Starting a business in Taiwan: accessing innovation and excellence in Asia

Foreign investors commonly establish either a limited company (youxian gongsi, LLC) or a company limited by shares (gufen youxian gongsi, CLS), depending on the size of the business, ownership structure and future financing plans. Both structures offer limited liability and generally permit 100% foreign ownership in sectors without specific restrictions.

LLCs are often suitable for small and medium-sized businesses because of their simpler governance requirements, while CLSs provide greater flexibility for businesses with multiple shareholders or plans to raise capital.

A limited company must appoint between one and three directors, who must be shareholders. A CLS generally requires at least three directors, although certain companies may appoint one or two directors without establishing a board. Supervisory requirements also depend on the company's structure.

Taiwan generally does not prescribe a statutory minimum share capital for either structure, although the proposed capital must be sufficient for the intended business activities and any applicable licensing requirements. Foreign companies may also establish a branch, but the overseas parent remains fully liable for its obligations.

Every foreign investment requires prior approval – and the source of capital matters.

Foreign investors establishing a Taiwanese subsidiary generally require prior investment approval from the Department of Investment Review (DIR) under the Ministry of Economic Affairs (MOEA). Approval may also be required for subsequent changes to foreign investment or ownership arrangements.

Certain industries are subject to restrictions under Taiwan's Negative List for Investment by Overseas Chinese and Foreign Nationals. These include specified activities in telecommunications, broadcasting, aviation and defence, where foreign ownership may be prohibited, limited or subject to additional regulatory approval.

Investments involving ownership or control from the Mainland of China are governed by a separate regulatory framework. These rules may also apply to companies incorporated elsewhere where Mainland Chinese investors hold more than 30% of the shares or capital, directly or indirectly, or otherwise exercise control.

Receiving foreign investment approval is an important stage of establishing a Taiwanese subsidiary. Investors can generally reserve a company name and confirm their proposed business activities before applying for approval.

Once approval is granted, investors typically open a preparatory bank account, remit the proposed capital and complete capital verification before registering the company with the relevant authority. Tax registration and any additional industry-specific permits must also be addressed before commencing the relevant business activities.

Straightforward investment applications may be processed within several business days, although the overall incorporation process can take several weeks. Applications involving restricted industries, complex ownership structures or additional regulatory approvals may take longer.

Businesses intending to hire employees must also arrange the applicable Labour Insurance, National Health Insurance and labour pension registrations as part of their post-incorporation obligations.

Taiwan operates a government-regulated uniform invoice system. Businesses required to issue Government Uniform Invoices (GUIs) must comply with prescribed invoice formats and reporting requirements, with electronic Government Uniform Invoices (eGUIs) widely used.

Each uniform invoice carries an authorised serial number, and businesses using electronic invoices must comply with the Ministry of Finance's applicable technical and reporting requirements. However, paper invoices remain permitted in certain circumstances, and exemptions or alternative arrangements apply to some businesses.

Foreign investors should assess their invoicing and business tax registration obligations before commencing operations. Accounting systems may need to be configured to meet Taiwan's invoice issuance, reporting and record-keeping requirements.

Taiwan's standard corporate income tax rate is 20%, while value added tax (VAT) generally applies at 5%. Dividends paid to non-resident corporate or individual shareholders are generally subject to 21% withholding tax, potentially reduced under an applicable double taxation agreement.

Resident companies may also be subject to a 5% surtax on qualifying undistributed earnings. This makes profit distribution an important consideration for foreign-owned businesses, particularly those intending to retain earnings for future investment. Branches of foreign companies are generally not subject to this surtax.

Foreign investors should also consider how their chosen business structure affects profit repatriation. Unlike subsidiaries, branches can generally remit after-tax profits to their overseas head offices without additional withholding tax.

Foreign nationals employed in Taiwan generally require appropriate work authorisation and, where residing in Taiwan, an Alien Resident Certificate (ARC). Standard employment arrangements usually involve an employer-sponsored work permit linked to a specific position, although exemptions and alternative arrangements are available.

Employers must also register eligible employees for Labour Insurance, National Health Insurance and Taiwan's Labour Pension system, making the required statutory contributions.

For highly skilled professionals, Taiwan's Employment Gold Card provides a more flexible alternative. Combining an open work permit, resident visa, ARC and multiple re-entry permit into a single document, it allows eligible individuals to work for different employers or establish their own businesses without employer sponsorship.

