Permit/ARC for sole rep

Business Money
1

Has anyone been through something similar and can give me an indication of what I can expect re: securing a work permit/ARC under the following scenario?

I’m talking to a foreign firm about a stock and market research role to be based in Taiwan.

I will be the company’s sole Taiwan presence so will have to file all the paperwork myself. We wouldn’t generate or solicit revenue in Taiwan, and I would get compensated offshore.

Credentials/professional experience are not an issue, & I’ve lived in Taiwan before.

Still, wondering if there are issues, perhaps tax or accounting, that I might be unaware of?

Basically the plan is to move to Taipei and work from home, offering my research to a European and N American client base.

Is it simply a matter of me securing a work permit, visa and ARC or does my employer have to be concerned with other issues along the lines of tax, accounting, local insurance requirements?

2

If you are the company’s representative, you can apply for a work permit and ARC.

As a representative’s office, you cannot generiate revenue. You will have to pay tax in Taiwan on your off-shore compensation. How your tax is calculated could depend on many things, but you will have to show a minimum income of ca 48.000 NT$. You will have to join the National Health insurance as a business entity, which means that you will probably have to pay some 2000 NT$ per month.

I had a local law agency do the paperwork for setting everything up for me, as I wasn’t in Taiwan at the time. Ask Llary if you want to do it yourself, at least look at this forumosa.com/taiwan/viewtopi … ive+office

[quote=“Opihiman”]Has anyone been through something similar and can give me an indication of what I can expect re: securing a work permit/ARC under the following scenario?

I’m talking to a foreign firm about a stock and market research role to be based in Taiwan.

I will be the company’s sole Taiwan presence so will have to file all the paperwork myself. We wouldn’t generate or solicit revenue in Taiwan, and I would get compensated offshore.

Credentials/professional experience are not an issue, & I’ve lived in Taiwan before.

Still, wondering if there are issues, perhaps tax or accounting, that I might be unaware of?

Basically the plan is to move to Taipei and work from home, offering my research to a European and N American client base.

Is it simply a matter of me securing a work permit, visa and ARC or does my employer have to be concerned with other issues along the lines of tax, accounting, local insurance requirements?[/quote]

3

Much thanks … may try contact you & others later for follow-up questions.

4

[quote=“Opihiman”]Has anyone been through something similar and can give me an indication of what I can expect re: securing a work permit/ARC under the following scenario?

I’m talking to a foreign firm about a stock and market research role to be based in Taiwan.

I will be the company’s sole Taiwan presence so will have to file all the paperwork myself. We wouldn’t generate or solicit revenue in Taiwan, and I would get compensated offshore.

Credentials/professional experience are not an issue, & I’ve lived in Taiwan before.

Still, wondering if there are issues, perhaps tax or accounting, that I might be unaware of?

Basically the plan is to move to Taipei and work from home, offering my research to a European and N American client base.

Is it simply a matter of me securing a work permit, visa and ARC or does my employer have to be concerned with other issues along the lines of tax, accounting, local insurance requirements?[/quote]

That’s pretty much how and why I moved to Taiwan. You can follow my guide more or less exactly and you’ll get your ARC.

PS: stressing the ‘making money outside Taiwan, paying taxes in Taiwan’ aspect will help your case no end. Good luck!

5

[quote=“llary”]PS: stressing the ‘making money outside Taiwan, paying taxes in Taiwan’ aspect will help your case no end. Good luck![/quote]Do you know that local Taiwanese that make money offshore and bring it into Taiwan pay ZERO income tax. It is setup as a perk for people that bring money into the country. Guess in your situation it didn’t work like that. My wife and I were reps for a foreign company for about 8 years operating like this. All of the money went to her Taiwan account so I didn’t have to pay US taxes either, since I didn’t have any income just a “Sugar Momma”.

6

In other words, if you are married to a local, you just get the money from your overseas firm thru the missus, and you are free of taxes. I love that one. You won’t need to get the ARc thru the rep office either. An interesting setup.

7

Call me paranoid but I’d rather pay tax on my earnings than entrust them to a Taiwanese woman :laughing:

8

Call me paranoid but I’d rather pay tax on my earnings than entrust them to a Taiwanese woman :laughing:[/quote]

A lot depends on the woman - remember that I run my business in my fiancee’s name. Whenever she has to go to the bank it’s “Darling, where do you want me to sign?” So no, I would not be worried, as she never does anything in relation to the company without receiving clear instructions from me.

I would get her to open an account and then merely keep the passbook and the account card myself.

9

The money is short term, she wouldn’t walk away with that, she knows that if she keeps her wagon hitched to me, she can have more of the sweet life. :laughing: :laughing:

Anyway, if she ever did walk away with our savings, I can make it all back.

