Forming a local company - process


#21

I think it's easier to set up a rep office now than it was when Llary did it. If you are a chief rep, you then have what you need to stay and work here, I would think.

You might want to ask him - Llary, that is.

I have heard OK things about Jus Regal, however I have not used them myself yet.

I do not think the regulations are especially onerous here, however a better account might have helped.

The money you put in can always be taken out as salaries over time.


#22

Taiwan does not have the idea of a sole proprietor in the way that the UK does, a 行號 would be more closely translated as a shop license or trading license. There is a simplified flat rate of tax and it's a way for very small enterprises to operate legally. Foreigners are perfectly entitled to set one of these up but you can't get an ARC or work permit. Sorry I didn't see your post before you went and set everything up first :doh:


#23

A lot of shysters here: lawyers; estate agents; accountants; builders....

Are there any tradesmen or professional services people here who actually know what they're doing?

Is there any chance of compiling a list of accountants or lawyers who have actually set up limited companies for foreigners and got them work permits for them?

I mean I've heard a lot about this Ann Hu, who charges international law firm rates. Anyone used her? If she actually knows what she's doing and has successfully done it before she might be worth the huge fees she charges.


#24

Lord Lucan buddy, the root of your frustration is that you are going to CPAs for immigration advice which is like asking a baker to whip you up some pork chops.

For a while I listened to the prevailing advice that it was impossible to set up business or deal with government unless you had a CPA with guanxi etc. etc. The fact is that's a load of crap and it's incredibly easy to do all this stuff on your own and a CPA is probably going to give you more headaches than if you just deal with MOEA and the NIA directly.

The capital requirement of $500,000 is not to incorporate your company - that is the minimum capital stipulated in order to apply for an alien manager's work permit when the company has been established less than 1 year. After 3 years you will need to prove an average of $3m/year turnover in order to maintain your work permit.

A Taiwanese company can be incorporated by Taiwanese or foreigners alike with only $50,000 capital, but in that case you will not be permitted to apply for any work permits. It's just like how you can set up a limited company in the UK with no capital but if you want to get a visa based on your investment you will have to prove that you invested x amount and employed y British staff.

You can take your capital out immediately as salary as long as it is declared on your tax return.

If you absolutely have no way to meet the minimum capital or sales requirement and don't need to make any sales in Taiwan then you can see my detailed thread on establishing a Rep. Office. Someone smart who likes the sound of a rep. office but only has $50,000 capital and still wanted to legally make sales within Taiwan might carefully re-read my fourth paragraph above and see if a light comes on.


#25

You can own a company but you can't legally work there unless the company is listed on your ARC. The same applies the other way around - you can't work as a teacher on your investor ARC. I'm sure it is technically/legally possible to get both companies listed on your ARC but I don't know anyone who has done so and setting legal precedents is not for the faint hearted.


#26

Llary, read your guide and it was very helpful. Couple of questions:

If you open a representative office in Taiwan, what is deemed to be work? Do you have a link to MOEA?

Also if you have an ARC already and register the representative office in your name, is it assumed by Taiwan Immigration that you are doing some kind of work here?

If you open a representative office in Taiwan, can you open a local bank account and use it to make payments to local staff and suppliers, or does all of this have to happen from overseas? I did a google search for "representative office in China" and they were quite clear about what constitutes a representative office, and also what those representatives are able to do.
TIA


#27

The legal issue with a rep. office is not whether or not you can work (since of course you will be working for your parent company as representative in Taiwan) but what work you can do. For example, you can't set up a rep. office then proceed to work as a plumber or car mechanic or teacher under that ARC. A rep. office is designed as a legal way for a foreign company to have a 'go-between' in Taiwan. It's great for importers, exporters etc. but no use for storefronts etc.

There is no such reporting that I know of between MOEA and NIA. However there is no point setting up a rep office unless you want an ARC from your company and a rep. office setup allows you to do what you need. If you just want a company while maintaining 'gray' visa status then you are better off with a regular Taiwanese company (企業社).

