How hard is it to start a business in Taiwan?

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It is not as hard as you may think. In fact, someone may a guide on how to do just that.

Llary’s Complete Guide to DIY Representative Office Registration

When I first wrote this guide very few people had set up this kind of office as a cost-effective way to be self employed in Taiwan. Now there have been many others doing the same which meant that MOFA and MOEA got used to the processes involved and started making up their own internal guidelines. The most drastic change since I wrote this has been the creation of the National Immigration Agency. Fortunately, it’s all good news as many people have contacted me to say that rep. office applications are getting a lot easier and the NIA have been handling them with more consistency and competency. If someone has gone through this process with the NIA then please help out by writing an update so others can have a more accurate idea of what to expect now.

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I decided to write this guide because I had a hard time setting up my rep. office and would have found things much easier with a proper resource on this weird little section of Taiwan company law. I have covered the entire process from registering your office to obtaining an ARC. Anyone with some business sense and a little Chinese could manage this easily with minimal help. If you want someone to absorb part of the workload, I suggest hiring a specialist CPA (accountant) to complete only the rep. office registration; I don’t think it’s worthing paying someone to fill out a couple of visa/ARC forms but it’s your money. I can recommend the guys at ML McLean 16 as one of the few Taiwanese CPAs who won’t rip you off or try to work things out as they go along. The application material says a native Taiwanese representative (i.e. CPA with power of attorney) is required but I asked a few departments about this and noone seemed to be putting this into practice, so your mileage may vary.

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You will find the process difficult, if not impossible, if your Chinese is not at least up to ‘read a comic book’ standard or you can’t write. In this case and with no Chinese speaking friends to help, that’s the time to ask your CPA for the complete package. Make sure you know what you will be paying for the company name check, office registration, resident visa application, MOEA (Ministry of Economic Affairs) approval for resident investor status and ARC (Alien Resident Certificate) application - don’t get stung.

Someone with good Chinese and a lot of patience could do this entirely on their own. You will get a lot of help in certain government departments and none in others, but MOEA were particularly helpful. Hats off to them.

Caveat emptor: I have been self employed since a very early age but I’m no lawyer. I have done a hell of a lot of research to get to this point so I’ll give the Not Talking Out Of My Backside Guarantee ™ but if in doubt, consult an immigration expert. If anyone needs any more help or wants to know specifics of my company such as turnover, capital etc. I will happily oblige by PM. If you want to meet up with me and ask about my experiences, I’m game as long as you buy the beers.

The following all applies to companies registering in Taipei. Even if, like me, you have no intention of living permanently in Taipei, register here first because I’m told you will find the whole business less stressful.

WHAT IS A REPRESENTATIVE OFFICE?

A rep. office is one of many forms a foreign business can take in Taiwan. It’s a great way for many entrepeneurial foreigners to obtain residency in Taiwan without satisfying the requirements of a branch office or proprietary company. A representative is simply a legal agent of the foreign company employed to present sales pitches, find suppliers, sign contracts etc.

Pros: a rep. office is the easiest and cheapest way to establish a legal presence in Taiwan.

Cons: you will not have an actual Taiwanese company and are not permitted to do any work in Taiwan other than specified in your mandate as representative. There is no guarantee that you will be issued a resident visa even if your application to set up an office is granted.

PEOPLE AND BUSINESSES SUITED FOR A REP. OFFICE

designers, programmers, writers, musicians, freelancers, consulting companies, global businesses

What if you’re self employed and still need to work for clients back home or perform the day to day business duties? Technically the representative is supposed to work in Taiwan solely as a legal agent of the foreign company. However, in practise I see nothing wrong with working on your laptop, notepad, guitar etc. for your foreign company while you happen to be in Taiwan. Therefore, you essentially have two jobs: one is your normal role in the company, whether self-employed or part of an SME, and the other is your role as legal representative in Taiwan.

Taiwanese companies -> pay your foreign company -> which employs you -> who organises the deals with Taiwanese companies

My advice: don’t take my word for this because it’s not tested. I’m simply giving you an idea of my interpretation of the rules. Familiarise yourself with all the laws and make up your own mind.