Applicants may qualify through recognised professional achievements, experience or applicable salary criteria, depending on their field. Eligible Gold Card holders may also benefit from preferential income tax treatment for a limited period, subject to statutory requirements.

A limited liability company (LLC) is a separate legal entity in which shareholders' liability is generally limited to their invested capital. There is no statutory minimum capital requirement, although the company must maintain sufficient capital for its proposed operations. In Taiwan, an LLC must have at least one shareholder and one director, who can be of any nationality. Foreign investors can generally wholly own a Taiwan LLC, although certain sectors remain subject to foreign ownership restrictions. Foreign investment approval from the MOEA is also typically required before capital can be injected into the company.

Often referred to as a joint-stock company in other jurisdictions, this structure is typically used by larger enterprises or businesses seeking investment from multiple shareholders. A CLS is a separate legal entity in which shareholders' liability is generally limited to the amount of their subscribed shares, and shares may generally be transferred more freely than in an LLC structure. There's no mandatory minimum paid-up capital requirement, although certain regulated sectors may impose specific capital thresholds.

In Taiwan, a CLS generally requires at least two shareholders, though a single corporate shareholder may also form one. It's subject to more formal governance requirements than an LLC, including the appointment of directors and supervisory functions. Companies may additionally adopt a closely held company structure, which caps the number of shareholders and allows share transfers to be restricted – this may suit SMEs or family businesses wanting tighter control over ownership. Standard CLSs (not closely held) generally allow greater flexibility in bringing in new shareholders and are better suited to businesses planning to raise outside capital or potentially go public.

A branch office allows a foreign company to operate in Taiwan without incorporating a separate legal entity. It's considered an extension of the parent company, which remains fully liable for the branch's obligations. A branch office is often used for project-based or initial market entry operations and must be registered with the MOEA. While there's no minimum capital requirement, the branch is generally subject to Taiwanese corporate tax (profit-seeking enterprise income tax) on its profits and must appoint a manager who is resident in Taiwan.

A representative office may be established for non-commercial purposes. Its activities are generally limited to market research, promotional activities and coordination with customers or partners. It can't conduct commercial transactions or generate revenue in Taiwan and is therefore generally not subject to Taiwan's profit-seeking enterprise income tax. As a result, it's commonly used by foreign companies exploring the Taiwan market before committing to full incorporation.

A 'free zone company' in Taiwan isn't a separate legal entity type, but rather a standard Taiwanese company such as an LLC that's authorised to operate within one of Taiwan's designated free trade zones. Free zone companies may benefit from 100% foreign ownership, customs duty exemptions, modern infrastructure and sector-focused support.

If you are exploring expansion into Taiwan, we can help identify a structure suited to both your immediate requirements and future direction. View our 'at a glance' comparison table outlining key information on different company formation options.

Taipei is Taiwan's capital and principal commercial centre, attracting foreign investment across financial services, technology and professional services. It is home to the headquarters of major financial institutions, the Taiwan Stock Exchange and numerous multinational companies.

The Xinyi District serves as Taipei's central business district, offering premium office space and access to established financial and corporate networks. Neighbouring Neihu and Nangang have developed into important technology and research hubs, attracting software, electronics and technology-related businesses.

Located around 70 kilometres south-west of Taipei, Hsinchu is a leading centre of Taiwan's semiconductor industry and one of the world's major technology clusters.

At its heart is Hsinchu Science Park, established in 1980 and home to Taiwan Semiconductor Manufacturing Company (TSMC), MediaTek, United Microelectronics Corporation (UMC) and hundreds of businesses involved in semiconductor design, manufacturing and related technologies.

The concentration of engineering talent, specialist suppliers and research institutions makes Hsinchu an attractive location for businesses operating in semiconductors, integrated circuits and advanced materials.

Taichung is a major commercial and industrial centre in central Taiwan and the island's second-largest city by population. It has established strengths in precision machinery, machine tools, aerospace components and bicycle manufacturing.

The Central Taiwan Science Park has also attracted investment in semiconductors, optoelectronics, precision equipment and biotechnology, complementing the city's manufacturing base.

Together with Taichung Port and road and rail connections linking northern and southern Taiwan, the city offers opportunities for manufacturers and logistics businesses serving domestic and international markets.

Kaohsiung is a major economic centre in southern Taiwan and home to Taiwan's largest international port. Traditionally associated with steel, petrochemicals and shipbuilding, the city has increasingly attracted investment in advanced manufacturing and semiconductors.

