Complete Guide to Opening a Rep Office 2011 Update


#1

Preamble

Although this was written a few years ago, it has undergone periodic updates and should still be accurate. Please let me know if you learn otherwise.

First, thanks to fellow board member Llary, without whom none of this would have been possible for me, as well as my friend Vlad who helped me a lot during the process, and the other active posters here on Forumosa, most notably LostSwede.

Basically you can register a rep office all by yourself, in 3 easy steps.

But first some explanation. If you want to get straight to the set up requirements scroll to the next section.

What is a rep office?
A rep office will allow your foreign company to send a person to Taiwan as a representative. This representative has a fairly limited range of permissible activities. They are:

a. Do estimates/give quotes.
b. Do purchasing (but not exporting—that requires a local company).
c. Bid on, negotiate and sign contracts.

Why open a rep office?
a. Easy. You can be set up within a week or two if you’ve really got it together, completely by yourself, and without leaving Taiwan (depending on your country’s company registration system).
b. Cheap. No capital requirements, no minimum revenue, etc., for getting a work permit—unlike a branch office or local company.
c. Simple taxes. You will only have to pay personal income tax as the representative. (Your situation back home will vary–can’t really help you there, but then again, your own gov’t will not necessarily know your company has a foreign office so…)
d. You can apply for your own ARC, which gives you the right to reside in Taiwan for 1-3 years, renewable.

What’s the catch?
As a rep you will not (legally) be able to:

a. Do sales, find new clients.
b. Receive payments in Taiwan (payments would have to be paid to the head office back home, or to another local company in Taiwan).
c. Work. (Unless it’s doing one of the activities mentioned above.)

I think the key thing to understand here is that there is a legal definition of what you can and cannot do. How you conduct yourself is of course your own responsibility. Just don’t be an idiot and do this just to teach English or try to open a night market stand.


How to open a rep office

Step 1: Ministry of Economic Affairs (MOEA)

map: goo.gl/maps/Fsgz

You need to prepare the following and bring it to the MOEA:

1. 申請書 Application form.
Must be filled out 100% by computer. I personally used PDF software called PDF xchange which lets you type on any PDF and print. It might be good to visit the MOEA and get help filling it out, as it’s not clear when to write Chinese and when to write English, etc.

Get this from the MOEA website gcis.nat.gov.tw/doc/com_doc1/Com_a_003.doc [b]

  1. 其他機關核准函[/b](依法應先經目的事業主管機關許可者,應檢附許可文件影本,無 則免送)
    Special permission letter, no need unless you plan to operate in one of these industries: gcis.nat.gov.tw/cod/html/sp_srh_3.html

3. 其公司登記主管機關核發之法人資格證明文件(附中文譯本) Certificate of incorporation of your company back home.

It’s easiest to set up if you have a corporation, there are instances of other forms of company being allowed but it’s best if you set up a proper corporation that is a legal person (法人). If you are from Canada, you can do the whole thing online for 200CND, I’m sure most other gov’ts have similar systems. You could also form a company in a 3rd country like Hong Kong, I hear it’s pretty straightforward, ask in the forum and I’m sure you’ll get some advice.

The certificate must be translated into Chinese. If the original document is in English you may translate it yourself, or get a friend to do it. Other languages will require a certified translator to do it. Confirm with the MOEA first if you want to avoid hassle.

The certificate used to require legalization but this is no longer the case. I still recommend having someone at the MOEA take a look at your certificate or a copy of it as early on as possible to confirm it can be accepted as is, just to be sure.

4. 在中華民國境內指定之訴訟及非訴訟代理人授權書(須經驗證並附中文譯本)
Power of attorney (POA) giving you the right to act as representative, and should state your exact responsibilities as rep, same as I explain in the preamble. This will have to include the full name of the representative in Taiwan, and be signed by a person whose name appears among the company directors, or the company owner.

It will have to be notarized, in Taiwan. Notarization prices are fixed by law: 500NT for Chinese documents. It takes 5 minutes, super simple. 500NT should get you unlimited copies, get 2~3, who knows when you’ll need them.

Search Google for 代理人授權書 to find a POA.

Here’s a very helpful notary near Shi-Da: 陳永星 台北市羅斯福路三段126號4樓之3

5. 在中華民國境內指定訴訟及非訴訟代理人身分證明文件
Your passport, and chops/seals (大小章).