Things that will definitely get you into a lot of trouble: teaching; performing in bars/clubs (EVEN UNPAID); labouring; generally making it obvious that you are working outside your mandate as foreign company representative.

PEOPLE NOT SUITED FOR A REP OFFICE

anyone who intends to get residency just to work illegally. I have no time for any foreigners who undermine the law-abiding majority, no matter how frustrating the Taiwanese immigration systems can be. Each infraction by a foreigner makes it that bit harder for those of us who do our best to abide by the laws.

labourers, shopkeepers or anything that blatantly contradicts the rule about working outside your representative mandate.

teachers, or foreigners planning to set up a cram school.

The above are catered for by a branch office of a foreign company or propietary Taiwanese company. Here you have the advantage of a full company presence in Taiwan, permitted to do more or less anything a native company could do. However, they are more difficult to set up and both are subject to a minimum NT$1,000,000 startup capital. It’s possible to use intellectual property or tangible assets to cover this capital, but I wouldn’t recommend it. The accreditation process is, I hear, a nightmare. Furthermore, to continue qualifying for the foreign manager’s ARC, a proprietary company is subject to a minimum yearly turnover of US$1m* or NT$10m.

*This figure was given by a CPA. I have seen NT$10,000,000 And Other Stories but that’s beyond the scope of this guide anyway.

WHAT YOU WILL NEED BEFORE YOU COME TO TAIWAN

a limited company (see: REGISTERING A LIMITED COMPANY IN YOUR HOME COUNTRY)

your company registration certificate, notarised and legalised (see: NOTARISING FOREIGN DOCUMENTS)

power of attorney designating you as a legal representative of the foreign company (download my example here)

REGISTERING A LIMITED COMPANY IN YOUR HOME COUNTRY

In many countries it is possible to trade under a company name without any formal registration, or without limiting the company; sole traders and partnerships are two examples. Registering an office in Taiwan requires that the foreign parent company be a separate limited entity. ‘Mr. Bob Jones trading as Bob’s Bits’ is NOT, for example, an acceptable company format for registration. ‘Bob’s Bits LLC’, ‘Bob’s Bits Ltd.’, ‘Bob’s Bits GmBH’ are all valid limited companies. If you already have a suitable business entity, skip to the next step.

Here’s a little secret: you can register a limited company in the UK no matter what your nationality or residency. UK company law permits foreign nationals to register a company, as long as the company’s head office is registered at a UK address. How to get a UK address? Simple! There are plenty of firms in England who offer ‘virtual address’ services that will forward mail to you from the UK. Here is one. UK company law also requires at least two directors, or one director and one secretary. If you don’t have any business partners or a friend to co-sign, most virtual office of company registration bureaux also offer a ‘virtual company secretary’ service, where they sign on your behalf. Once you have your UK address and a fellow director, you can visit UK Companies House for more information, or have everything registered for you by the likes of Small Firms Services. The latter option is recommended because they will handle everything down to share allocation, change of accounting date, etc. for around GBP70 (US$110). I will vouch for the excellent service received from SFS.

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If you’re not British resident and take this route, be prepared to answer why you have a company based in the UK but don’t lie. Good: registering in England means I can trade all over Europe. Bad: I have x number of assets in England, four ponies and know the Queen.

NOTARISING FOREIGN DOCUMENTS

As far as I know, American citizens will have an easier time with this part as public notaries are ubiquitous and subject to rules on how much they can charge. Notaries are much less common in England and you may have shared my pain in trying to get a reasonable service. Expect one week for processing in the UK and if you are sending documents from Taiwan, ask for EMS at the Post Office. The Express Mail Service costs NT$300 per document package and is several days quicker than regular mail.

US citizens, google for ‘public notary’. (If someone can make personal recommendations, let me know and I will edit them into this post). I have a public notary friend in California who tells me that $10 is the statutory maximum that a US notary may charge per document. Many companies fiddle this by charging ‘printing fees’, ‘agency fees’ etc. etc.