Investment by TSMC and other technology companies is also supporting Kaohsiung's development as a centre for advanced semiconductor manufacturing.

The Southern Taiwan Science Park includes major sites in Tainan and Kaohsiung, supporting semiconductor fabrication, optoelectronics, precision manufacturing and biotechnology.

Taiwan offers several types of designated industrial and economic development zones. Two important options for foreign investors are science parks and free trade zones, which support different business activities and investment objectives.

Taiwan's three main science park systems, Hsinchu Science Park, Central Taiwan Science Park and Southern Taiwan Science Park, provide dedicated environments for research, development and advanced manufacturing.

Overseen by the National Science and Technology Council (NSTC), these parks support businesses operating in semiconductors, optoelectronics, precision engineering, biotechnology and other technology-intensive industries.

Companies operating within the parks benefit from dedicated infrastructure, research partnerships and administrative support. Eligible businesses may also access tax incentives for qualifying research and development or strategic technology investments, subject to applicable requirements.

Admission is subject to approval, with applicants required to demonstrate that their proposed activities meet the relevant science park requirements.

Taiwan operates seven free trade zones at six seaports and one international airport: Kaohsiung Port, Keelung Port, Taichung Port, Taipei Port, Anping Port, Suao Port and Taoyuan International Airport.

These customs-controlled areas allow qualifying goods imported from overseas to be stored, processed or re-exported without incurring customs duties or business tax. Applicable taxes and duties generally arise when goods enter Taiwan's domestic taxable area.

The zones primarily support international trade, logistics and export-oriented manufacturing, with tax incentives available for qualifying activities.

Each zone serves different commercial needs. Kaohsiung supports container shipping and industrial logistics, while Taoyuan International Airport accommodates high-value and time-sensitive cargo. Taichung serves manufacturing and distribution activities, Keelung supports port-related logistics, and Taipei Port handles vehicle shipments and other international cargo.

Our team at Hawksford can provide guidance and assist you in identifying the most appropriate location for your Taiwan business, taking into account your sector, investment objectives and operational requirements.

Businesses entering Taiwan from different markets may benefit from existing trade relationships, industry partnerships and investment arrangements. Below are some key considerations for international investors.

Although the United Kingdom (UK) and Taiwan do not maintain formal diplomatic relations, they have established commercial ties supported by the British Office Taipei and the Taipei Representative Office in the UK. A double taxation agreement has been in force since 2002, while the UK-Taiwan Enhanced Trade Partnership supports cooperation in investment, digital trade, and energy and net zero.

Taiwan offers UK businesses access to an established technology and manufacturing ecosystem and a skilled workforce. The British Chamber of Commerce in Taipei (BCCT) provides business networking and market support, while Invest Taiwan assists overseas investors with investment procedures, site selection and information on available incentives.

Entry approach: UK businesses in financial services, software, consulting and regional management may consider Taipei for its established international business community. Companies involved in semiconductors, advanced engineering or research and development may also consider Hsinchu, which provides access to Taiwan's semiconductor manufacturing and supplier networks.

The European Union (EU) is Taiwan's largest source of foreign direct investment, with European companies maintaining a significant presence in advanced manufacturing, technology, life sciences, financial services and renewable energy. Most European governments maintain relations with Taiwan through representative offices rather than formal diplomatic missions.

Germany has an established commercial presence in Taiwan, supported by the German Trade Office Taipei (AHK Taiwan). The Netherlands also plays an important role in Taiwan's semiconductor industry through companies such as ASML, which supplies advanced semiconductor manufacturing equipment. European engineering and technology companies have established manufacturing, research and technical support operations in Taiwan to serve regional and global supply chains.

Invest Taiwan provides guidance on investment procedures, site selection and available incentives, while the European Chamber of Commerce Taiwan (ECCT) supports business networking and engagement with local authorities.

Entry approach: European semiconductor, electronics and precision engineering businesses may consider Hsinchu Science Park or Central Taiwan Science Park, depending on their operational requirements. Taipei is also an established location for financial services, consulting and regional headquarters.

Taiwan has strengthened its economic relationships with Southeast Asia through the New Southbound Policy and efforts to diversify regional trade and investment. Singapore is an important commercial partner, supported by the bilateral Agreement between Singapore and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu on Economic Partnership (ASTEP), which entered into force in 2014.

For ASEAN businesses, Taiwan offers access to advanced manufacturing capabilities, established electronics supply chains and a skilled technical workforce. Invest Taiwan provides support to overseas investors, while Taiwan's representative offices across Southeast Asia can offer information on investment opportunities.

