Good to know
Good to Know
- Taiwan does not require a local Taiwanese co-owner for most business types — a foreigner (individual or foreign company) can usually be the 100% owner and sole director of a Taiwan company.
- Foreign Investment Approval (FIA) from the Department of Investment Review is a separate step that must happen before or alongside company registration — don't assume company registration alone is sufficient to legally bring in foreign capital.
- Owning a Taiwan company does not automatically grant you the right to live in Taiwan — a separate Alien Resident Certificate (investor visa) application with its own minimum-investment threshold is needed if you plan to be resident and run the business in person.
- Kaohsiung's Economic Development Bureau handles many smaller local company registrations, so incorporation can often be done without needing to file directly with MOEA in Taipei — useful for nomads/entrepreneurs based specifically in Kaohsiung.
- Foreign-owned companies pay exactly the same corporate tax rates as domestic Taiwanese companies — there is no foreign-owner surcharge.
- If you're deciding between freelancing informally and forming an LLC: a sole proprietorship is really only a practical option once you already have an ARC/residency status, and it can't itself sponsor a work permit — most foreign entrepreneurs who need visa sponsorship end up forming an LLC instead, even for a small solo operation.
- Watch the 5% surtax on undistributed profits: if your company holds cash in retained earnings rather than paying it out as dividends, that unpaid balance gets an extra 5% tax the following year — worth factoring into how you plan distributions.
- Business Tax (Taiwan's VAT) is filed every two months, not annually — plan your bookkeeping cadence around that rather than around the once-a-year corporate income tax return.
Business Tax And Structure Options
- Scope Note
- Covers local business/corporate tax mechanics and the freelancer/sole-proprietor vs. full-company distinction for a foreign entrepreneur in Kaohsiung.
Business Tax VAT
- Rate Percent
- 5
- Filing Frequency
- Returns are generally filed every two months (bi-monthly), due by the 15th of the month following the reporting period; businesses with regular VAT credits (e.g. exporters) may file monthly.
- Registration Trigger
- Any company with a registered entity or permanent establishment in Taiwan must register for Business Tax/VAT; foreign e-commerce sellers without a fixed place of business must also register if annual Taiwan sales exceed a set threshold.
- Description
- Taiwan's VAT, called "Business Tax," is levied at a standard 5% rate on most goods and services, with a 0% rate for exports and certain exemptions.
Corporate Income Tax
- Standard Rate Percent
- 20
- Official Name
- Profit-Seeking Enterprise Income Tax
- Small Income Exemption
- NT$120,000
Companies with taxable income at or below this threshold are exempt from corporate income tax.
- Resident Vs Nonresident
- A Taiwan resident company (including a locally incorporated foreign-owned subsidiary) is taxed on worldwide income at 20%. A non-resident company operating via a branch or fixed place of business in Taiwan is taxed the same way but only on Taiwan-sourced income.
- Foreign Vs Domestic Treatment
- There is no separate or higher corporate tax rate for foreign-owned companies — a foreign-owned LLC or company limited by shares is taxed identically to a fully domestic one once incorporated in Taiwan.
Structure Comparison
Sole Proprietorship (獨資)
- Liability
- Owner carries unlimited personal liability for all business debts — there is no separate corporate legal shield.
- Tax Treatment
- No separate corporate tax filing — business income flows into and is reported as part of the owner's personal income tax return, taxed at personal progressive rates rather than the 20% corporate rate.
- Who Can Use It
- A business registered under the owner's own personal name. Non-residents can in principle open one, but in practice this route is generally only realistic for someone who already holds an Alien Resident Certificate (ARC) or permanent residency — it is not a way to obtain initial work/residency status.
- Practical Limits
- A sole proprietorship cannot itself sponsor or hire foreign employees, and it does not generate its own work permit for the owner — a real limitation for a foreigner trying to use this structure as their basis to legally live and work in Taiwan.