Yes, you can open a bank account in the name of your rep. office. Your rep. office can employ (local) staff and NHI/insurance works just like a regular company. Your parent company can remit funds to the rep. office for paying its staff and generally maintaining the office.

Your rep. office is not able to issue invoices which restricts what you can do. For example if you buy widgets in Taiwan and sell to the USA, you would have a parent company in the USA which buys directly from the Taiwanese supplier. As representative you can sign all the contracts, check product quality, handle export documentation etc. but you would not be able to sell those widgets on to local companies or individuals.


#28

Can anyone help with a question about dependents' visas? I've read both this and the rep. office thread through (thanks for all the useful information!) but I couldn't find the subject of dependents mentioned.
My husband has had his own limited company for many years here in the UK and works as a consultant in the IT world internationally, so it seems to me we have a choice about whether to set up as a rep. office or to move his company to Taiwan. But where does that leave me and our boy? Can we piggy back on his ARC or do we have to apply for visas independently.
I don't mind applying for a student visa or I could even work as an English teacher (experienced & qualified) but I'd rather not be forced into either option. Also, we need an ARC in order to enrol our boy in an international school before we arrive, so really we need to do it all from here, ahead of arrival.
Any suggestions please?


#29

Heh. When I went to the Investment Commission to cancel my investment the guy was like "weren't you here a couple of months ago?"

I explained to him my accountant got it wrong and he said "well I could have told you that!"

Say no more!


#30

So, if i have the $500k NT investment, but I really dont need that much for what I am thinking about opening (a franchise juice/tea stand), can I just have the money in a Taiwan bank in Canadian dollars to show the govt that I have the backing.

I was thinking about buying a condo in Taiwan, and would need the money afterward.


#31

You need to send the full NT$500k equivalent in foreign currency and have it verified. Not sure whether the limited company you will set up can buy property.


#32

If your husband gets an ARC via his role as Rep, his spouse and kids can simultaneously get dependent ARCs. Our family submitted all our ARC applications at the same time when the head of household took up as Rep of a newly formed rep office. No issues for dependent ARCs.


#33

That's great news. Many thanks for your reply.


#34

I've been looking into the different methods of company formation for a while and because I'm pretty busy at the moment & out of the country a lot, I think I'm going to hand the whole thing over to a CPA. Names that have been recommended to me or seem to have good reviews on this forum are Anne Hu, Vincent at Jusregal, Lucy Ho at PWC and James Lin at CLin. Obviously I expect those at the bigger, more recognized companies to be more expensive, but it seems unclear whether this means I'll get any better or speedier service or results. So I just wanted to know if anyone has any advice or feedback on any of the above (or anyone else they'd recommend / steer clear of). Also, as the office will be based in Kaohsiung, does anyone have any CPA contacts here? I've heard it's easier to get things done in Taipei, but potentially cheaper and less hassle to get them down down here .... Finally , as well as the costs incurred forming the company and getting ARCs on this basis (can I get two ARCs for a limited copmpany?) does anyone have an idea of what I might expect the monthly costs for accounting etc to come to.
Many thanks for any advice. :slight_smile:


#35

I used Vincent and so did a friend of mine and we were both very happy with the service he provided. He was quick, he knew where to go for any additional bits needed and he doesn't over charge unlike some of the more "recognized" companies as you put it...


#36

vincent seems to get thumbs up from a number of folk so i think i will proceed with him. thanks ...


#37

I have set my foreign-invested limited company up and for Taipei City from Feb 2010 the amount required is NT$500k to ensure a work permit (your company hires you) and yes you do have to show turnover of six times the investment amount when it comes to renewing your ARC. For me that means turning over NT$3m in the first year. The accountant should be able to help there if you think you might not generate that much turnover. Ahem. I mean, basically you have to issue that many Fa Piaos and pay tax on that amount.