Entry approach: ASEAN manufacturers, exporters and logistics businesses may consider Kaohsiung for its international port and shipping connections. Companies involved in electronics, semiconductors and advanced manufacturing may also explore Hsinchu or the Southern Taiwan Science Park, depending on their sector and supply chain requirements.

Taiwan maintains extensive commercial links with Hong Kong and Mainland China. Cross-Strait trade operates under World Trade Organisation (WTO) rules and arrangements including the Economic Cooperation Framework Agreement (ECFA), although preferential tariff treatment was suspended for certain products in 2023 and 2024.

Investments involving Mainland Chinese ownership or control are governed by a separate regulatory framework, with additional approval requirements and sector-specific restrictions. These rules may also apply to businesses incorporated outside the Mainland of China where Mainland Chinese investors hold more than 30% of the shares or capital, directly or indirectly, or exercise control.

Hong Kong businesses that do not fall within Taiwan's Chinese Mainland investment criteria generally follow the foreign investment rules applicable to other overseas investors. Businesses with complex ownership structures should assess their eligibility and applicable approval requirements before proceeding with an investment.

Entry aproach: Manufacturing and logistics businesses may consider Kaohsiung or Taichung, both established industrial centres with access to major transport infrastructure. Technology companies focused on software, trading businesses and regional management functions may find Taipei attractive for its international business services and professional workforce.

The United States (US) and Taiwan maintain strong commercial relations through the American Institute in Taiwan (AIT) and the Taipei Economic and Cultural Representative Office (TECRO) in the US. Cooperation spans technology, advanced manufacturing, life sciences and semiconductor supply chains.

Economic ties have also been supported by the US-Taiwan Initiative on 21st-Century Trade, whose first agreement entered into force in December 2024. In February 2026, the two sides signed an Agreement on Reciprocal Trade covering tariff measures, market access and investment cooperation.

American companies have established significant operations in Taiwan, while AmCham Taiwan provides business networking, advocacy and market information for companies operating in the market. Businesses should check the latest implementation status of bilateral trade measures before making investment decisions.

Entry approach: US technology, software and professional services businesses may consider Taipei for its established business infrastructure and workforce. Semiconductor, electronics and advanced manufacturing companies may also consider Hsinchu Science Park, which provides access to Taiwan's semiconductor manufacturing and supplier networks.

Setting up a business in Taiwan involves a range of costs that vary depending on the entity structure, industry and scale of operations. Companies establishing operations in major business centres such as Taipei or Kaohsiung may also encounter differences in office rental and operating expenses. Once we understand your plans, we can walk you through the expected costs of expanding into Taiwan.

• Registration and incorporation fees: Costs associated with company registration with the MOEA and related local authority filings.

• Capitalisation requirements: While Taiwan does not impose a fixed minimum capital requirement for most company types, shareholders must determine an appropriate capital amount for the proposed business activities. In practice, a certified public accountant must verify that the injected capital is sufficient to support the company's planned first-year operations before registration can be finalised. The funds are typically transferred into a preparatory Taiwanese bank account prior to capital verification.

• Foreign investment approval: Foreign investors typically require approval from the DIR before capital can be injected into a Taiwanese entity. Preparing and submitting this application may involve administrative and advisory costs.

• Tax and labour registrations: Companies must register with the tax authorities for corporate income tax and, where applicable, business tax purposes. Employers must also enrol employees in Taiwan's mandatory labour insurance and national health insurance schemes.

• Visa and work permit costs: Foreign directors, managers and employees may require work permits and residence visas. Applications are generally handled by the National Immigration Agency and the Ministry of Labour.

• Office space rental: Commercial rental costs vary significantly depending on location. Taipei's central districts generally command higher prices, while industrial parks and regional cities may offer more cost-effective alternatives.

• Professional fees: Costs for engaging professional advisers, including legal counsel, company formation specialists, tax advisers, payroll providers and accounting firms.

• Other potential costs: Additional expenses may include document translation into Mandarin Chinese, banking fees, licensing fees for regulated industries and administrative charges associated with government approvals.

At Hawksford, we follow a carefully structured step-by-step process to ensure a smooth, efficient and compliant business set-up in Taiwan, customised to your specific needs and objectives. Our expert team guides you through each stage, minimising potential delays and ensuring a seamless experience.

We typically begin with a detailed consultation to understand your business objectives, operational requirements and longer-term strategy. This allows us to identify an appropriate legal structure and business location while highlighting potential incentives or innovation hubs such as Hsinchu Science Park.

