/ / Taiwan-Company Limited by Shares

Taiwan-Company Limited by Shares


Throughout history thanks to its geographic position and rich natural resources Taiwan has always attracted invaders. In the 12th century it was officially included into mainland China’s territories as province Fujian what stimulated the process of island’s reclamation. From the late 16th – 17th centuries Portugal, Holland and Spain took turns in controlling Taiwan. In 1661 Taiwan became the part of China again. In 1895 the island was ceded to Japan. After World War Two Taiwan became a part of the Republic of China (ROC) which was established in 1911. Following the Chinese civil war, the Communist Party of China took full control of mainland China and founded the People's Republic of China (PRC) in 1949. The ROC with its head of state Chang Kaishek and Guomingdang party relocated its government to Taiwan, and its jurisdiction became limited to Taiwan and its surrounding islands. Since then till 1987 the island was in a military state which was introduced to fight separatism in Taiwan. The supremacy of one-party system is typical of this period. Guomindang was the only legal political party in the country, therefore economy, national administration and ideology were under its complete dictate. Due to preserved infrastructure after Japanese colonization and modernization measures taken by the Guomindang government in the 1960-70s Taiwan gradually developed into a prosperous industrial country and became one of the “Four Asian Tigers”. In the meantime domestic political climate was mitigated. In 1996 direct president election was introduced, and in 2000 for the first time in half a century opposition candidate of Democratic Progressive Party – Chen Shuibian was elected president. Meanwhile, ROC, or Taiwan, is still a partially recognized state, and most countries take the side of PRC considering Taiwan one of the provinces of PRC.

Service packages

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Service item Express Standard Optimum
Company registration
Legal address per year
Secretarial services for the first year
Fees and duties for the first year
Apostilled bound set of incorporation documents
Compliance fee
Nominee service per year
Bank Account Pre-approval
Price

9 500 USD

9 500 USD

10 000 USD

I want to order «»

Contact method: and / or

Core Services

The total amount of core services include incorporation services, legal services and delivery of documents by courier mail

9 500 USD

— Incorporation

including incorporation tax, state registry fee, including Compliance fee

5 500 USD

— Corporate legal services

including registered address and registered agent, NOT including Compliance fee

150 USD

—Delivery of documents by courier mail

DHL or TNT, at cost of a Courier Service

500 USD

— Apostilled set of Statutory documents

Optional services

Nominee Director

Paid-up “nominee director” set includes the following documents

Nominee Shareholder

Paid-up “nominee shareholder” set includes the following documents

Related services

Tax Certificate

Company’s tax residence certificate for access to double tax treaties network

Certificate of Good Standing

Document issued by a state agency in some countries (Registrar of companies) to confirm a current status of a body corporate. A company with such certificate is proved to be active and operating.

Compliance fee

Compliance fee is payable in the cases of: renewal of a company, liquidation of a company, transfer out of a company, issue of a power of attorney to a new attorney, change of director / shareholder / BO (except the change to a nominee director / shareholder)

250 USD

Basic

simple company structure with only 1 physical person

50 USD

For legal entity in structure under GSL administration

additional compliance fee for legal entity in structure under GSL administration (per 1 entity)

100 USD

For legal entity in structure not under GSL administration

additional compliance fee for legal entity in structure NOT under GSL administration (per 1 entity)

350 USD

For client with high risk Status

Cost of incorporation, including first year servicing 9500
Cost of annual service, starting from the second year 5500
Open account in 26855
Incorporation timescale for a turnkey company 7 days
Country 26676

General information shortly

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Total area Population Capital Unemployment Corruption perceptions index rank
35 980 sq. km 23 299 716 (2013) Taipei 4.17% 37 (2012)
Location Eastern Asia
National currency New Taiwan Dollar
Conditional reduction of currency NT$
Against USD 29.75
Climate, average max and min t° subtropical in the north and tropical monsoon in the south. The amount of precipitation in the lowland part is 1500—2500 mm and more than 5000 mm in the mountains. Typhoons are typical of August and September. It is a rainy season from June to august in Taiwan. The northern part of the island is cloudy through the year. In the south 90% of precipitation falls out during the rainy season.
Time difference from Moscow + 5 hours
Dialing code +886
State language Chinese
Ethnic groups 98% of Taiwan's population is of Han Chinese ethnicity, 2 % is Taiwanese aborigines
Literacy rate 98%
Credit rating AA-
Government type republic, multiparty democracy
Executive branch President, Executive Yuan (Government) with the Premier as its head
Legislative branch Legislative Yuan (unicameral body with 113 seats), elected for 4 years
Judicial branch Judicial Yuan and subject Supreme Court, High courts, district courts and Administrative court
GDP per capita rank 19 (2012)

