[A quick overview on choice of legal entities for international founders setting up in Taiwan, part 1]
Hi, I’m Norman, an AppWorks Analyst. As an analyst here, one common question I’ve been hearing from international founders is: what type of business entities should I register for when I am trying to set up in Taiwan? And what are the differences among all the options?
Usually, international founders will approach local accounting firms for help, but it can be costly, usually around US$ 200~1,500, and still requires you to digest a lot of information before a decision can be made. My next two posts will be dedicated to giving international founders a quick overview on what options you have at your disposal and the key considerations to keep in mind. Hopefully after finishing reading these 2 posts, you will have a clearer understanding of what type of business entities you can set up in Taiwan. Let’s get started!
So far there are generally three ways to set up an entity in Taiwan:
1. Set up a representative office
2. Set up a local company
3. Set up a branch office
When founders are thinking about what type of entity to set up, the first thing you must consider is whether you are going to conduct business in Taiwan (meaning whether or not you are going to sell products or provide services in Taiwan.)
For founders who already set up an entity outside of Taiwan, you might want to find business partners, display your products, or appoint someone to represent the company in a legal capacity in Taiwan. If you are not planning to conduct business activities, then you can consider setting up a representative office. The procedure for setting up a representative office is the easiest one, as it just takes two weeks to one month. There is no need to file a capital verification report and proceed with business registration. Founders just need to file the registration application with the Ministry of Economic Affairs authority.
However, the representative office comes with its own limitations. As this type of entity is not allowed to conduct “any” business activities, which means you will not be able to complete any transactions and issue invoices. In addition, you can’t turn representative offices into another type of entity. As a result, if you set up a representative office successfully in Taiwan first, and then figure out that you should do business directly in Taiwan, you have to file another application to set up a new entity and also apply for nullification of the representative office registration.
Next week, I will introduce the other two options to wrap up this series on company setup in Taiwan. If you found this information valuable, be sure to follow our FB page to stay up-to-date on the latest posts. And if there’s anything you would like me to clarify, feel free to leave a comment below.
Photo by Kon Karampelas on Unsplash
By Norman Chi, AppWorks Analyst
