Uhm, well, the bank account is in the foreign company’s name, but you’re saying it’s possible to have a bank account for a foreign company here just like that without a need for a rep office or local branch?
Yes, at least I can confirm Cathay will let you open such an account. You will have to get a tax account (扣繳號碼) for your foreign company first though. I have the same issue as you and this is the solution I’m working on so, I’ll be able to tell you more this week.
So that would make it legit to transfer funds from the foreign company account to the local rep office account then? As otherwise it would be pointless again.
The rep office account can receive money, but it cannot receive payments from clients.
As far as I know a Taiwanese bank account opened by a foreign company can receive payments, and pay whatever bills the company needs to pay, ex. your salary etc.
Under a scheme like this your rep office account would be unnecessary, you could just close it.
Be aware that I’m just some guy like you, I don’t know this for sure. It’s just what seems to be legal in Taiwan, and I will be looking into it more thoroughly after the holiday.
[quote=“TheLostSwede”]That still wouldn’t help me in my situation though, as I couldn’t pay myself from the local company, I’d have to pay myself from the funds that the rep office has, right?
I guess I’m in an usual situation, but none of the options available would make the least bit of a change to my situation as far as I can tell.[/quote]
I think you are making it more complicated than it has to be.
- you have your rep. office so residency is already a non issue. Get your NHI etc. through your rep. office.
- you can set up a local company for less than $10k in CPA fees
- your local company bills your Taiwanese clients who deposit money into your local company’s bank account
- if you want all the money to go back to your foreign company then have the foreign company invoice your Taiwanese company and remit funds
- if you want to keep all the money in Taiwan then you just pay yourself wages from the local company. There is no legal issue with paying yourself from the local company.
The rep. office account is supposed to allow operation of the rep. office - for example the physical office rent, staff, electricity etc.
Wouldn’t it be odd that the local company is paying you a salary even though you’re not legal to work there, at least while in Taiwan?
Anyway sounds like a lot of work just to receive some money, not to mention having to worry about filing taxes as a local company, etc. Just open a local account on behalf of your Swedish company. You’ll still have some taxes so deal with but it should be straightforward.
You could have interests in a Taiwanese company and live in Timbuktu, there’s nothing odd about it at all. What is confusing for some is that incorporating a company and obtaining residency are completely separate issues. It is completely legal to be director of a Taiwanese company and receive the profits without having that company listed on your ARC. As long as you are reporting income to the tax office there is nothing wrong whatsoever.
We all know there are all kinds of gray areas if you think this is too much effort, but personally as a foreigner I want everything squeaky clean in case anyone decided to target me. A little planning now = a lot less hassle later.
Ok, that makes a lot more sense now, the point I was missing was that the local company could pay me if I was the director for and yes everything else is sorted already and has been for some time. That would also make it a lot easier to work for local companies, although it’s not something I’m currently doing.
Just from the MOEA where I had a chat with the wonderful lady at the accounting help desk. She said:
The only money a rep office account can legally receive are funds from the home company.
A foreign company cannot receive domestic payments to a domestic bank. account.
Any Taiwanese company pays 20% withholding tax on any portion of its revenue transferred out of the country. (I believe the key word here is revenue… not sure about other forms of payment)
A branch office is exempt from withholding tax, and pays bimonthly VAT of 5% instead. I think she said there were no other taxes for revenue below 500k NT.
A foreign company may not have a rep office and a branch office at the same time. (Ok that question was a little too hopeful haha)
She also made one other, highly suspect statement. There is no capital requirement to open a branch office–ok. Minimum capital is required to hire foreign workers, but not a foreign manager–wtf?!? I’m 99.9% sure that ain’t true but she said she was pretty sure and to confirm with the CLA.
Nothing stopping you from having one company with a rep. office and a separate company with a branch office, but I don’t see any tangible benefit to doing so. There IS a tangible benefit to having a rep. office or branch office along with a regular local company.
She is correct.
Correct except about minimum capital for getting an ARC for the foreign manager. Right? Otherwise who would even bother with the rep office? The whole point is ARC with no capital requirement. Anyway, I’d be delighted if she were correct!
I’m still leary of having a Taiwanese company that does nothing save receive payments and then pay me a salary. It just seems like fodder for unwanted attention from the tax office… again, I could be wrong!
You can get a foreign manager ARC with no minimum capital through a branch office, I know someone who has done exactly that.
Why apply for a rep. office instead of a branch office?
- if there is no need to make any sales in Taiwan a rep. office application is easier and faster.
- no tax has to be reported in Taiwan.
- tax reporting in the home country is greatly simplified.
Otherwise if you are planning to make sales in Taiwan and your home country has a relatively friendly tax regime then a branch office could be the way to go.