Corporate info

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Shelf companies permitted Legal system Incorporation timescale for a turnkey company Cyrillic alphabet permitted in company name Local registered office
Yes civil law (with some elements of common law) 7 days No Yes
Types of entity unlimited company, unlimited company with restricted liability of shareholders, company limited by shares, limited company, representative office, branch of a foreign company
Incorporation timescale for a new company 7 days
Company suffix 股份有限公司 (Limited by Shares in Chinese)
Sensitive words foreign words; words associated with state agencies or social organizations; words which have an implication of offending against public order or good customs.
Local registered agent Yes
Information to be kept at the registered office Articles of Incorporation, register of shareholders
Seal required, type of seal A set of seals is required: a seal with a company name, a seal with a name of a chairman of board of directors (responsible person) and invoice seal.
Redomiciliation (to, from) permitted not required

Director and secretary

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Minimum number of directors Residency requirements for directors Corporate directors permitted Disclosure to local agent Disclosure to public
1 No Yes Yes Yes
Directors’ meetings/frequency/location Yes / no requirements
Company secretary required No
Residency requirements for a secretary No
Qualified secretary required No
Corporate secretary permitted No

Shareholder and beneficiary

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Minimum number of shareholders Residency requirements for shareholders Corporate shareholder permitted Disclosure to local agent Disclosure to public
1 corporate or 2 individual no Yes Yes No
Meetings/frequency/location Yes / annually / no requirements
Beneficiary info disclosure to No

Shares and share capital

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Minimum authorized share capital Minimum issued share capital Minimum paid share capital Authorized capital payment deadlines Bearer shares permitted
No requirements No requirements No requirements No requirements Yes
Issued capital payment deadlines Within one year after approval from Investment Commission and before establishment of company
Standard currency New Taiwan Dollar
Standard authorized share capital 500000
Standard par value of shares 10
Shares with no par value permitted No

Taxes

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Min. rate for corporate tax Capital gains tax VAT Withholding tax Exchange control
20% Regular rate 5% 21%/20%/15% There are some foreign exchange controls
Personal tax 5-40%
Corporate tax (in detail) Income tax is paid at the rate of 20%. Additional tax on profits not distributed by the end of the next fiscal year is levied at the rate of 5%
Capital gains tax. Details Profits from the sale of assets, in general, are included in the general taxable base, however, special taxes are provided for transactions with real estate
VAT. Details The VAT rate is 5%. This tax generally applies to transactions in various sectors of the economy. GBRT applies in special cases, in particular to financial institutions, small businesses. GBRT rate is 5% for banks and insurance companies
Other taxes Social Contributions, Property Tax, Land Gains Tax, land value increment tax, Real Estate Transaction Tax, Securities Transactions Tax, Inheritance and Gift Tax
Government fee No
Stamp duty 0,1-0.4%

Accounts

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Requirement to file accounts Publicly accessible accounts Audit required Requirement to file Annual Return Publicly accessible Annual Return
Yes No Yes No No
Requirement to prepare accounts Yes
Double tax treaties network 103
Tax Exchange Information Agreement network 10
OECD member No
Offshore/onshore status according to the RF laws No
Taiwan - Company Limited by Shares