- Registration Authority
- Registered locally with the city/county government (in this case, the Kaohsiung City Government) rather than the central Ministry of Economic Affairs.
Limited Liability Company / LLC (有限公司)
- Liability
- Shareholder liability is limited to their capital contribution — a genuine legal separation between owner and business.
- Tax Treatment
- Subject to the standard 20% corporate income tax on net income (worldwide, if resident), plus the 5% surtax on undistributed earnings, plus 5% Business Tax/VAT on relevant transactions.
- Who Can Use It
- The most common vehicle for foreign founders. Foreign nationals may hold 100% ownership; requires at least one shareholder and one director.
- Capital And Approvals
- No statutory minimum capital exists in principle — as little as NT$1 is technically possible — but any foreign shareholding requires prior approval from the Department of Investment Review (formerly Investment Commission) under the MOEA, and capital of at least NT$500,000 is generally needed if the company wants to sponsor a foreign manager's work permit.
- Registration Authority
- Registered via the MOEA One-Stop Portal; for paid-in capital under NT$500 million, registration is handled by the Central Region Office of MOEA or the relevant local city government, including Kaohsiung City Government.
Company Limited by Shares (股份有限公司)
- Tax Treatment
- Same 20% corporate tax and 5% undistributed-earnings surtax regime as an LLC.
- Who Can Use It
- Suited to businesses planning to bring in outside investors or eventually pursue a stock listing; requires more than two shareholders.
- Practical Note
- More administratively complex than an LLC and generally only worth it if external investment or a future listing is actually planned.
Branch Office of a Foreign Company
- Liability
- Not a separate legal entity — liabilities extend back to the foreign parent company.
- Tax Treatment
- Taxed only on Taiwan-sourced income at the same 20% rate as a resident company, but is explicitly not subject to the 5% undistributed-earnings surtax that applies to locally incorporated subsidiaries.
- Who Can Use It
- For a foreign company wanting a direct Taiwan presence without creating a separate local legal entity.
- Capital Note
- Does not require its own capital contribution to start operating, since it isn't a standalone entity.
Representative Office
- Who Can Use It
- For a foreign company that wants a legal representative in Taiwan but does not want to conduct profit-seeking (revenue-generating) activity locally.
- Practical Limit
- Cannot be used to actually run a trading/profit-seeking business — it is a liaison presence only, reported to the Central Region Office of the MOEA.
Filing Obligations Summary
- Obtain a Unified Business Number (UBN) as part of company/business registration, then register with the local tax office within 15 days of commencing operations.
- File Business Tax (VAT) returns bi-monthly, generally due the 15th of the following month, filed electronically with payment due simultaneously.
- File the annual Profit-Seeking Enterprise Income Tax return, typically in May each year, plus a mid-year provisional/interim tax payment.
- Companies organized as a corporation must use accrual-basis accounting; other structures may apply to use cash-basis with tax authority approval.
- Dividend withholding tax of 21% applies when a Taiwan company distributes profits to non-resident (including foreign) shareholders, subject to reduction under an applicable tax treaty.
Registration Process Notes
- Steps
- Name reservation and business-scope filing, then (for any non-Taiwanese shareholder) mandatory foreign investment approval from the Department of Investment Review/MOEA, capital verification by a CPA where applicable, formal company/business registration, and then local tax registration to obtain the Unified Business Number.
- Timeline
- The foreign-investment review step alone is typically quoted at roughly two to six months, on top of standard registration processing.
- Kaohsiung Specific
- For companies with paid-in capital under NT$500 million, company registration is handled locally — through the Kaohsiung City Government — rather than only at the central Department of Commerce, which applies only above that capital threshold.
Undistributed Earnings Surtax
- Rate Percent
- 5
- Branch Exemption
- Branches of foreign companies (as opposed to locally incorporated subsidiaries) are not subject to this profit retention tax.
- Description
- An additional 5% profit retention tax applies to any current-year earnings of a Taiwan-incorporated company that remain undistributed by the end of the following year.