If you don’t have a small personal seal and a Chinese name, get one.

Your company will also require a Taiwanese seal. It must read X商YZ有限公司 where XYZ are:
X: your country name in Chinese
Y: your company name in Chinese (make one up)
Z: 股份 if your company is limited by shares; if not then don’t include anything here

Note 1: Never pay more than 70NT for a chop of any kind. Here’s a place that does laser-cut chops in 5 minutes: g.co/maps/exnqt.
Note 2: At the same time you might as well cut another chop with the word 辦事處 added to the end of your full company name as above. It’s pretty likely you’ll need this when you apply for a tax account. New Taipei City certainly will demand it.

6. 建物所有權人同意書正本(應載明同意提供使用之公司名稱)及 最近一期房屋完 稅稅單(或所有權狀)影本。(建物為公司所有者或檢附租賃契約影本,免附 同意書,仍應附最近一期房屋完稅稅單影本或所有權狀影本)

If you can’t read this, don’t worry, the important parts, which are in bold, are written out at the end of this item.

This part will be the most difficult for most people, although there is no need for it to be hard. You need to find a place to register the office. This can be an office, or your home. Most residential landlords will break into a cold sweat at the mere mention. Here are some options:

a. Sweet talk your present landlord and promise to pay, under contract, whatever increase in tax there might be as a result of registering. You can register as little as 1/6 of the living space as a business, and the tax only increase 1 or 2%, so this should not be a big deal. You will hit a wall if the landlord isn’t paying rental tax on your apartment–very likely to be the case. Same for the fifth floor of 4-story buildings, etc. (加蓋).

b. Raise the issue when finding an apartment–at least here you have some leverage. Sweet talking will still be required. Note: If you register at your place of residence, note that you may receive a visit from tax officials to verify that there is indeed a legitimate work space and that it more or less matches the space declared. This is a gray area, but as with many things in Taiwan, if it looks legit, it’s legit. So it shouldn’t be a problem.

c. Rent a small office. Offices go for as little as 10k per month. Look on 591.com.tw.

d. Use one of the innumerable “services” offered all over Taiwan where you can rent a “space” to register your business for NT$2000-3000 per month. Most ask for 12 months rent upfront, however. No big deal, just be sure any contract you sign has a bail-out clause where you get the balance of your money back if you shut down/move/etc. PM if you want the name of the one I rent with.

You will have to get two things from your landlord.
i. A letter stating that the landlord agrees to have your rep office established at the address, full address and your company name must be stated. OR If the lease is in the company’s name, you can provide that instead.
ii. A copy of the most recent tax statement for the place you’re registering. It must show the same landlord as the name on the letter/lease in part i.

Note: Make a copy of all these document for your own records. To make a wanton generalization, landlords are a very shady lot and will get all antsy when you start asking them for various tax stuff so once you have the docs, copy them so you won’t have to ask again and make them nervous for nothing.

7. 外國公司指派代表人(變更)報備表(一式兩份) Registration card.

Must be 100% filled out by computer with zero mistakes. This is going to be your official certificate showing you have a rep office in Taiwan. Don’t worry about doing into too much detail with the sections on what your company does, etc., a couple of sentences is fine.

File is here: gcis.nat.gov.tw/doc/com_doc1/Com_a_004.doc

8. 免繳規費 It’s free to register. How nice is that!

Some notes about the MOEA:
i. They’re very helpful. There is a CPA desk which can answer all kinds of questions and most of the people there are very friendly. Go and talk to them.
ii. They have a website, which is awful, but it’s still useful: gcis.nat.gov.tw. Find the link for 資料下載, which should have a section called 應備文件, under which rep office registration is referred to as 外國公司報備.


Step 2: Council of Labor Affairs (CLA)

map: goo.gl/maps/Ns3x

You will need to apply for a work permit. You will need:

  1. Application form (you can fill it out by hand at the CLA office)
  2. Photo of you, visa format. They’re not too picky but it should be visa/passport style.
  3. Passport–prep copies before you go, there’s a 7-eleven northwest of the office which you can use.
  4. Your two chops, 大小章
  5. Employment contract, any contract is fine. English will do.
  6. The registration documents (公文) given to you by the MOEA.
  7. 500NT cash.

