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Open a business bank account in Taiwan
One of the steps to register a company in Taiwan is to open a preparatory business bank account where to transfer the capital. However, opening a business bank account is not easy nowadays. Due to the increasing compliance requirements such as FACTA(Foreign Account Tax Compliance Act ), CRS(Common Reporting Standards), and Anti-Money laundering law, most of the banks in Taiwan reject the company to open a preparatory business bank account if the company is owned by foreign companies or by foreign nationals, or the chairman of the Taiwan company is the foreign national. Banks may also reject to open the preparatory business account if the chairman's nationality is from certain country. The definitions of "certain countries" vary depending on banks' policies.
Well preparation of your financial documents gives you more credits
Before you go to the bank in Taiwan, please prepare all the authentic documents that give you more credits such as your personal or your company's tax filing report in other countries, your or your company's bank statements in other foreign banks, and your company's products categories, etc. It is better to prepare your Taiwan business plan and the investor background if they ask for it.
FATCA for US citizens and CRS (Common Reporting Standards) requirements
For US citizens, submitting a FATCA form to the bank is mandatory, and filling out a CRS form is necessary for all foreign nationals without Taiwan passports. The bank will exchange the financial information of your bank account to the countries where your tax residency is.
Requirements for Anti-Money Laundering Law
Banks in Taiwan are required to comply with Anti-Money Laundering Law, which mandates them to report any suspicious transactions to the government, even if the amount involved is small. To minimize their risk, banks often report all new transactions to the government, especially if they are new to a company. For instance, if your company just established operations in Taiwan and receives a commission from a foreign client, the bank may ask for proof of communication and internal information to verify the legitimacy of the foreign remittance. Once they are satisfied with the information provided, the bank will report the foreign remittance to the Taiwan government.
Provide the ownership information of your Taiwan Company
As per the Regulations Governing Anti-Money Laundering of Financial Institutions Article 3, 7,(1), financial institutions are required to obtain information about the ownership and control structure of a legal entity, organization, or trustee when they are the customer. This means that if the shareholder of your Taiwan company is a legal entity such as another company, organization or trust, the bank in Taiwan will require information on the ownership and control structure of that legal entity. Specifically, they will need to identify the natural person(s) who ultimately have a controlling ownership interest in the legal entity, which is defined as owning directly and/or indirectly more than 25% of the legal entity's shares or capital.
If the legal entity controlling your Taiwan company is a listed company, then the bank may be able to obtain information on the shareholders subject to the regulatory disclosure requirements of the listed company's principal shareholders.
Open a personal bank account in Taiwan
If you do not have the ARC, the chance is low.
In the past, it used to be easy for foreigners with a valid passport to open a bank account. But not anymore. If you do not have the ARC ( Alien Residency Certificate) in Taiwan, it is extremely hard to open the personal account. Although the official requirements for a foreigner to open a personal bank account do not include ARC, most banks just reject your application if you are a foreigner and you do not have an ARC.
In addition to ARC, you will need the following documents:
1. Reason to open the bank account
You need to provide a clear and legitimate reason for opening the bank account, such as personal savings, salary transfer, business operations, or investment. Some banks may ask for supplementary documents to support your reason, such as a job contract, tax statement, business registration, or investment plan. Make sure to prepare and present the necessary documents to avoid delays or rejections.
2. A valid passport
3. TIN (Tax Identification number)
You may need to provide your Tax Identification Number (TIN) of your home country. This number is used to identify you for tax purposes and may be required by the bank to comply with local regulations and international standards. The TIN can usually be found on your tax return forms or other official documents issued by your country's tax authority.
3. Local mobile number
This number can be used to receive SMS alerts, security codes, or other notifications related to your account. If you do not have a local phone number, you can consider getting a prepaid SIM card or a temporary phone plan from a local telecom provider. Some banks may also accept foreign phone numbers or online messaging apps as alternative contact methods.
4. A valid resident address
You will also need to provide a valid resident address where you can receive mail or other communications from the bank. If you have a long-term rental or own a property in the country, you can use that address as your resident address. Keep in mind that the bank may conduct address verification checks or request additional proof of residency, such as utility bills, lease agreements, or government-issued ID cards.
Potential Challenges to open a business account and a personal account in Taiwan
1. Language Barrier
One of the main issues that foreigners face when dealing with Taiwanese banks is the language barrier. Most banks in Taiwan do not have English-speaking staff, which can make communication difficult, especially if you are not fluent in Mandarin or other local languages. To avoid misunderstandings or mistakes, it's recommended to bring a translator or interpreter to the bank when opening an account. Alternatively, you could try to find a bank that offers English-language services, although they may be limited or more expensive.
2. Credit and Debit Card Issuance
Opening a bank account does not necessarily guarantee immediate access to credit or debit cards. Unlike some other countries where banks may issue cards as a standard part of account opening, Taiwan banks may require customers to build a credit history or demonstrate financial stability before approving card applications. If you are a new customer without a credit history or existing relationship with the bank, you may need to wait for some time before being eligible for a credit or debit card. Depending on the bank's policies and your individual circumstances, this waiting period can range from several months to a year or longer. During this period, you may be able to use other payment methods, such as cash, check, or mobile payment apps, to conduct transactions.
3. Purpose of the Account
When applying for a bank account in Taiwan, you will be asked to state the purpose of the account, such as personal, business, or investment. The banker may refuse to open the account if the purpose is not clear or if there are suspicions of illegal or fraudulent activities. To avoid this, make sure to provide all the necessary documents and information, such as your passport, residency permit, tax ID, proof of address, and source of funds. You may also want to consult a lawyer or accountant if you have any doubts or questions about the legal or tax implications of opening a bank account in Taiwan.
4. Online Banking Requirements
In today's digital age, online banking is becoming increasingly popular and convenient. However, setting up online banking with Taiwanese banks can be a different experience than what you may be used to in your home country. Some banks may require additional applications, such as a security token or a digital certificate, to ensure the safety and privacy of online transactions. You may also need to download specific software to access your account online. Some online banks support Microsoft Windows OS. Therefore, it's important to check the bank's website or customer service for instructions and guidelines on how to set up and use online banking.
Physical Presence Requirement
Finally, it's worth noting that most Taiwanese banks require the physical presence of the account holder or a representative when opening an account. This means that online account opening may not be possible or may require additional steps, such as mailing or faxing documents. To save time and hassle, it's recommended to schedule an appointment with the bank in advance and bring all the necessary documents and IDs with you. You may also want to check the bank's opening hours, fees, and services before visiting the branch.
In conclusion, opening a bank account in Taiwan may involve some challenges, but with proper preparation and communication, you can overcome them and enjoy the benefits of banking in this dynamic and diverse country.