10

It’s not as simple as saying ‘foreign income is not taxed’. Foreign income earned for services performed in Taiwan is taxable in Taiwan. The problem for foreigners is that at some point you will be expected to show some sort of income related to your stay, unless your purpose of stay is for ‘joining family’ in which case they aren’t as strict. If you are here for business though, you’ll definitely be expected to show that you have income related to your presence here. To save hassle of the tax office trying to figure this out for you, those on business here should on their own initiative declare a certain reasonable amount of foreign paid income as related to their stay in Taiwan and file and pay taxes on it.

The reason Taiwanese can get away with it is because they don’t have to periodically prove a reason to be here. Receiving income through a Taiwanese person won’t help you with this problem as you will still be expected to have income related to your stay if you conduct business here.

11

[quote=“jlick”]It’s not as simple as saying ‘foreign income is not taxed’. Foreign income earned for services performed in Taiwan is taxable in Taiwan. The problem for foreigners is that at some point you will be expected to show some sort of income related to your stay, unless your purpose of stay is for ‘joining family’ in which case they aren’t as strict. If you are here for business though, you’ll definitely be expected to show that you have income related to your presence here. To save hassle of the tax office trying to figure this out for you, those on business here should on their own initiative declare a certain reasonable amount of foreign paid income as related to their stay in Taiwan and file and pay taxes on it.

The reason Taiwanese can get away with it is because they don’t have to periodically prove a reason to be here. Receiving income through a Taiwanese person won’t help you with this problem as you will still be expected to have income related to your stay if you conduct business here.[/quote]

The key phrase here is ‘getting away with it’. Just because you can get hitched to a Taiwanese, run all your money through them and not pay any tax doesn’t mean it’s legal. It just means it’s near enough impossible to track down, especially for the Taiwanese authorities.

I know that in two years time when my ARC is up for renewal I’m going to hear, ‘okay, so let’s see your tax receipts for the past three years’, and if they don’t show something reasonable to cover my living here then I ain’t getting that 3-year extension. Besides, there are so many deductions you can claim each year that the average person can reduce their tax bill to something ridiculously low without doing anything illegal.

12

Well, I hear you llary. I recall making nearly NT$1.4 million per year and declaring everything - tax bill - turned out to be NT$75,000 once all the deductions kicked in - OK, I only got my refunds in September the year after I paid them, however I got them. Now, NT$75,000 was 3 weeks salary, meaning that I stopped working for the state and started working for myself in mid/late january… As compared to August where I come from.

13

Just wanted to follow up & thank all … I filed rep office, work permit, resident visa apps all myself (to file ARC shortly) together with much help from this thread and the thread below - not to mention a few timely PMs:

forumosa.com/taiwan/viewtopi … ive+office

To add a few notes that I haven’t seen posted before:

A. An LLP cannot form a rep office - but seems most any other structure can.

B. There is no minimum capital requirement for the overseas parent company - my nominal employer is capitalized at 1 British Pound. Not an issue.

C. Of all the applications and forms in this entire process, only the rep office application needed to be typed, and fully in Chinese. Moreover, application needs to provide a good quality translation of the certificate of incorporation and Power of Attorney. For these reasons some might find the services of a law firm or CPA useful.

D. Llary describes receiving an endorsement from the Ministry of Economic Affiars in support of his residence visa - he needed to provide evidence of a contract between his company and a Taiwan company. MOEA told me this is only done as an exception - typically the representative has an employment contract and simply applies for a work permit. This is what I did - I filled out the forms for my own work permit. No hassle at all … processing took about 8 or 9 working days. Now Llary is self-employed whereas I took a role with an overseas employer. But … I suspect Llary could have simply drafted an employment contract with his parent company and applied for a work permit with all the other education & work experience that process requires - both avenues were open to him. Work permit was much, much easier for me.

E. A closing comment on services from lawyers and CPAs. I was in contact, directly and indirectly, with several, exploring the possibility of hiring them in this oddysey given I also needed to work full time while getting this paperwork done. In my experience the CPAs were cheaper but were unsure how to go about what needed to be done - and I was never inclined to take three steps back to get them up to speed. At the other end, my sense was lawyers were overcharging for work that isn’t exactly rocket science. (Hint: in your correspondence they try to make the process sound more difficult and precarious than it really is … fear is a tried & true sales motivator that I just don’t buy into.)

So, thanks to all, and to reiterate: a few of us have walked this path now. If your Chinese is semi-fluent and you have some experience either in Taiwan or greater China, this process is emminently doable single-handed. Also, there are plenty of professionals (lawyers, CPAs) who can also take on much of the work for you if bureaucracy isn’t your thing.