Note: There is no official minimum wage in this case. Your home country’s minimum, or Taiwan’s minimum are fine, although if you are reporting too little tax here you might find yourself being asked a lot of questions.



Step 3: National Immigration Agency (NIA)

map: goo.gl/maps/wMmt

You will need:

  1. 2 visa format photos
  2. Employment certificate, which they can give you one on the spot–it will require your signature and 大小章.
  3. Application form, fill out by hand at the NIA
  4. Work permit from the CLA
  5. Passport and one copy (they have a copy machine there)
  6. Copy of the lease for the place you live, or a letter from the lessee stating you live there (may not be required if you fill out your address in Chinese, etc., I’ve only rarely been asked for this)
  7. 2200NT + 1000NT/year. You can choose to pay every year, or pay all at once.

Note: If may be necessary to go to Foreign Affairs to get a resident permit, depending on your status at the time of application–ie visa free treatment. To avoid this, come on a visitor visa. I’m not sure about switching from another ARC. What is clear is that the likelihood of being forced to do a visa run is almost nil.

Note for working holiday visa holders: This is a non-convertible visa and you will be required to do a visa run and probably visit a TECO office to have the visa formally canceled. It would be useful to apply for a visitor visa at the same time so you can avoid the application for a resident permit as stated above.


You’re done!

:roflmao:



Appendix: Tax Matters

This is actually very straightforward, and you have to do it or else you will not be able to extend your ARC, and could face trouble at the border.

Disclaimer: This is not legal advice. It is provided as is and without any guarantee whatsoever. Just sayin’.

1. 扣繳單位設立登記
If you open a rep office bank account, your bank will (should) ask you for the record showing your tax account registration. It’s just so they know how to identify you to the gov’t when they report the amount of money going in and out every year. This won’t make you liable for any tax–it’s just for record keeping.

i. Take your documents to your local national tax office and fill out the application. They will give you a blue paper that shows your tax account info.
ii. Note that you’ll need your 房屋稅籍編號–the tax ID of your office location. Have this before you go!
iii. Take the blue paper to the bank, where they’ll copy the information.

2. 扣繳申報 Personal income tax time :discodance:
i. This must be done in January of the following year, of you may be liable for a 750NT fine.
ii. First you need the form that shows how much you were paid last year as the representative. Go to your local national tax office branch with the office registration papers issued by the MOEA, your ARC, and the amount you were paid (just remember the figure). Ask to be directed to wherever 扣繳申報 gets done. If you are registered in New Taipei City and go in January, the 9th floor is all set up to receive the flood of people doing this. They will take some information down and print out a form which, if you’ve worked in Taiwan before, will be very familiar. It’s the slip which shows your income. If you go late, you’ll have to fill it out by hand on the 3rd floor, and possibly be sent a bill for a fine.

iii. Take your income statement and file your taxes! There’s lots of info on how to do this already on the web. Usually it’s simply a matter of going to your local tax office and being lead around filling stuff out for about 10 minutes. That’s on Zhongxiao road, corner of Zhonghua road in Ximen, if you live in Taipei, and beside New Taipei City hall in Banqiao if you live in NTC. In some respects Taiwanese admin is just incredibly efficient, and this is one!

iv. File for property tax. I have no idea how to do this but if your landlord is an individual, and not a property mgmt company, etc., and did not issue you an invoice with a 統一編號 when you payed your rent, you may need to report your rental payments. My landlord is a company, and I was issued an invoice, so I didn’t have to do it. I’m just saying this so you know to look into it.



Appendix: Renewing

At the end of your work permit, you’ll have to renew with the CLA. You’ll fill out an application much the same way you did initially, and be asked to show evidence of activity as a representative. This means correspondence with local companies, estimates given or received, transaction records of things bought or sold between the home company and local clients/vendors. What is required is largely up to the discretion of the person handling your application, although if you’ve been busy as rep, you will have zero problems renewing.



Appendix: Shutting down

Quitting this job is actually a pretty complex matter. Whether you actually bother is up to you, but there will at least be the chance of a fine from the CLA for not informing them you quit, and your landlord could sue you if the repo office does not officially vacate the rental space.

