For foreign investors considering Taiwan company setup, establishing a branch office is a popular alternative to incorporating a full subsidiary. Establishing a branch office in Taiwan is an excellent strategy for foreign companies looking to expand into Asia. With its vibrant economy, favorable business infrastructure, and strategic location, Taiwan offers a compelling base for regional operations. This guide walks you through the essential steps, legal obligations, and timelines.
Is a branch office the right choice for your Taiwan company setup?
When planning your Taiwan company setup, you generally have two main choices: a limited company (subsidiary) or a branch office. While a limited company is a separate legal entity, a branch office is an extension of the headquarters. This page focuses on the Taiwan company setup process specifically for branch offices.
Pros and cons of setting up a branch office
Setting up a branch office in Taiwan offers several advantages for foreign companies. The registration process is relatively straightforward, it provides direct access to Taiwan’s diverse markets, and it positions your business in one of Asia’s most strategic locations. Another key benefit is that income tax is imposed only on the branch’s Taiwan-sourced profits, and there is no dividend tax when the branch office remits after-tax profits to its foreign head company.
That said, it is important to recognize that a branch office in Taiwan is not an independent legal entity — it functions purely as an extension of the foreign parent company. As a result, the head company is fully liable for all actions of the branch.
However, if your foreign head company provides services to Taiwan clients, the Taiwan branch will be considered a permanent establishment in Taiwan of the head office. The branch office is therefore required to file VAT and income tax for the services rendered by the foreign head company.
Requirements for setting up a branch office in Taiwan
Chinese company name
The name of a branch office should follow this format:
[Foreign head company name] + Taiwan Branch
For example, if a UK-registered company named Songjer Consultancy Limited applies to set up a branch office in Taiwan, the branch office name would be Songjer Consultancy Limited Taiwan Branch.
Additionally, every Taiwan branch is required to register under a Chinese name. Our team can assist in creating a Chinese business name that either reflects the sound of your English name or conveys a similar meaning.
Registered operating fund
The registered operating fund is the fund that helps the branch sustain its business operation. You must determine the registered operating fund for your Taiwan branch. The funds should be remitted from the head company’s bank account in foreign currency and converted into New Taiwan Dollars for registration.
Business scope
A Taiwan branch is generally allowed to conduct the same business activities as a local company under Taiwan’s Company Act. However, some business activities are regulated. For example, if you plan to run a pet store that breeds, trades, and fosters pets (A401031 Pets Service Manufacturing), you will need a business permit from the Ministry of Agriculture. Similarly, to register a pharmaceutical company (C802041 Drugs and Medicines Manufacturing), you will need a permit from the Ministry of Health and Welfare.
Legal representative (responsible person)
The branch must appoint a legal representative (branch manager). This individual can be of any nationality, but must have a domicile or residence in Taiwan.
Branch manager
The branch must appoint a branch manager. This individual can be of any nationality. The legal representative and the branch manager can be the same person.
Registered address
A physical address is mandatory for branch registration. Companies may either lease an office or use a business center address for registration purposes. A signed lease is mandatory.
Taiwan branch registration process
The procedure for registering a branch office in Taiwan is quite similar to setting up a limited company. You must prepare the required documents and submit them to the Administration of Commerce, Ministry of Economic Affairs (MOEA). The entire process generally takes about 6 to 10 weeks, depending on government and bank processing times.
- Reserve a Chinese company name with MOEA.
- Apply for investment approval with MOEA. During this process you must disclose the head company’s holding structure down to the ultimate beneficial owner, who must be an individual. This involves providing the shareholder list for each layer of the holding companies.
- Open a preparatory bank account. Setting up a preparatory business account to receive the operating fund is a mandatory step.
- Remit the capital and have it verified by a CPA. Once the remittance has been confirmed, the operating fund needs to be verified by a Taiwan CPA as part of the registration process.
- Apply for branch registration.
- Register for VAT with the local tax office.