GENERAL INFORMATION

General Info

The Republic of China (or Taiwan as an island which makes up over 99% of the territory of the republic) is a partially recognized state in East Asia, which had one-party system, wide diplomatic recognition and control all over mainland China before. Nowadays, it is a democratic state with a limited diplomatic recognition and control only over Taiwan and neighboring islands. Being one of the states which established the UN it was a member of the UN Security Council (in 1971 the PRC assumed China’s seat at the United Nations).
Total area is 35 980 km2, population is 23 299 716 people. About 98% of Taiwan's population is of Han Chinese ethnicity, 2 % is Taiwanese aborigines. The official language Chinese, but the most population speaks the other dialects of Chinese – Chinese and Hakka. The languages of aborigines do not hold official status and they are gradually disappearing. Taiwan uses traditional Chinese characters.
The capital of Taiwan is Taipei. National currency is New Taiwan Dollar (NT$). One US dollar is about 29.75 NT$.
The climate is subtropical in the north and tropical monsoon in the south. The amount of precipitation in the lowland part is 1500—2500 mm and more than 5000 mm in the mountains. Typhoons are typical of August and September. It is a rainy season from June to august in Taiwan. The northern part of the island is cloudy through the year. In the south 90% of precipitation falls out during the rainy season.
Time difference with Moscow is +4 hours.
Literacy Rate for 2013 is 98%.
Calling code is +886.

History

Throughout history thanks to its geographic position and rich natural resources Taiwan has always attracted invaders. In the 12th century it was officially included into mainland China’s territories as province Fujian what stimulated the process of island’s reclamation. From the late 16th – 17th centuries Portugal, Holland and Spain took turns in controlling Taiwan. In 1661 Taiwan became the part of China again. In 1895 the island was ceded to Japan. After World War Two Taiwan became a part of the Republic of China (ROC) which was established in 1911. Following the Chinese civil war, the Communist Party of China took full control of mainland China and founded the People's Republic of China (PRC) in 1949. The ROC with its head of state Chang Kaishek and Guomingdang party relocated its government to Taiwan, and its jurisdiction became limited to Taiwan and its surrounding islands. Since then till 1987 the island was in a military state which was introduced to fight separatism in Taiwan. The supremacy of one-party system is typical of this period. Guomindang was the only legal political party in the country, therefore economy, national administration and ideology were under its complete dictate. Due to preserved infrastructure after Japanese colonization and modernization measures taken by the Guomindang government in the 1960-70s Taiwan gradually developed into a prosperous industrial country and became one of the “Four Asian Tigers”. In the meantime domestic political climate was mitigated. In 1996 direct president election was introduced, and in 2000 for the first time in half a century opposition candidate of Democratic Progressive Party – Chen Shuibian was elected president. Meanwhile, ROC, or Taiwan, is still a partially recognized state, and most countries take the side of PRC considering Taiwan one of the provinces of PRC.

Government Type

The government of the Republic of China was founded on the Constitution of the ROC adopted on January,1, 1947. Form of government is presidential republic. Political regime is a democracy in a process of establishment. Since 1980s political system is being reorganized, the main steps are repeal of martial law and validation of opposition parties. Political system of Taiwan is distinguished by division in five administrative branches: executive, legislative, judicial, control and examination.
The main legislative body is the unicameral Legislative Yuan with 113 seats. Members serve four-year terms. It does not have authority over the president and cannot amend Constitution, but it still draws up laws, ratifies treaties and agreements, approves budgets, etc.
The executive branch is represented by the president and the Executive Yuan (the Government). The President is the head of state and commander-in-chief of the armed forces, who is elected by popular vote for a maximum 2 four-year terms on the same ticket as the vice –president. The president has a right to dissolve the Legislative Yuan and appoint the premier without the need for approval from the legislature. The president has authority over the Executive Yuan. The president appoints the members of the Executive Yuan as his cabinet, including a premier, who is officially the President of the Executive Yuan; members are responsible for policy and administration.
The judicial branch is represented by the Judicial Yuan. It interprets the constitution and other laws and decrees, judges administrative suits, and disciplines public functionaries. The president and vice-president of the Judicial Yuan and additional 15 justices form the Council of Grand Justices. They are nominated and appointed by the president, with the consent of the Legislative Yuan. The Supreme Court, High courts, district courts and Administrative court are subject to the Judicial Yuan. There is a separate system of military courts.
The Control Yuan is a watchdog agency that monitors (controls) the actions of the executive. It can be considered a standing commission for administrative inquiry and can be compared to the Court of Auditors of the European Union or the Government Accountability Office of the United States. It is a parliamentary organ, and its members are elected by provincial and municipal meetings. 29 members of the Yuan including the president and vice-president are nominated by the President of the ROC, with the consent of the Legislative Yuan. They serve six-year terms.
The Examination Yuan is in charge of validating the qualification of civil servants. It can be compared to the European Personnel Selection Office of the European Union or the Office of Personnel Management of the United States. It consists of the president, vice-president and 19 members nominated by the President.