My accountant charged NT$18k from start to issuance of work permit and tax registration, plus disbursements (fees charged by the government, a couple or three thousand). My work permit is for 15 months, oddly. I employ myself as a foreign manager. That's about it. If you don't need a work permit, you can just set up a Taiwanese Ltd Co which is of course easy and cheap. By this I mean a non-foreign-invested company.

The sequence I went throught was basically:

  1. Go the the Immigration Place (15 Guangzhou Jie) and get your foreigner ID number (Tongyi Zhenghao). Make sure this paper has your Chinese name on it as you will need to prove you are in fact Mr Bing Bang Bong the Fuzeren because all the documents below are in your Chinese name and they do not print your full passport number on the FIC letter for security reasons.

  2. Accountant applies to check company name is available

  3. Accountant applies to Foreign Investment Commission (Toushen Hui) for permission to set up company

  4. FIC says OK and you take this letter to a bank and open an account, a preparatory account for receiving foreign investment funds. (a "chou bei chu")

  5. You send the money into the account. The money must be in a foreign currency. You must send the full amount.

  6. The bank verifies this and you take the verification to the FIC who issue another letter. Note the bank will send back to origin any amount that goes above NT$500k (the allowed amount). This will cause confusion at the bank. If you send the US dollar equivalent of NT$500,001, they will (and must by law) send the NT$1 back whence it came and may charge you for the privelege. Bonkers, eh?

  7. You take this second letter to Taipei City govt and set up your company just as if it were a Taiwanese company (although it will be registered there as a Foreign Invested Enterprise).

  8. Taipei City govt issues a letter which you take to the bank and they normalise your bank account. This letter will state that you are the Fuzeren, the sole investor, and the sole director, and that it is a one-person company, and it will state that the capital is fully paid-up.

  9. The accountant applies for your work permit.

  10. You get your work permit. I needed to submit a photocopy of my university degree. Don't think just coz you're an investor you'll get an ARC as a Foreign Investor. You need to invest over US$200k for that! (And you won't need a work permit, the permission to reside in Taiwan will be from the Foreign Investment Commission not the Council of Labour Affairs and will be stated in the FIC letter. If this applies to you just have your butler drive the Rolls down to the cop shop and they'll ARC you up.)

  11. [can also be done after stage 8] You go to the tax office, sign something, and buy some Fa Piaos. The accountant will handle this. I just sat there looking like a pint of Guinness.

12.You go to the Immigration Chaps again and apply for an ARC. I haven't actually done this yet, but I've got until my visa runs out anyway.

That's about it. My accountant did it all and I only appeared to sign pieces of paper at (1), (3), (6), and (11).

There are no more Business Registration Certificates. Taipei City government stopped issuing them in Feb 2010. They are no longer necessary. What you get now is a letter, with a red stamp, which contains a page (printed off the internet) listing the registration details held on the database. It is intended that people who wish to check your company (bank, suppliers, govt) will look it up on a special website. This can cause confusion amongst people who expect to see a big yellow certificate or a Company Registration Number. The only number now is your Tongyi Bianhao. Astonishingly, many modern cash registers and EPOS systems check this number to see if it's genuine. If you make a mistake with your number the till will reject it!

I am now the Fuzeren and Managing Director of a limited company in Taiwan with a correct and valid work permit. It was actually quite simple.

If anyone wants the name of my accountant please pm me. He is an ROC and US CPA and speaks English and has a proper registered accountancy practice.


Possible to accumulate 5 years residency in Taiwan and get citizenship without working?
#38

Hi Lord Lucan, what are the requirements in applying in the Foreign Investment Commission? Thanks


#39

@hirobo moeaic.gov.tw/
you can check out their English website. Click on the icon (Foreign Investment Service Area) on the bottom left corner.


#40

Not sure. My accountant did it. Basically they have to approve a foreigner setting up a foreign-invested enterprise here. They look at business scope and investment amount, I think. This is not the sort of thing I thing one can do without an accountant. As far as I can tell you have to be a foreigner, bring in the money from abroad, and have a certain business scope that is allowable for foreign investment.