Can I do business with Chinese clients with my Taiwan foreign subsidiary office?

So I spent practically 8 months and more money than I care to admit setting up a branch subsidiary office for my company registered in the US. This was seriously the most ridiculously painful task I have every completed in my life and I very much so regret trying to save money and do it all myself. If anyone is thinking of doing the same thing, trust me, just pay someone to do it. The time saved and peace of mind is well worth it.

So I plan to mainly provide B2B rental and upkeep of equipment service to clients. Recently I’ve had some interest from a (mainland) chinese business. I’m trying to figure out what I need to do to make this happen. Can I just sign a contract and bill them using my Taiwan branch office? After going through the painful process of setting everything up the thought of doing it all over again in China is really unappealing. Anyone have any experience or advice? Thanks

[quote=“Leolisk”]So I spent practically 8 months and more money than I care to admit setting up a branch subsidiary office for my company registered in the US. This was seriously the most ridiculously painful task I have every completed in my life and I very much so regret trying to save money and do it all myself. If anyone is thinking of doing the same thing, trust me, just pay someone to do it. The time saved and peace of mind is well worth it.

So I plan to mainly provide B2B rental and upkeep of equipment service to clients. Recently I’ve had some interest from a (mainland) chinese business. I’m trying to figure out what I need to do to make this happen. Can I just sign a contract and bill them using my Taiwan branch office? After going through the painful process of setting everything up the thought of doing it all over again in China is really unappealing. Anyone have any experience or advice? Thanks[/quote]

Saving money is not a bad thing. :slight_smile:

The answer to your questions really depends on the detail of your business, and your question seems to combine lots of issues inside.

Usually an entity shall not do business in one country unless it makes a registration or recognition in that country. For example, the Article 371 of the Taiwan Company Act, “A foreign company may not transact business within the territory of the Republic of China without obtaining a certificate of recognition from the government of the Republic of China and completing the procedure for branch office registration.” Assume you knew this very well since you already have your branch in Taiwan.

Therefore, your question might be restated by whether your branch are doing business in China. If not, it usually might be okay to move forward, unless your business model has something different and very special, which Mainland China take serious care of it.

Of course, to set up a business in China is sometimes complex. Especially, when you have to do the tax report and relevant legal compliance with the local government. Besides, the law and regulations change all the time. However, you may delegate your counterparty to do some tasks for you in the contract or agreement, such as paying tax, complying all relevant regulations related to the business, etc.

You have been through all the procedures in Taiwan. You definitely will survive and overcome another one. Go ahead! :laughing:

Also…branch is different from subsidiary…
these two are kind of contradictive concepts.
Are you sure you have done a branch subsidiary office?

As I understand it, a branch office is simply a legal vehicle for a foreign employee of a foreign-registered company to legally reside and work in Taiwan (on behalf of the original company). It is not a company in the usual meaning of the word. The foreign head office remains The Company. It’s basically a legal workaround for Taiwan’s restrictive immigration laws.

Anyway, any company can transact business with any customer anywhere in the world, unless local statutes specifically forbid it (as, for example, in the case of US companies selling high-tech equipment to countries that might use them for military purposes). Your head office generates the invoice and receives payment. The Taiwan representative office merely seals the deal.

If you do actually have a subsidiary, then I don’t really see what the problem is. Taiwanese companies do business with China all the time. If in any doubt, you can always pass the business back to the head office as you would if you were only operating a branch office.

This isn’t quite correct. They cannot issue invoices, make financial transactions, or provide services within Taiwan. There is absolutely nothing preventing a foreign company from (say) accepting an order from a Taiwanese company, receiving payment in US$, and delivering the final product to the customer’s door. The tricky part is having employees working locally for you - that can’t be done without registering.

[quote=“finley”]As I understand it, a branch office is simply a legal vehicle for a foreign employee of a foreign-registered company to legally reside and work in Taiwan (on behalf of the original company). It is not a company in the usual meaning of the word. The foreign head office remains The Company. It’s basically a legal workaround for Taiwan’s restrictive immigration laws.

A rep office is not for the purpose of getting around Taiwan’s immigration laws although some use it for this purpose with varying degrees of success.

I didn’t really mean that - I was just suggesting it’s the government’s workaround for their own legal structures. If existing laws prevent foreigners from coming here doing business under their own steam (an unintended side-effect - the gov’t does not wish to restrict foreign investment) then you must either force them to set up a local company, or provide some alternative. A representative office is that alternative, and personally I think it’s a good compromise.

[quote=“finley”]
This isn’t quite correct. They cannot issue invoices, make financial transactions, or provide services within Taiwan. There is absolutely nothing preventing a foreign company from (say) accepting an order from a Taiwanese company, receiving payment in US$, and delivering the final product to the customer’s door. [/quote]

hm…can not agree.

“…issue invoices, make financial transactions, or provide services within Taiwan.” -------This is doing business in Taiwan(a country)

“…a foreign company from (say) accepting an order from a Taiwanese company, receiving payment in US$, and delivering the final product to the customer’s door”-------This does not sound like doing business in Taiwan (a country). Instead, it is doing business with a Taiwanese company.

Still have to say it again…If you are not doing business in China, it usually might be okay to move forward, unless your business model has something different and very special, which Mainland China take serious care of it.

Branch ----
Kind of an office or unit of the US(foreign) company in Taiwan.
Only one company exists in this relationship–the US one.
Liability of the branch=liability of the company.
Should get the US company recognized in Taiwan.

Subsidiary----
Usually means a company(or entity) whose shares are held by another company.
Two companies exist.
Liability of the subsidiary not = liability of the holding company, except for the doctrine of piercing the corporate veil.
For the case here, should set up a new company in Taiwan.