Simple Guide to Setting up a Branch Office in Taiwan
A company that is incorporated outside of Taiwan may choose to establish a branch office to conduct business in Taiwan. Foreign branches in Taiwan are not allowed to transact business without obtaining a certificate of recognition and completing the procedures for branch office registration.
Branch offices have the same rights and obligations as a domestic company, although is not considered a separate legal entity from the parent company. All liabilities are assumed by the head office. The foreign company must designate a representative for the Taiwanese branch who may be a foreign national. The parent should appropriate funds exclusively for its Taiwan operations.
Branch offices have tax advantages over a wholly-owned subsidiary company, in that it is exempt from tax on repatriation on after-tax profits to the parent company.
1. Major Features of Taiwan Branch Offices
(1) Liability
The parent company assumes all liability of the branch office.
(2) Minimum Ownership
The branch is owned by a foreign company.
(3) Minimum Capital Requirements
There are no minimum capital requirements for establishing a branch office, although the parent company should remit sufficient operating funds before establishment.
A minimum limit of NTD5 million is required as start-up capital if the company wishes to employ foreign professionals to work in Taiwan in the first year.
2. Taiwan Branch Office Registration Procedure
(1) Apply for Search and Reservation of Company name
The company may submit an online application to search for and reserve a company name at the one-stop service request website, or it may be submitted via post or in person to the Department of Commerce of the Ministry of Economic Affairs (MOEA). The company name reservation is valid from the date of approval of the Reservation Application for six months.
(2) Apply for Recognition of Foreign Company and Branch Registration
The parent company must apply to the Department of Commerce of the MOEA for the recognition of the foreign company and to also register the branch in Taiwan.
(3) Apply for Examination of Investment Capital
For foreign companies, the components of the investment capital must be examined by the Investment Commission. Once the investors have obtained approval for foreign investment and have remitted the investment capital in Taiwan, this step is taken.
(4) Apply for Importer/Exporter English name and registration
Once the company has been properly registered in Taiwan, the company must reserve a trading name if the subsidiary is to import and export from abroad, which requires an English business name. This is done through the Bureau of Foreign Trade of the MOEA. The company must then be registered under this English name.
(5) Apply for Business Registration
This step is usually completed automatically by a local agency of the national tax authority once the company has been registered and has received approval and details of the company’s registration. The company may need to submit additional supporting documents if requested by the agency of the national tax authority.
If you wish to obtain more information or assistance, please visit the official website of Kaizen CPA Limited at www.kaizencpa.com or contact us through the following and talk to our professionals:
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