Economy

Taiwan has a developed capitalist economy which is 19th-largest economy in the world. It experienced rapid development for the last several decades with an average 8% GDP growth each year. Pace of export increased after World War Two which became a major impact for industrialization. Inflation and unemployment rate are very low, export surplus is significant, foreign exchange reserves rank 4th in the world. Agriculture constitutes 3% of GDP comparing with 35% in 1952, service industry is 73% of economy. Taiwan’s economy is an important component in the global electronic industry chain. Radio parts and personal computers are two main products of information technologies in Taiwan. Unlike neighboring Japan and South Korea, small and medium enterprises constitute a significant part of cumulative business volume in Taiwan.
Taiwan is a member of Asian Development Bank (ADB), World Trade Organization (WTO) as well as Asia-Pacific Economic Cooperation (APEC). Taiwan is also an observer in Organization for Economic Cooperation (OECD) under a name of Chinese Taipei. Taiwan is a member of International Chamber of Commerce as Chinese Taipei. In 2010 the main five trade partners of Taiwan were PRC, Japan, the USA, the EU and Hong Kong.

CORPORATE INFORMATION

Legal System

Taiwan is a civil law country with some elements of common law. Meanwhile, sense of justice and law culture of the country are based on Confucianism.
Today’s legal system of Taiwan inherited legal system of mainland China before 1949. Almost all Guomindang laws, which ceased to be in force on mainland China after establishment of PRC, continued to be valid on the island. Since 1949 Guomindan legislation was modified according to the needs of accelerated capitalist development of Taiwan.
Since 1980s democratization of Taiwan legal system took place. Alongside liberalization of political life, repeal of military law (1987), draconian criminal laws which were aimed to fight with communist acitivites became invalid.
The main sources of law are legislative acts and other regulatory acts with Constitution of 1947 at the head. ROC law is well systematized. All the acts can be divided into several goups: constitutional, civil, criminal, criminally-remedial, administrative (including labor, financial and land law).

Types of Entity

According ROC law there are following types of business entities in Taiwan:
  • unlimited company
  • limited company
  • company limited by shares
  • unlimited company with limited liability shareholders
  • partnership
  • sole proprietorship
  • representative office
  • foreign branch

Unlimited companies are registered more rarely than other types of business entities. Foreign investors usually choose limited company, company limited by shares, foreign branch or representative office.

Company vs. Partnership/Sole Proprietorship

Requirements Company Partnership/Sole Proprietorship
Minimum capital requirement no minimum requirement*, but the capital still needs to be examined and certified by a local CPA that it covers at least the incorporation cost not required
Extent of liability liable to the extent of capital contribution to the company liable for any liabilities arising from the business operation
Qualification of being a juristic person qualified as a juristic person not qualified as a juristic person
Requirement for accounting books compulsory not compulsorily required

*If the business entity engages in activities that require a special permit or approval, the authorities may set a higher capital requirement.

Company vs. Foreign Branch vs. Representative Office

Requirements Company (Company Limited by Shares/Limited Company ) Foreign Branch Representative Office
Permitted activities general trading, sales and manufacturing not requiring a special permit or approval general trading, sales and manufacturing not requiring a special permit or approval legal acts and liaison activities
Income Tax(T) income less than 120 000, tax=0; income more than NTD120,000, but less than NTD181,818, tax=(income -120,000)*1/2; income more than NTD181,818, T=17% income less than 120 000, tax=0; income more than NTD120,000, but less than NTD181,818, tax=(income -120,000)*1/2; income more than NTD181,818, T=17% ---
Profit remittance tax 20% + 10% surtax on undistributed profits none ---
Tax incentives under the Statute for Industrial Innovation applicable not applicable not applicable
Extent of the liability liable to the extent of their capital contribution to the company foreign head office is liable for any liabilities unsettled by the branch ---
Shareholders at least one individual or corporate shareholder (in case of company limited by shares: one corporate shareholder or two individual shareholders); all shareholders may be foreign nationals residing outside of Taiwan not required to have shareholders but required to register a responsible person not required
Directors 1-3 directors (in case of company limited by shares: at least 3 directors) not required not required
Minimum capital requirement not required*, but the capital still needs to be examined and certified by a local CPA and covers at least the incorporation cost not required*, but the capital still needs to be examined and certified by a local CPA and covers at least the incorporation cost not required
Keeping of accounting books and records required required required

* If the business entity engages in activities that require a special permit or approval, the authorities may set a higher capital requirement.