1. CLA Notify the CLA you’re quitting.
This requires an application form (page 1 of this form: goo.gl/As3Rs), termination agreement (Google 解約同意書), and stamped (大小章) copies of your ARC and original work permit that show the words 與正本相符. Mail the documents by registered mail to this address:

103台北市大同區延平北路二段八十三號一樓 收件人:職訓局綜合規劃組(申請解聘外國專業人員)收

2. MOEA Close the rep office (撤銷).
The MOEA requires an application form (goo.gl/IR8RG), in Chinese. See the first section above re. notaries.

3. Close your office
If your rental agreement has a bail out clause, which it should, you can get your money back starting from the date the MOEA authorizes your shutdown. Either way if you want to be nice, you’ll have to give your landlord a copy of the shutdown authorization.

4. Tax office Cancel your tax account (扣繳單位註銷).
Go to the tax office where you opened your tax account and apply to close it. It’s a simple form which you can fill out on the spot. You will also probably want to go to the bank and close your account, which will likely require the authorization letter from the tax office and the one from the MOEA showing the closure.


Proper way to handle long term stay for remote worker
Llary's (almost) Complete Guide to Rep. Office Registration
Llary's (almost) Complete Guide to Rep. Office Registration
Tax on Rep Office not paying any wages?
Working as a contractor in Taiwan
#2

My accountant was worried that the fly in the ointment could be clause 3 here, which says, the rep. office needs to run for one year before it can hire a foreigner. I gotta find the website this came from and see if it has a full English translation.

外國人從事就業服務法第四十六條第一項第一款至第六款工作資格及審查標準
第39條
聘僱前條外國人之雇主,應具備下列條件之一:
一、設立滿一年以上,最近一年或前三年平均之營業額達新臺幣三百萬元以上。
二、設立滿一年以上,最近一年或前三年平均進出口實績總額達美金五十萬元以上或代理佣金達美金二十萬元以上。
三、經中央目的事業主管機關許可設立一年以上之外國公司代表人辦事處且有工作實績者。
四、對國內經濟發展有實質貢獻,或因情況特殊,經中央主管機關會商中央目的事業主管機關專案認定。
設立未滿一年之公司,其實收資本額或國內營運資金應達新臺幣五十萬元以上。


#3

Your ointment is snake oil. Take anything an accountant says with a large grain of salt.


#4

Good point. My experience is if you ask 5 accountants here the same question you get 6 different answers.

Now, should one then, have one’s home office pay one, a certain minimum salary, of say 48,000 NT a month, then file a Taiwan tax return on that. Probably not much tax due. Would you pay yourself in Taiwan or back in the home country?

I assume that, armed with the above, there could then be an additional step of you or your company buying NHI?


#5

I think you can pay yourself any way you like but it will be very wise to do a tax return in Taiwan regardless. You may run into trouble if you’re living here on a work permit and not filing taxes.

Health insurance would be an available option, yes.


#6

All of our staff plus the wife and I have NHI and labor insurance through my rep. office, it’s less hassle than doing it through a regular ltd. company.

Your rep. office can receive money from abroad (e.g. to pay for office space, office staff etc.) and that money doesn’t have to be reported in Taiwan.

You DO have to report any personal income you take as salary etc. on your income tax return. You can’t declare that as overseas income since you are doing the work in Taiwan but the tax will be negligible after deductions.


#7

Negligible after deductions? o_O

Also, does your rep office need a tax number when the rep files a tax return?


#8

Say if you report your salary as $576,000/yr, less around $150k in standard deductions, if you can get at least another 50k in deductions from e.g. paying rent you will pay less than $20k total income tax.

Each rep office has its own unified business number like a regular company, it just can’t be used to issue fa piao.


#9

[quote=“Lee Kohl”]I think you can pay yourself any way you like but it will be very wise to do a tax return in Taiwan regardless. You may run into trouble if you’re living here on a work permit and not filing taxes.
Health insurance would be an available option, yes.[/quote]
After some preparations i needed to do at home, i recently brought the necessary documents to Taiwan and went with them to the MOEA, to confirm what has been written here and on the quoted website about how certain details are to be handled with the application form, registration cards, and the appointment form (in my case the relevant documents from home are not in English but in Japanese, so i wanted to double check on all of the applicable points). The MOEA staff gave me suitable sample documents and explained everything, and with the help of a professional Japanese-Mandarin translator i have now written the drafts of the documents that i have to hand in, but there is still one point i’d like to hear other people’s opinion on: my company pays my salary in Japan, so what should i write? I am thinking that if i were to write some (roughly equivalent) amount in NT$ it would look like i got paid in Taiwan and would need to pay taxes in Taiwan, but since i already pay taxes on my salary in Japan i obviously don’t want to do that. On the other hand, if i write nothing about my salary this might raise suspicions on part of the MOEA and the tax office, so i am inclined to write an explanatory note. Is there anybody here who is in a similar situation? Do you file a “zero” income tax return in Taiwan?