Incorporation Process And Requirements
- Jurisdiction
- National framework (Taiwan/ROC) — Kaohsiung company registrations are filed with the Kaohsiung City Government Economic Development Bureau (for smaller local companies) or the Ministry of Economic Affairs Department of Commerce (for larger paid-in capital or branch offices); the substantive rules are set nationally.
- Typical Timeline
- Roughly 6–10 weeks end-to-end for a straightforward, non-restricted-sector limited company: capital remittance and FIA approval commonly take 2–4 weeks, CPA capital verification a few days, and company/tax registration filing another 1–3 weeks. Restricted-sector businesses, branch offices, or cases needing extra documentation can take considerably longer.
- Local Partner Or Sponsor Requirement
- No mandatory local partner or local shareholder is required for most business activities — 100% foreign ownership of a Taiwan limited company (公司) is generally permitted. A short 'negative list' of restricted/prohibited sectors exists (e.g. certain agriculture, utilities, some media/broadcasting, specific transport) where foreign equity is capped or barred; outside those sectors a single foreign natural person or foreign company can be the sole shareholder and director.
Typical Costs
TWD
TWD
Ongoing Monthly Bookkeeping/accounting Service (Required for Tax Filings)
- Ongoing Monthly Bookkeeping/Accounting Service (Required For Tax Filings)
- NT$3,000
Typical Steps
- 1. Reserve company name and confirm intended business scope codes with MOEA's company registration name-check system.
- 2. Open a preparatory (pre-establishment) foreign-currency bank account in Taiwan and remit the investment capital from abroad into it.
- 3. Apply for and obtain Foreign Investment Approval (FIA) from the Department of Investment Review, MOEA, submitting the remittance/exchange documents and investor identity documents.
- 4. Have a Taiwan CPA issue a capital verification report (資本查核報告) confirming the paid-in capital was actually received.
- 5. File for company registration with the Kaohsiung City Government Economic Development Bureau (small/medium capital) or MOEA Department of Commerce (larger capital or branch offices).
- 6. Register for business tax / uniform invoice number with the local National Taxation Bureau office serving Kaohsiung.
- 7. If hiring staff, register the business with the Bureau of Labor Insurance and National Health Insurance Administration.
- 8. If the foreign investor plans to reside and manage the business locally, separately apply for a Work Permit and Alien Resident Certificate (ARC) as a foreign investor/responsible person, which has its own minimum-investment threshold.
Minimum Capital
- Company Law Minimum
- The Company Act abolished a fixed statutory minimum paid-in capital requirement (a token amount is technically possible), but capital must realistically cover registration/CPA costs and be sufficient to satisfy the bank and CPA capital-verification process.
- Investor Arc Threshold Note
- To qualify for a Foreign Investor's Alien Resident Certificate (as opposed to simply owning shares from abroad), immigration practice has historically required a minimum individual investment in the company, commonly cited around NT$500,000, though this is an ARC/visa threshold rather than a company-registration minimum and should be reconfirmed directly with the National Immigration Agency for the current figure.
Core Approvals Needed
- Foreign Investment Approval (FIA) from Taiwan's Department of Investment Review (DIR), Ministry of Economic Affairs — this is a prerequisite for a foreign national or foreign company to inject capital into a Taiwan entity; it is separate from, and precedes, company registration.
- Company name reservation and business-scope pre-check through the MOEA Department of Commerce company/business name search system.
- Company registration (設立登記) — filed with the Kaohsiung City Government Economic Development Bureau or MOEA Department of Commerce depending on paid-in capital size.
- Tax registration with the local National Taxation Bureau branch covering Kaohsiung.
- If the foreign owner intends to live in Taiwan on the strength of the investment, a separate Alien Resident Certificate (ARC) application tied to a minimum qualifying investment amount is a further, distinct step from the company registration itself.
AI-generated estimateData refreshed July 2026
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Data last updated July 2026 · Verify anything important.