The three vehicles
A foreign company can establish in Taiwan as a representative office, as a branch of the foreign company, or as a subsidiary incorporated under Taiwanese company law.
A representative office may perform legal acts and liaison activities. It may not trade. Companies regularly discover this after choosing it for speed.
A branch may conduct general trading, domestic sales and manufacturing. It is not a separate legal person, so the foreign head office remains liable for anything the branch leaves unsettled.
A subsidiary is a separate legal entity with the liability shield that implies, and the compliance overhead that comes with it.
The tax difference that decides it
Corporate income tax is 20 per cent, and business tax — Taiwan’s value-added tax — is 5 per cent. Those apply either way.
The difference that matters is retained earnings. A 5 per cent profit retention tax is charged on current earnings that remain undistributed by the end of the following year. Taiwan branches of foreign companies are not subject to it.
For a business that intends to repatriate rather than accumulate, that single line often decides the structure.
Your company needs a Chinese name, first
Before anything else, the Chinese company name and business scope are pre-reviewed and reserved with the Ministry of Economic Affairs. This is the first step in the sequence, not an afterthought, and the name you want may not be available.
Foreign investment approval is then sought from the Department of Investment Review at the Ministry of Economic Affairs, on Roosevelt Road in Taipei.
The sequence
Name and business scope reserved. Foreign investment approval obtained. A bank account opened in the name of the preparatory office. Capital remitted in foreign currency and converted. Capital verification filed. Company registration completed.
Taiwan has abolished the general minimum capital requirement: outside certain regulated industries, capital need only be sufficient to cover reasonably expected costs. Capital adequacy is a commercial judgement rather than a statutory threshold.
If you are locating in a science park
Companies located in the Hsinchu, Central Taiwan or Southern Taiwan science parks register with the Science Park Bureau rather than the city government. It is a different counterparty with different expectations, and assuming the standard municipal route wastes weeks.
The honest answer for most first entries
Most companies do not need an entity to begin selling in Taiwan. Import, product registration, distribution and even retail listing can run through a distributor or a neutral importer of record.
The moment to incorporate is when you need to hold your own licences, employ your own staff, or take direct control of channel relationships — which is usually after the market is proven, not before.
Common questions
Do we need a Taiwanese entity to start selling?
Usually not. Import, registration and distribution can be handled through a distributor or a neutral importer of record. Incorporation earns its overhead once you need your own licences, staff or direct channel control.
Branch or subsidiary?
A branch escapes the 5 per cent profit retention tax charged on a subsidiary’s undistributed earnings, but leaves the foreign head office liable for the branch’s obligations. A subsidiary gives separation at the cost of that tax and more compliance.
Can a representative office sell?
No. A representative office is limited to legal acts and liaison activities.
Is there a minimum capital requirement?
Taiwan has cancelled the general minimum. Outside certain industries, capital must simply be sufficient to cover reasonably expected costs.