#10

It’s technically impossible for you to be a representative and have no earned income in Taiwan. It doesn’t matter where you receive payment; all work done in Taiwan is technically subject to Taiwan income tax.

I think you are making things unnecessarily complex for yourself; you can file some nominal amount to satisfy tax rules and simplify your upcoming NHI applications. Most filers can claim around $200k or more of deductions before you are assessed any income tax at all.


#11

Oh for … you beat me to it llary. Anyway, I wrote this already so what the heck.

Even if you are paid your salary in a foreign country, at some point you will want to spend the money and to do so will be bringing it into Taiwan. I withdraw money for living expenses from my home account every month, and declare this as income. As llary already said, you can’t live in Taiwan with a rep office ARC and not have an income. You will run into trouble with tax authorities and their buddies in immigration.

As for the amount stated on the employment contract, just put some reasonable number. (Actually I know people who put an amount below the Taiwan minimum wage and were still granted a 3 year work permit. However, Japan is a much wealthier country. I wouldn’t go below the minimum wage of your home country.) More to the point, to my knowledge this is not enforced. I’ve had 5+ employment contracts in Taiwan and the amount I was paid never equaled the amount stated on the contract. Tax is assessed based on the amount of income, not the amount written on the contract.

Anyway there will be lots of us pulling our hair out at tax time next year, there’s sure to be plenty of talk here about it. I say shoot first, ask questions later. :smiley:


#12

Thanks for the comments, guys. :bow: Nevermind what anybody may think about making matters complex: the aim is to make and keep it simple. :wink:
Anyway, you have given me enough info that i know now what to do. I’ll be back with more info before long… :slight_smile:


#13

BTW - Taiwan now requires all overseas income to be declared under the new AMT rules so I declare minimum wage as base salary to run the rep. office and declare the rest of my income as overseas income from my foreign holdings.

Most people will still not be required to pay any tax on foreign income since the threshold is $6m/year, but the most important part of the new tax rules is the reporting required even if you earn under $6m. The scheme is initially being used as a fishing expedition to weed out people using offshore havens. So if you are bringing any amount of money into Taiwan as foreign income you should declare it.


#14

Right - this reminds me that not long ago i had made a note about this recent change of the law somewhere… just need to find my tax related notes now. :wink:

No sweat - if i had an annual income anywhere near $6m i doubt i would need to open a rep office inTaiwan. :laughing:


#15

[quote=“Lee Kohl”]You need to prepare the following and bring it to the MOEA:
6. 建物所有權人同意書正本(應載明同意提供使用之公司名稱)及 最近一期房屋完稅稅單(或所有權狀)影本。
(建物為公司所有者或檢附租賃契約影本,免附同意書,仍應附最近一期房屋完稅稅單影本或所有權狀影本)[/quote]

It took me a little while to parse that - if you (or anybody) can confirm whether the following rearrangement is correct, i’d like to suggest that we use that in place of the current wording, because it would make this point much easier to understand. :slight_smile:
[b]6.建物所有權人同意書正本/b
i[/i](i think this italics portion can be left out altogether in the context of this guide)
以及[b]最近一期房屋完稅稅單/b影本。

Thanks!


#16

I’ll update it above


#17

Another question: i’m trying not to reinvent the wheel here, so i 'm wondering whether anybody has a sample text (in Chinese) for this item:
建物所有權人同意書
"A letter stating that the landlord agrees to have your rep office established at the address"
:bow:

PS: Got the copy of the property tax bill and payment receipt today, and the landlady said she can’t write such a letter but will sign it if i prepare it. :slight_smile:


#18

gcis.nat.gov.tw/doc/a2_2_2_2_1-4.doc


#19

Thanks! :bow:

(I’m planning to go with my paperwork to the MoEA on October 11)


#20

Congrats :thumbsup: