Setting Up Your Business

Getting Started – Government Agencies and the Business Registration Process

As foreign-invested enterprises can take many forms, different government agencies can be involved in authorizing and administering various aspects of the business registration process.

The Department of Investment Services (DOIS, formerly IDIC) (http://www.dois.moea.gov.tw) under the Ministry of Economic Affairs (MOEA) is the main agency responsible not only for promoting and facilitating investment in Taiwan but also for coordinating with other government agencies and business and trade associations to assist investors with their investment projects.

As an investment project moves into the formal business establishment phase, two other
MOEA agencies are involved in the approval and registration process of a foreign-invested business: the Investment Commission and the Department of Commerce. The Investment Commission (http://www.moeaic.gov.tw) is responsible for reviewing and approving all foreign investment projects in Taiwan and is always part of the initial steps in establishing a business presence in Taiwan. The Department of Commerce, on the other hand, is responsible for coordinating all business name pre-screening and reservation applications prior to applying for formal permission to invest and establish a business entity in Taiwan. It also handles the business registration process for all branch offices and representative offices as well as company (subsidiary) and sole proprietorship registration for investments of NT$100 million or greater.

Depending on the nature of the proposed business, other MOEA government agencies may be involved in approval and registration procedures include the Industrial Development Bureau (http://www.moeaidb.gov.tw), Bureau of Foreign Trade (http://www.trade.gov.tw), and other specialized industry promotion offices. Of special note are the Export Processing Zone Administration (http://www.epza.gov.tw) and the Science Park Administration (http://www.sipa.gov.tw), which function as the main coordinating agencies for investments and business establishment procedures within designated export processing zones and science parks respectively.

Recently, a business registration and clearinghouse platform has been established by the Ministry of Economic Affairs to bring many of the application procedures online into a single website: http://gcis.nat.gov.tw/index.jsp. Although still in the process of integrating what had originally been independent application processes and procedures, this website aims to serve as a single-window interface for commercial and industrial business registration and administration.

For smaller business operations, once business name pre-screening and reservation and investment approval has been completed with the Department of Commerce and Investment Commission, the remaining business registration/licensing procedures are generally handled at the local government level.

In the Establishing a Business Entity section below, each major step required to establish the four main types of business entity is described in detail, including specific application procedures, required documents, government agency contact information and fees (if any).

Business Location and Zoning Considerations

As in most developed countries, regulations and restrictions apply to where certain kinds of businesses can be established or where certain types of business activities can be carried out. Information provided in the Establishing a Business Entity assumes that an appropriate business location has been selected. Some zoning related information has been provided, however, in the Special Industries section below.


Negative List

Although Taiwan has liberalized most areas of its economy and has opened its industries to foreign investment, the following industries are still closed to investment by foreign nationals and overseas Chinese or are subject to restriction.

Prohibited Industries include those industries that may negatively affect national security, public order, or public health, or industries prohibited by law, e.g., agronomics, husbandry, fishing, and hunting, postal service, broadcasting and television.

Restricted Industries include certain industries in which investment by overseas Chinese or foreign nationals must be approved by the authorities, e.g., power supply industry, securities, and futures.

The Investment Commission maintains a list of prohibited and restricted industries on its website (http://www.moeaic.gov.tw).


Special Industries

The following Establishing a Business Entity section addresses the registration procedures for establishing a business presence in Taiwan. For businesses involved in special industries, however, other restrictions and regulations may apply. The following is a brief overview of four special industries: telecommunications, environmental consulting/engineering, pharmaceutical and medical equipment distribution, and capital markets.

The telecommunications industry is divided into Type I and Type II areas. Type I includes fixed-line telecom network service, mobile network service and satellite telecom network services and has a cap of 60% foreign investment. Type II includes network-based voice, database and video transmission services and has no foreign investment cap. Type I and Type II operator licenses are issued by the Ministry of Transportation and Communications (http://www.motc.gov.tw).

Environmental Consulting companies must obtain a special permit for environmental consulting services. Environmental engineering companies, in addition to having qualified environmental engineering personnel, must comply with waste handling/management laws and regulations as well as local zoning regulations. Permits are issued by the Environmental Protection Administration (http://www.epa.gov.tw) and local environmental protection bureaus.

Pharmaceutical and medical equipment distributors must meet several requirements to legally distribute pharmaceuticals in Taiwan. For pharmaceutical distribution, applications must be made by a qualified pharmacist (for the distribution of Traditional Chinese Medicine, a qualified TCM pharmacist must make the application). A special permit is also required for medical equipment distribution, the application for which must include information on the office or store of the distributor. The Department of Health (http://www.doh.gov.tw) regulates these areas of business and issues the related permits.

Capital Markets
Securities investment fund companies and securities investment advisory/management firms can establish businesses entities in Taiwan but must apply for special permits requiring detailed information regarding the proposed business. To obtain such a permit, the business must meet shareholding, management, and capitalization requirements. The Ministry of Finance (http://www.mof.gov.tw) is in charge of issuing such permits.


Residency and Work Permits

Being the responsible person of a sole proprietorship does not automatically confer a foreign national with the right to reside or work in Taiwan, as such rights are contingent upon the investment amount and/or immigration status of the foreign national. Please refer to the section Visas, Residency and Work Permits for more information.


Establishing a Business Entity

The following are the most commonly established entities for foreign investment in Taiwan:

‧ Branch Office
‧ Company (Subsidiary)
‧ Representative Office
‧ Sole Proprietorship

Deciding which type of business entity to establish in Taiwan should be made with reference to the scope and activities of the proposed business and the legal and taxation implications for investors.  A Taiwan-based law and/or accounting firm may be helpful in determining the best option for your investment project. Of note, joint ventures are not juridical entities in Taiwan, which are generally formed as a jointly owned company to carry out the business of a joint venture. And although other kinds of entities (see notes at the end of this chapter) aside from the four listed above may be formed, this guide focuses on the four types of entities listed above and the establishment procedures for each.

Branch offices and companies (subsidiaries) are most commonly formed as either a limited company or a company limited by shares. A limited company is a company organized by not fewer than five nor more than 21 shareholders; each shareholder is liable for the company in an amount that is limited to the amount of contributed capital. A company limited by shares is a company organized by seven or more shareholders with the total capital of the company being divided into shares and each shareholder being liable for the company in the amount of the shares subscribed. The two other classes of company are an unlimited company and an unlimited company with limited liability shareholders.

Note on application language and documentation verification:  All applications must be completed in Chinese and documentation written in a foreign language (i.e. not Chinese) should attach a Chinese translation. In some instances, documentation in English may be accepted. Notarization and/or verification of documents by the Taiwan, ROC consulate in the applicant's home country is also often required. Such requirements are indicated in the procedures described below.

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