company needs to officially approve the establishment of the branch office in Taiwan and file relevant information with the appropriate authorities.
4.Review and approval:
The reviewing authority will review the application and related documents, and conduct an on-site inspection. Upon approval, the establishment permit certificate will be issued.
5.Opening a bank account:
After registering the branch office, the parent company needs to open a bank account with a local bank for handling fund transactions and tax reporting, among other matters.
6.Certificate application:
After opening a bank account, the branch office also needs to apply for relevant permits or certificates from local government agencies.
7.Other registration procedures:
Depending on the specific nature of the branch office’s business, other related registration procedures may be required, such as labor insurance, health insurance, business tax, etc.
IV.Documents Required for Registering a Foreign Investment Branch Office in Taiwan
1.Proof of Foreign Company’s Existence
A document demonstrating the establishment or registration of the foreign company, which should include information such as the company name, organizational structure, capital amount, etc.
2.Company Authorization Letter:
An authorization letter from the foreign company authorizing the registration of the branch office in Taiwan.
3.Identification Document of the Person in Charge of the Branch Office.
4.Application Form for Establishing the Branch Office, which should provide detailed information on the purpose of the company’s establishment, business scope, etc.
5.Lease Agreement for the Branch Office in Taiwan, which serves as one of the application documents.
6.Company Bylaws.
V.Notes for the operation of foreign offices Q&A
Q1: Can I apply for the office in Taiwan to hire employees to pay salaries?
A:The office is a cost center. The foreign head office can remit operating funds and use the operating funds to pay for office expenses/salaries.
Q2: What should the office pay attention to in taxation?
A:Please pay attention to the following things:
- Do not use the Chinese name of the office for legal actions. Legal actions must be presented in both Chinese and English.
- Do not use the Taiwan bank account of the office to charge Taiwan dollars, it may be considered as income and there will be under reporting problems.
Q3: Can the office do business?
A:No. You can just negotiate business development, after the negotiation is completed, the contract must be signed with the parent company, and the office cannot collect any payment or make any payment on behalf of the company.