REGISTRATION

Registration of Company Limited by Shares in Taiwan

There are several steps of registration of a company limited by shares in Taiwan:
1. Apply for search and reservation of company name and business scope (please provide 1 to 5 company names in Chinese in their order of priority and proposed business scope) – 1-2 business days;
2. Apply for Foreign Investment approval
Required documents (a Chinese translation of these documents shall be attached):
  • Application Form;
  • the originally approved application form for Reservation of Company Name and Business Scope;
  • Confirmed roster of shareholders and capital amount;
  • Power of Attorney authorizing a Juristic Person Stockholder as the Representative of a corporate investor(if needed);
  • Certificate of Incorporation;
  • Power of Attorney from an investor appointing and authorizing a local agent to deal with the application process to obtain government approval of foreign investment;
  • a copy of passport of corporate representative or individual investor.

3. Apply for Examination of Investment Capital - 7-14 business days
Required documents:
  • Application Form;
  • Letter of Approval of foreign investment issued by the Investment Commission;
  • a copy of the bank's Inward Remittance Advice;
  • a copy of the bank’s Foreign Exchange Memorandum;
  • a copy of bank account passbook).


4. Apply for company registration (a pre-approval is required before applying for company registration if the company intends to conduct special business which is subject to additional requirements and regulations ruled by the competent authority) – 1-5 business days
Required documents:
  • Application Form;
  • Articles of Incorporation;
  • Minutes of the incorporators' meeting;
  • Minutes of the Board of Directors' meeting and attendance record;
  • Name, address and number of shares subscribed and paid by each incorporator;
  • Consent letter from chairman of the board of director(s)/director(s) and supervisor(s);
  • Power of attorney for appointing individuals as the corporate shareholders' representatives;
  • A CPA's report for verifying the paid-in capital and related supporting documents;
  • ID Documents required from incorporator(s), director(s) and supervisor(s);
  • The original consent letter from the owner of the building to agree the use of the building as the registered address of the branch or the signed leasing contract and the photocopy of the latest property tax statement.

5. Apply for business registration – 7-10 business days;
6. Apply for factory registration (this is not applicable to a non-manufacturing business);
7. Apply for registration of importer/exporter (for trading business only) – 1 business day.

Company Name

The name of a foreign company should be translated into Chinese, contain type of business entity and nationality. Companies cannot use identical names. Company name should not mislead people, contain words associated with state agencies or social organizations, have an implication of offending against public order or good customs.

Local Registered Office

Company should have a local registered office. Articles of Incorporation must be kept in the office. In case of violation a fine of not less than NT$10 000 and not more than NT$50 000 shall be imposed.

Seal

To seal all registration documents and acts company should get a set of seals, including a seal with a company name, a seal with a name of a chairman of board of directors. Each seal costs NT$450 - 1000 depending on a quantity of used material.

Redomicile

Company cannot be redomiciled in Taiwan.

COMPANY STRUCTURE

Directors

Company limited by shares should at least have 3 directors and 1 supervisor. At least a half of directors should be locals residing in of Taiwan. Supervisor represents interests of share holders and is elected from shareholders.

Board of Directors

Company Limited by Shares should have a Board of Directors. All decisions by the Board should be confirmed by personal signatures of directors. Making decisions through proxy or by phone is prohibited. However, in case of meeting through a video conference call director is considered to have attended the meeting. If a director resides abroad, he can appoint a shareholder residing in Taiwan to be his proxy in writing to take part in meeting on a regular basis.
It is also necessary to choose a director, directing manager or a supervisor to be responsible person who will be in charge of the everyday activity of the company. It is not needed to appoint a local agent to solve legal arguments.

Secretary

Secretary is not required. However, company should have at least one managing director who should be a resident of Taiwan.

Shareholders

Company Limited by Shares shall be incorporated by at least one corporate shareholder or two individual shareholders. Shareholders should unanimously adopt the Articles of Incorporation, copy of which must be kept by every shareholder. Shareholders should hold meetings at least once a year. Annual meeting must be held within 6 months after closing a financial year. In case of violation director who represents the company is bound to pay a fine 10 000 to 50 000 NT$.
Shares of the company can be transferred to a third party. There is only one restriction. First shareholders –incorporators of the company cannot transfer their shares within a year after company incorporation.