UK citizens, I recommend Small Firms Services who charged me GBP57.00 for both documents (tel. 0800 328 7494). The cheaper bound apostille notarisation is sufficient.

Once your documents are notarised, they must then be sent to your local Taiwan Representative Office (TRO in the UK, TECRO in the US) for legalisation. They require that you send two copies of this form along with your notarised documents and a copy of your passport photo page, then send back your legalised documents within two working days. Give them a call to make sure you have everything in order first - they won’t bite.

WHAT YOU WILL NEED IN TAIWAN

your legalised limited company certificate

your legalised power of attorney appointing you as representative

a chop (there are shops all over the island who will make these things for you, along with street vendors in busy night markets. If you don’t have a Chinese name yet to make your chop then perhaps it’s time to reconsider doing all of this yourself…)

Image result for japanese stamp sealan address in a commercial office or landlord willing to accept a company registered there. You can use your home address as long as you don’t live in a residential high rise. Failing that, find a ‘virtual office address’ in somebody else’s office. You will need some Chinese to negotiate such a deal but failing existing contacts, property agents or classifieds such as hion.com.tw 6 are good places to start. You may have difficulties if you try to use a virtual address that has been used for rep. office applications in the past. Try to find out how many foreigners are using the same office before coughing up any money.

patience and a few good strong beers.

NOTE: you do not need a health certificate. As I found out AFTER submitting my bowels for public examination at Ren’Ai hospital.

REGISTERING YOUR REPRESENTATIVE OFFICE AT MOEA

(I had a CPA complete this part for me and I’m waiting for a lawyer friend to get me the definitive step-by-step answer on how this is done, but after seeing the application forms that my pals at MOEA showed me, it doesn’t look particularly difficult. Actually, I kicked myself for paying out so much when I realised I could have done this just as quickly on my own. Notarising documents seems to be the hardest part of this excercise, and you are going to have to do all of that regardless of whether or not you decided to use a CPA for the whole process. Ask MOEA for the list of requirements to set up a representative office in Taiwan and they will show you the bullet point list so you can decide for yourself whether you’re capable of pulling it off.)

GETTING YOUR RESIDENT VISA AUTHORISATION FROM MOEA

This is potentially the trickiest part of the whole process. You MAY have automatically received this when you received your rep. office authorisation from the ??? (MOEA) but it’s likely you will have to go to MOEA’s office and make your case first. If you’re not sure, take your documents to MOFA (see: GETTING YOUR RESIDENT VISA AND ARC) with your resident visa application form. Don’t say anything at first - give them what documents you have and see what they say. What you’re asked for will depend on the person serving you at the time.

Assuming MOFA aren’t happy, you’re going to need to hop on back to MOEA with:

evidence of a contract between a Taiwanese company and your foreign company for at least one year (download my example)

an application form explaining your reasons for needing Taiwan residency, which you must write yourself (download my example - my Chinese isn’t the greatest; any mistakes or improvements, please send me the fixed version)

After one week or so, start pestering MOEA for your approval letter. They will send a copy to MOFA, but you must take the original along to apply for your resident visa. I was able to collect the original from MOEA within around two weeks.

GETTING YOUR RESIDENT VISA AND ARC

You need to go to the ??? (MOFA) at BOCA (Authentication Division), Counter 29 & 30, 3F, 2-2, Sec. 1, Chi Nan Road, Taipei. Tel: (02) 2343-2913 ~ 5.

You will need:

visa application form

visa approval letter from MOEA

passport

NT$3,000 cash

Your passport will be ready to collect within two weeks; you will be told the date when you can collect.

Once you have this, go straight to the nearest Foreign Affairs Police; MOFA will give you a sheet with offices for each jurasdiction on request. The FAP will require the same documents as MOFA but this is a rather painless procedure. ARCs cost NT$1,000 per year, and most investors receive a full three year ARC. After two working days you can collect your shiny new card and you’re officially done. Congratulations!

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Good stuff!