Based on the consultation, we can prepare a tailored set-up strategy covering legal structuring, governance considerations and key regulatory requirements under Taiwanese company law. This stage also considers foreign investment approval and any sector-specific licensing obligations.

We can prepare and review the required incorporation documents, including articles of incorporation, shareholder and director information, foreign investment approval applications and capital verification documentation. We can then coordinate submission to the relevant authorities, including the MOEA.

Following approval of the incorporation documentation, we can handle the required registrations with the relevant authorities, including company registration, corporate income tax and business tax registration, as well as labour insurance and national health insurance registration where applicable. Industry-specific licences or approvals may also be arranged where required.

We can assist with opening a corporate bank account and coordinate with Taiwanese financial institutions to complete capital verification and compliance checks. Most banks may require in-person appointments for account opening, with local representation often necessary for foreign entities. The process can also involve extensive Mandarin Chinese documentation, making early preparation important.

If required, we can help with finding physical office space, office set-up logistics and other essential services for your business operations.

Beyond incorporation, we can provide ongoing services to help facilitate market entry and operations in Taiwan. This may include support with accounting and tax compliance, covering corporate income tax, business tax registration and filing – including VAT and gross business receipts tax (GBRT) obligations – statutory financial statement preparation and bookkeeping.

Where applicable, we can assist with work permit and residence visa applications for foreign directors and employees through the relevant authorities, including the National Immigration Agency.

The amount of time required to establish a business in Taiwan can differ based on the structure selected and any regulatory approvals needed. We provide clear guidance and realistic timelines for each stage of the process to help ensure efficient planning and execution.

• Chosen legal structure: Incorporating an LLC or CLS generally requires several weeks, while branch or representative office registrations may follow similar timelines depending on the documentation required.

• Industry-specific licensing: Businesses operating in regulated sectors such as financial services, telecommunications or pharmaceuticals may require additional permits and regulatory approvals.

• Foreign investment approval: Most foreign investments require prior approval from the DIR under the MOEA before capital can be injected into a Taiwanese entity. While many applications are processed within several weeks, more complex ownership structures or investments involving sensitive industries may require additional review.

• Document translation and authentication: Foreign corporate documents may need to be translated into Mandarin Chinese and, in some cases, notarised or authenticated by Taiwanese overseas offices. The time needed to prepare and verify these documents can affect the overall set-up timeline.

• Bank compliance procedures: Opening a corporate bank account can sometimes be one of the more time-consuming stages for foreign-owned companies. Taiwanese banks typically conduct detailed anti-money laundering (AML) and know-your-customer (KYC) processes. Where shareholders or directors are based across multiple jurisdictions, banks may request additional documentation.

Having supported businesses expanding across multiple international markets, we understand the practical and administrative considerations involved in establishing operations in a new jurisdiction. For companies entering Taiwan, we can provide guidance and manage the various stages involved in the set-up process.

Where needed, we can also liaise with the relevant authorities and financial institutions to help ensure regulatory requirements are met.

• Initial planning and documentation preparation: Typically 1 to 2 weeks.

• Foreign investment approval: Generally 2 to 4 weeks, depending on the complexity of the investment structure.

• Company incorporation and registration: Usually 2 to 3 weeks following approval.

• Tax and labour registrations: Typically 1 to 2 weeks after incorporation.

• Visa and work permit processing: Commonly 4 to 8 weeks, depending on nationality and employment arrangements.

• Bank account opening and capital verification: Typically 2 to 6 weeks, depending on compliance procedures.

For a more accurate assessment based on your plans, please get in touch with our team.

Businesses are generally required to maintain accurate corporate records and statutory registers. Depending on local requirements, these may include shareholder and beneficial ownership information, director and officer details, constitutional documents and corporate resolutions.

Many jurisdictions also require companies to report significant changes, such as director appointments or resignations, changes in shareholding, registered address updates or share capital amendments, within prescribed deadlines.

Businesses must generally maintain proper accounting records and supporting documentation, with financial reporting and audit requirements varying by jurisdiction.

Tax obligations may include corporate income tax, VAT or sales tax, payroll taxes and social security contributions. Businesses must comply with the applicable registration, filing and payment deadlines.

Depending on the jurisdiction and business activities, companies may need to submit annual returns, confirmation statements, licence renewals or sector-specific reports. Late or inaccurate filings may result in penalties, regulatory action or restrictions on business operations.