Beneficiary

The information on beneficiary is not disclosed.

Shares and Share Capital

Minimum capital depends directly on the business type of a company. Minimum capital requirement was canceled by Ministry of Economy. But the capital still needs to be examined and certified by a local CPA and covers at least the incorporation cost.
Registered capital can be paid in installments.
In Company Limited by Shares shareholders are liable to extent of paid in capital share. Capital is divided into shares which have the same nominal price.

Public Access to Information

The following particulars of company registration shall be made open to the public by the competent authority:
  • The name of the company;
  • The scope of business of the company;
  • The location of the company;
  • The shareholder(s) executing the business operations or representing the company;
  • The name of directors and supervisors and their respective shareholdings in the company;
  • The name of the manager;
  • The amount of authorized capital stock or of the paid-in capital;
  • The Articles of Incorporation of the company.

Any person may apply to the competent authority for a charged access to the above information.

TAXATION

Personal Income Tax

Residents and non-residents are both subject to income tax on Taiwan-sourced income.
Tax residents pay tax at progressive tax rates:
  • For income up to TWD 540,000 at the rate of 5%
  • From TWD 540,000 to 1,210,000 – 12%
  • From TWD 1,210,000 to 2,420,000 – 20%
  • From TWD 2,420,000 to 4,530,000 – 30%
  • Over TWD 4,530,000 – 40%

In addition to the regular income tax, there is an income basic tax (IBT). The base of this tax includes foreign-sourced income if a Taiwanese tax resident’s foreign-sourced income exceeds TWD 1 million and the total income exceeds TWD 6.7 million.
The tax rate is 20%. If IBT exceeds the amount of the regular income tax, then the excess of the IBT over the regular income tax is payable in addition to the regular income tax. IBT is calculated using a special formula (total income excluding special deductions minus TWD 6.7 million is multiplied by 20%).
Gains from the sale of assets and dividends are included in the taxable income.
The salary of non-residents is taxed at 18%, other kinds of income at 20%, dividends – at 21%.

Corporate Income Tax

Corporate income tax is paid at the rate of 20%.
An additional 5% profit retention tax is levied on profits that remain undistributed by the end of the next financial year.
Taiwanese companies receiving tax-exempt income must calculate the income basic tax (IBT). The base of this tax, in general, includes all the company's income minus TWD 500,000. The tax rate is 12%. If IBT exceeds the amount of corporate income tax, then the difference between IBT and corporate income tax must be paid in addition to the corporate income tax amount.
Gains from the sale of assets are normally included in the general tax base, however transactions with immovable property are subject to special taxes. Gains from the sale of Taiwanese marketable securities are not subject to corporate income tax, but are included in the IBT base. If the securities have been held for more than three years, 50% of capital gains from their sale can be exempted from taxation.
Dividends from Taiwanese companies are tax exempt.

CFC Rules

CFC rules were introduced into Taiwanese tax legislation at the end of 2016, but they have not come into effect yet.
A foreign company is considered a controlled foreign company (CFC) if the share held by a Taiwanese company in its capital, directly or indirectly, solely or jointly with related parties, exceeds 50%.
The CFC rules apply if the foreign company is from a low-tax jurisdiction (where corporate income tax is less than 70% of the Taiwanese tax), or from a jurisdiction where foreign-sourced income is not taxed or is only taxed upon receipt.
The lists of the relevant countries will be published by the Ministry of Finance.
There are exemptions for companies with active business and profits below certain thresholds.

Withholding Tax

Payment of dividends is subject to 21% withholding tax.
Withholding tax on interest payments is levied at 20%, on interest on some financial instruments – at 15%.
Withholding tax on royalties is paid at 20%. However, such payments can be exempted from
withholding tax by a special approval from the government.
The tax may be withheld on certain other payments of income.
Tax rates can be reduced under double tax treaties (DTT).

VAT and GBRT (Gross Business Receipts Tax)

The VAT rate is 5%. This tax generally applies to transactions in various sectors of the economy.
GBRT applies to specified industries, in particular financial institutions and small businesses.
The GBRT rate is 5% for banks and insurance companies.
The rate is 1% for reinsurers and 2% for some investment companies.