- Convert the preparatory bank account into an official account and open an online bank account.
FAQ
What is the minimum registered operating fund for the branch?
There is no statutory minimum. However, to ensure smooth operations, we recommend setting an amount sufficient to cover the business activities for at least three months without relying on additional funding. If the initial capital is set too low, the authorities may require the company to submit a three-year financial plan demonstrating its ability to operate sustainably with limited capital. In practice, however, banks usually expect an operating fund of at least TWD 500,000, or even TWD 1,000,000, before they will open the preparatory bank account.
In addition, if you plan to apply for a work permit for a foreign national to serve as the company’s manager, the fund must be at least NTD 500,000.
I am still looking for a permanent office. Can I register in a business center temporarily?
Yes. Finding a suitable office can be challenging with so many factors to consider. You may temporarily register your company at a business center or even at your home, and then relocate to a permanent office later. However, certain types of businesses — such as import/export and trading companies, restaurants, and manufacturers — are not permitted to register at a business center or residential address. In such cases, the government may reject the application.
Can the head office take back the operating fund later?
Not at will. The operating fund can be spent on the branch’s business in Taiwan, such as rent, salaries and equipment, but under Article 372 of the Company Act, if the branch’s responsible person returns the registered operating fund to the head office, or lets the head office withdraw it, after registration, the responsible person may face imprisonment of up to five years and/or a fine of NTD 500,000 to 2,500,000, and MOEA may revoke the branch registration. If the fund is to be reduced, apply for a change of registration with MOEA first.
Is a branch subject to the 5% surtax on undistributed earnings?
No. The 5% surtax on undistributed earnings applies to companies incorporated in Taiwan. A Taiwan branch of a foreign company is not subject to it, and it can remit after-tax profits to its head office without withholding tax.
Estimated timeline
The whole process should take about 6 to 10 weeks.
Post-incorporation compliance
a. Export/import registration. Businesses must apply to the International Trade Administration, MOEA (formerly the Bureau of Foreign Trade) to register as importers or exporters in Taiwan. After approval, an import/export license will be issued. In some cases, additional permits or certifications, such as product-specific permits or certificates of origin, may also be required. Violations can result in fines, penalties, or disruptions to operations.
b. Work permit application. If the company intends to employ foreign nationals, it must apply for work permits through the Ministry of Labor. The process generally requires proof of sufficient paid-in capital, employment contracts, and supporting documentation of the employee’s qualifications.
c. Trademark registration. Companies may register their trademarks with the Taiwan Intellectual Property Office to secure brand protection in Taiwan.
d. Copyright and patent registration. To protect intellectual property, companies may file copyright or patent applications with the Intellectual Property Office.
e. VAT filing every two months. After the branch setup, it needs to register for VAT with the local tax authority. VAT returns are filed every two months, and failure to submit on time can result in penalties.
f. Accounting and daily bookkeeping. All companies in Taiwan are required to maintain proper accounting records in accordance with accounting principles.
g. Annual company income tax filing. Either the company or the branch needs to file annual corporate income tax returns with the National Taxation Bureau, typically due by the end of May for the preceding fiscal year. The return must include audited financial statements if revenue exceeds statutory thresholds.
h. Head office decisions and change registration. A branch does not hold its own shareholders’ meetings. Changes such as a new branch manager, an increase or decrease of the operating fund, or a new address are decided by the head office and must be registered with MOEA.
i. Employee health insurance and labor pension enrollment. Employers are required to register employees for National Health Insurance and the Labor Insurance program, as well as contribute to the Labor Pension Fund.
j. Payroll calculation, compliance, and submission. Employers must calculate and withhold income tax, labor insurance, health insurance, and pension contributions from employees’ salaries each month. Payroll reports must be submitted to the relevant authorities on time.
k. Human resource management. This includes establishing employment contracts, maintaining employee records, and ensuring compliance with Taiwan’s labor laws and regulations.