Bear in mind that the rep. office structure is not intended for the likes of you or me to have a convenient investment route into Taiwan, it is intended to provide large corporations with a way to conduct marketing and legal affairs without a full presence.
I know I really have no business saying this, but please bear in mind that if you are asking a lot of questions to the tax office and requesting very definite answers in writing it’s possible to cause problems for other rep. office holders. I know of one particular incident where someone has bugged the tax office or MOEA for a written confirmation about something, and the question has gone high enough up the chain of command to cause an order to be passed down about a previously fluid point.
Thanks a lot for your detailed reply Llary.
So let me get this straight: Your friend set up a branch office and got an ARC through it, with no capital/income requirements? I mean, no min. capitalization for the home company, no min. operating capital for the branch, and no min. revenue?
I’m suspicious only because when I applied for the rep. work permit last month (couldn’t have got going without your posts here!) I was asked for min. home company capital by the CLA, but didn’t have to provide it once I reminded them I was only appling for a rep. permit.
Regardless, I know you are a proponent of setting up a local company instead and it seems like a pretty good idea. But… Are the tax aspects relatively simple? I see it as an accounting nightmare and I don’t have a lot of money to spend on an accountant (nor do I trust them at all, I’ve seen way too many people on here say their accountant told them xyz and ended up getting it in the butt).
Thanks again for all your help!
If your home company is limited by shares (e.g. a regular European ltd. company) then you do have to report the capitalization, but in my case the capitalization was just some nominal value of around TW$150. There are no minimums for foreign capitalization since last time I checked the law.
My personal opinion is that you can test the waters by setting up a rep. office first, then you don’t have any major worries about capital or tax reporting etc. If you find that things are going well or need to make local sales you can always set up a local company later, and since you already have an ARC through your rep. office it doesn’t matter how much capital you have or what the company makes.
If you speak Chinese you should have no difficulty whatsoever dealing with tax and accountants. The tax regime in Taiwan is extremely easy and tax officials are generally quite helpful. Most accountants I have met who specialize in local small businesses have been quite straightforward to deal with. If you don’t speak Chinese or you need assistance with foreigner-specific issues then things get more complicated. I think most issues people have are from miscommunication.
[quote=“Lee Kohl”]since I just completed the process [strike]last week[/strike] end of March, totally unaided except by [strike]your[/strike] llary’s post here,
a buddy and friendly Taiwanese people staffing a dozen govt offices, I’m planning on posting a slimmed down update of this now epic post.[/quote]
Yes, please. 
(I’ve visibly edited your comment to set the stage for the new information… )
I have a limited company and would like to set up a rep office in Taiwan later this year or early next year (for the time being i am busy with studies).
Is there anything i can do to help get the new “how to” file on line here?
Ya, I was all set to write it, but I got totally derailed when I found out, supposedly, that you can open a branch office with zero capital. Which to me makes the rep office totally pointless. There’s an argument that rep office is simpler for tax purposes but honestly whatever minor complexity is added would be well worth the trouble in the majority of cases–if you ask me!
Anyway either way it’s actually a snap to open.
For a rep office:
Your first step is to get a legalized copy of the certificate of incorporation you received when you opened your company. Contact the Taiwan office in your country on what their requirements are in order to perform the legalization–they are the ones who do it, and they will have some other conditions before they’ll accept the document.
The other important step is to find a place to register in Taiwan. Unless you have buckets of cash to rent an office or a very reasonable landlord, this will be the most difficult step. But it’s still really no big deal.
The other steps are trivial. I’ll do my best to actually write the update. Although I’d rather coach you through setting up a branch office and help you write that how to.
[quote=“Lee Kohl”]For a rep office:
Your first step is to get a legalized copy of the certificate of incorporation you received when you opened your company. Contact the Taiwan office in your country on what their requirements are in order to perform the legalization–they are the ones who do it, and they will have some other conditions before they’ll accept the document.[/quote]
OK, i’ll see whether i can start that process next time i’m at home (in a few weeks)…
It looks like that point is already covered… 
No rush: i’ll send you the draft that i am writing up right now, based on various posts in this thread - then you only need to fix that (i hope 
)
Appreciate the offer 
, but for the time being my income will come from Japan, so i don’t need a branch office.
(In the future i may set up a separate business in Taiwan to deal with any income-generating work on this side or join an already existing business.)
Anyway, thanks for the quick reply!
I still think a rep office is not a good choice, regardless of your situation. Setting up the branch office doesn’t seem any harder, plus you are allowed to operate locally. What if you suddenly want to be paid by a Taiwanese client in a few months or even a year or two from now? You’ll be happy you did the one or two extra steps to get the branch office, believe me. I say keep if you have options, keep them open! I feel like a <> retard for opening a rep office and am facing either opening a local corporation or upgrading to branch office.