Social Security Contributions

Social security contributions are paid by employers and employees.
Labour insurance contribution is 10.5% of the monthly salary of up to TWD 45,800, of which 70% is payable by the employer and 20% by the employee (10% by the government).
Employers also pay an additional 1% for unemployment insurance.
Health insurance contribution is 5.17% of the monthly salary of up to TWD 182,000, of which 60% is payable by the employer and 30% by the employee (10% by the government). The contribution is calculated both for the employee and his/her dependants according to special rules.
Employers pay an additional 2.11% health insurance contribution on the difference between the employee's monthly salary and the monthly remuneration on which mandatory health insurance contributions are levied.
Employees also pay an additional 2.11% health insurance contribution on certain bonuses.
Labour pension contribution is payable by the employer at the rate of at least 6% of the monthly employment remuneration of up to TWD 150,000.

Property Tax

The annual land tax is paid at the rates from 1% to 5.5%, tax on commercial properties – at the rates from 3% to 5%, tax on non-commercial properties – at the rates from 1.2% to 3.6%.
The tax base is determined by the regulatory authorities.

LVIT (Land Value Increment Tax)

The tax is paid by the seller of the land on the increase in the official value of the land during the ownership period, adjusted for inflation.
The tax rates range from 20% to 40%, or a special rate of 10% applies.

Property Transfer Tax

The tax is paid on the profit from the sale of immovable property (the difference between the market value and the acquisition costs, expenses, and the increase in the official value of the land during the ownership period).
The tax rate is 20% for Taiwanese companies; for foreign companies – the rate is either 35% when holding properties for more than a year or 45% when holding properties for less than a year.

Deed Tax

The tax is paid on immovable property transactions at rates from 2% to 6%, depending on the type of transaction.

Stamp Duty

Stamp duty is payable on various documents at different rates (usually from 0.1% to 0.4%) or as a fixed sum.

Securities Transactions Tax

The tax is levied at the rate of 0.3% on proceeds from the sale of shares in Taiwanese companies.
The tax on transactions with bonds is temporarily suspended.

Inheritance and Gift Tax

Inheritance tax is levied at progressive rates from 10% to 20%. There are exemptions.
Gift tax is levied at the same rates, however, the amounts to which the tax applies are different. There are certain exemptions.

Exchange Control

Taiwan has certain foreign exchange controls. In particular, there is an obligation to declare certain transactions that exceed the established thresholds.
Certain foreign exchange transactions require permission from the Central Bank.

ACCOUNTS

Annual Return

Generally speaking, Annual Return is a short review on the current state of the company, which is prepared by the company secretary annually. As a rule it includes the following information:
  • Incorporation information (registration date, registered address);
  • Information about directors and their resignation;
  • Information about secretaries and their resignation;
  • Information about registered capital, nominal value of shares and amount of issued shares;
  • Information about shareholders and share transfer.

As for Taiwan, Annual Return is not required unless the company should require special permission of the government in accordance with the law or an order is given by a competent authority duly authorized by the law.

Audit

All companies in Taiwan should keep accounting reports and file annual returns. At the end of financial year directors of a company submit an annual report on company's business and a proposal on surplus income distribution and loss compensation to the shareholders for approval. If there is no any objection on report within a month, it is considered to be approved by all shareholders.
Besides, competent authorities can come for inspection at any time and request to prepare accounting books in a short period. In case of violation a fine not less than NT$10 000, but not more than 50 000 is imposed. If a company refuses to go through inspection and file the said documents, it is obliged to pay a fine 20 000 - 100 000 NT$. If needed, competent authorities may appoint a CPA, lawyer or other professional stuff to assist inspection. In the meantime, the authorities are bound to keep confidentiality and return all the documents to the company within 15 days after receipt.

Tax Returns

The tax year coincides with the calendar year.
Companies can apply to the tax authorities to have a different reporting period.
Corporate income tax returns are filed within 5 months of the tax year-end.
The same deadline is set for the final tax payment, and a provisional tax payment is made during the year.

International law relations

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Party to the Hague Convention (Apostille) Legal system Double tax treaties network OECD member Offshore/onshore status according to the RF laws
No civil law (with some elements of common law) 103 No No

Public authorities and legal acts

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List of laws and regulations
Act name Scope of law
Company Act business entites
Regulations Governing Collection of Company Registration Fees registration fees
Business Registration Act business regisration
Regulations Governing Company Registration and Recognition company registration
Foreign Trade Act foreign trade
Regulations Governing Registration and Administration of Exporters and Importers export and import
Statute For Investment by Foreign Nationals investment
Negative List for Investment by Overseas Chinese and Foreign Nationals investment activities requiring special permit
Patent Act patents
Copyright Act copyright
Customs Law customs control
Tax Collection Act taxation
Income Tax Act Personal and Corporate Tax
Value-added and Non-value-added Business Tax Act VAT
Tax treaties entered Albania, Algeria, Armenia, Australia, Austria, Azerbaijan, Bahrain, Bangladesh, Barbados, Belarus, Belgium, Bosnia and Herzegovina, Botswana, Brazil, Brunei Darussalam, Bulgaria, Cambodia, Canada, Croatia, Cuba, Cyprus, Czech Republic, Denmark, Ecuador, Ecuador, Egypt, Estonia, Ethiopia, Finland, Former Yugoslav Republic of Macedonia, France, Georgia, Germany, Greece, Hong Kongn (China), Hungary, Iceland, India, Indonesia, Iran, Ireland, Israel, Italy, Jamaica, Japan, Kazakhstan, Korea (Republic of), Kuwait, Kyrgyzstan, Lao People's Democratic Republic, Latvia, Liechtenstein, Lithuania, Luxembourg, Macao (China), Malaysia, Malta, Mauritius, Mexico, Moldova (Republic of), Mongolia, Morocco, Nepal, Netherlands, New Zealand, Nigeria, Norway, Oman, Pakistan, Papua New Guinea, Philippines, Poland, Portugal, Qatar, Romania, Russian Federation, Saudi Arabia, Serbia, Seychelles, Singapore, Slovakia, Slovenia, South Africa, Spain, Sri Lanka, Sudan, Sweden, Switzerland, Syrian Arab Republic, Tajikistan, Thailand, Trinidad and Tobago, Tunisia, Turkey, Turkmenistan, Uganda, Ukraine, United Arab Emirates, United Kingdom, United States, Uzbekistan, Venezuela, Viet nam, Zambia, Zimbabwe
Tax Exchange Information Agreement (TEIA) Argentina, Bahamas, Bermuda, Cayman Islands, Guernsey, Isle of Man, Jersey, Liechtenstein, San Marino, Virgin Islands (British)
List of state regulatory authorities
Taiwan Government http://www.taiwan.gov.tw/index.php
CNFI (Chinese National Federation of Industries) http://www.cnfi.org.tw/front/bin/home.phtml
CNAIC (The Chinese National Association of Industry and Commerce) http://www.cnaic.org/index.asp?lang=2
CISA (Information Service Industry Association) http://www.cisanet.org.tw/eng
PIDA (Photonics Industry & Technology Development Association) http://www.pida.org.tw/usub/en/index.asp
ROCCPA (Certified Public Accountant) http://www.roccpa.org.tw/home.php
ROCCOC (The General Chamber of Commerce) http://60.244.127.66/English/
TBA (Taipei Bar Association) http://www.tba.org.tw/84ef558f14.html
TAITRA (Taiwan External Trade Development Council) http://www.taitra.com.tw/Index.aspx
TAMI (Taiwan Association of Machinery Industry) http://www.tami.org/
TEEMA (Taiwan Electrical and Electronic) http://www.teema.org.tw/english/index.aspx
TCOC (Taiwan Chamber of Commerce) http://www.tcoc.org.tw/
TIEC (Taiwan Importers & Exporters Chamber of Commerce) http://www.tiec.org.tw/
Company, Business and Limited Partnership One-Stop Service Request http://onestop.nat.gov.tw/oss/web/Show/engWorkFlow.do

    Government body

    Zhong Yin Law Firm

    Zhong Yin Law Firm specializes in Foreign Investment regulations, Corporate Laws, Securities Laws, Medical laws, MLM (Multi-level Marketing)-related or direct selling laws, Mergers-and-Acquisition Laws, Venture Capital projects and Joint Venture projects, etc. Zhongyin also provides legal consultations for corporations who wish to be listed in Taiwan securities market. It has a wide reach of branch firms in over 30 major cities in China.

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