| Business Type Items | Company | Business Enterprise |
|---|---|---|
| Minimum capital requirement | No minimum requirement, but the capital still needs to be examined and certified by a local CPA and covers at least the incorporation cost (Note 1) | Not required. |
| Extent of shareholders/responsible person/partners' liability | Shareholders are liable to the extent of their capital contribution to the company. | The responsible person or partners of the business are liable for any liabilities arising from the business operation. |
| Business expansion | A registered company name is approved by the Ministry of Economic Affairs. This name is legally protected and its usage is nationwide. It is advantageous for business expansion. | A registered business name is approved by a local (county or city) government. The name protection and usage are limited. |
| Qualification of being a juristic person | A company is qualified as a juristic person. | Not qualified as a juristic person. |
| Requirement for accounting books and vouchers. | Must keep complete set of accounting books and accounting records to document its operating results. | Not compulsorily required. The profit and loss is reflected directly in income individually reported by the responsible person or partners. |
Note 1: If the business entity engages in activities that require a special permit or approval, the authorities may set a higher capital requirement.
| Business Type Items | Company ( Company Limited by Shares/Limited Company ) | Branch Office of a Foreign Company | Representative Office |
|---|---|---|---|
| Permitted activities | General trading, sales and manufacturing | General trading, domestic sales and manufacturing | Legal acts and liaison activities |
| Profit-Seeking Enterprise Income Tax(T) | Starting from 2018, if the total taxable income of a profit-seeking enterprise is NT$120,000 or less, the profit-seeking enterprise is exempt from tax. If the total taxable income of a profit-seeking enterprise is more than NT$120,000, the income tax rate shall be 20%, but the income tax payable shall not exceed one half of the portion of taxable income more than NT$120,000. Where the total taxable income of a profit-seeking enterprise is more than NT$120,000 but not more than NT$500,000, the income tax rate for taxable year 2018 and taxable year 2019 shall be 18% and 19% respectively. However, the income tax payable shall not exceed one half of the portion of taxable income more than NT$120,000. | Same as a company | Not applicable |
| Profit remittance tax | Withholding tax of 21%; however, the 10% surtax paid by the company on its undistributed profits may be credited against the withholding tax. | None | Not applicable |
| Tax incentives under the Statute for Industrial Innovation | Applicable | Not applicable | Not applicable |
| Extent of the liability of a shareholder/head office | Shareholders are liable to the extent of their capital contribution to the company. | Foreign head office is liable for any liabilities unsettled by the branch. | Not applicable |
| Requirement for shareholder(s)/responsible person | Must have at least 1 corporate shareholder or 2 individual shareholders ( 1 or more individual or corporate shareholders in the case of a limited company ). All shareholders may be foreign nationals residing outside of Taiwan | Not required to have shareholders but required to register a responsible person | Not required |
| Requirement for director(s) | Must have at least 3 directors ( between 1 and 3 in the case of a limited company ). All directors can be foreign nationals residing outside of Taiwan. | Not required | Not required |
| Requirement for supervisor(s) | Must have at least 1 supervisor ( no requirement in the case of limited company ) who can be a foreign national residing outside of Taiwan. | Not required | Not required |
| Minimum capital requirement or minimum operating capital requirement | No minimum requirement, but the capital still needs to be examined and certified by a local CPA and covers at least the incorporation cost (Note 1) | No minimum requirement, but the capital still needs to be examined and certified by a local CPA and covers at least the incorporation cost (Note 1) | Not required |
| Sources of capital contribution | Capital contribution can be made in cash or thru capitalization of retained earnings or capital surplus. | Initial operating capital must be remitted in Taiwan from the offshore head office. Subsequent contribution of additional operating capital can be made through remittance from offshore head office or thru capitalization of the branch retained earnings. | Not applicable |
| Filing of annual income tax return | Required | Required | Not required |
| Withholding tax on salaries, rental income, professional fees, and other income payments. | Required | Required | Required |
| Allocation of administrative expenses by parent / head office | Subject to a 20% withholding tax. The deductibility of this allocation for tax reporting purposes will depend on the adequacy of the supporting documents thereon. | Normally not subject to 20% withholding tax and can be treated as a tax deductible item if certain criteria are met. | Not applicable |
| Keeping of accounting books and records | Required | Required | Required |
| Liquidation of the entity following completion of dissolution | Required | Required | Not Required |
| Purchase of real property and automobiles in the name of subsidiary / branch / representative | Permitted | Permitted | Not Permitted |
Note 1. If the business entity engages in activities that require a special permit or approval, the authorities may set a higher capital requirement
In keeping with the global trend and enhancing the competitiveness of business environment, the government has streamlined the cross-agency processes to provide convenient services to the public enable them to apply for incorporation and tax registration, Labor Insurance and National Health Insurance coverage, and register work rules via the “Company, Business and Partnership One-Stop Service Request” website.
The members of the public can use this one stop online application website to submit all the applications and check the status of their applications further throughout the data connection and processes integration between this website and relevant agencies without walk-in services. This facilitates the process of setting up companies and improves commerce industrial services efficiency.
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