A must-have guide for overseas Chinese and foreign investors interested to invest in Taiwan
Taiwan is a free and democratic country coupled with a high standard of living. Taiwan is also one of the safest countries to live in with thriving economy and trades. Taiwan has become the choice for foreigners to invest in recent years. You may be a large company interested to invest in Taiwan or you simply want to set up another branch, or perhaps you want to come to Taiwan to test the market power, or even starting a business with a Taiwanese joint venture; Fastart will give you detailed analysis and assist you to prepare the strongest investment guide in Taiwan!
The current outlook for foreign investment by Taiwanese overseas Chinese
In 2018, there were nearly 4,000 overseas Chinese and foreign investment cases and approximately 10 billion US dollars worth of investment in Taiwan. Since further de-regulation in the past five years, quite a number of overseas Chinese and foreign investors have considered migrating and starting businesses in Taiwan. It is a strong indication that Taiwan is gradually moving towards multiculturalism, global economy framework, and many great opportunities for entrepreneurship. Taiwanese government provides a lot of free resources for non-speaking Chinese foreigners who decide to make Taiwan home. There are also many English-speaking staff in various government departments to assist you. However, it is important to pay attention on the key process to set up overseas Chinese and foreign companies. This will ensure the smooth running of your business and avoid any possible delay. So let us break it down into steps that are very easy to be understood.
Options for investment
In fact, there are no thresholds for investing and establishing a company in Taiwan. You can apply for the establishment of a company, and the amount of capital only needs to cover the process fees in theory. Practically though, it is not feasible, because overseas Chinese investor will encounter visa approval to enter Taiwan and further issue with residency permit. If you set up a company in Taiwan, but you are not able to come and run your business in the meantime; we have compiled a couple of simple solutions for you.
1. The capital is less than NT$500,000
If you have the right to reside in Taiwan, you can choose to set up a business or company in Taiwan with a capital of NT$500,000. Basically, you are free to operate and hire Taiwanese, just like a general company in Taiwan.
2. The capital is above NT$500,000
If you do not have the right to reside in Taiwan yourself, or if you want to hire a foreigner as a manager in the future, you must invest more than NT$500,000 in capital. According to the regulations of the Ministry of Labor, the initial capital investment in overseas business is more than NT$500,000. You can apply for a white-collar work permit, based on which you can apply for a residence permit in Taiwan
3. The capital of NT$6 million or more
Overseas entrepreneurs who want to invest in Taiwan can also choose to enter with a capital of NT$6 million (US $200,000). According to the regulations of the Immigration Department, an investment of US $200,000 US in Taiwan can apply for an investment residence permit.
4. The capital is more than NT$15 million
When your capital is more than NT$15 million, we can call it an investment immigration. By setting up a company in Taiwan, investing more than NT$15 million in three years, and creating five local job opportunities, you will be qualified to get a plum card.
Set-up Procedures
If overseas Chinese and foreign investors want to set up a company in Taiwan, they must be approved by the Investment Review Board before commencing investment. The committee members of the Investment Review Board will review whether the applicant’s academic experience and career plan are reasonable and feasible. The review process is very rigorous. If the funds originated from unknown sources, the application will not be accepted. Any funds must be accompanied by proof of source to prevent money laundering. These funds can be divided into two categories.
1. Funds from foreign sources (remitted or carried)
2. Funds obtained in Taiwan (work or gift)
Finally, after the approval and release of investment, you can put your funds into the bank’s preparatory account to settle the foreign exchange as much as possible, and report the status of the fund remittance to the investment review committee. So the follow-up process is really no different from establishing a general company. You can contact me for the detailed process of how to set-up your company successfully.
Work permit and residence permit issues
In general, one of the most important considerations for foreigners are work permits and residence permits. Because these two represent the legal right to stay in Taiwan. So what is the relationship between these two permits?
First of all, we must understand that these two permits are issued by different ministries. One is the Ministry of Labour and the other is the Immigration Department.
In summary, the sequence of obtaining a work permit in Taiwan is to apply for a residence permit after the work permit is issued. That is, the employer applies for a work permit for you initially, then you apply for a visa to come to Taiwan. Once you arrive in Taiwan, you can change your visa into a residence permit. However, the process can also be reversed. For instance, students will first have a residence permit for studying and subsequently apply for a work permit if they want to pursue employment opportunities in Taiwan.
To put it in simple terms, a foreigner must have a work permit before he/she can engage in work and receive salary in Taiwan. Any employment activities will be deemed illegal unless he/she has a permanent residency or dependents such as spouse in Taiwan in accordance with Taiwan employment law.
Case scenarios
1. Lucy is an American citizen. She married a Taiwanese this year. She came to Taiwan based on the residence permit and wanted to open a company to sell some daily products.
Based on this scenario, Lucy has a spouse in Taiwan and hence she can work freely in Taiwan in accordance with the law. Lucy can freely choose type of businesses she wants to operate. If it is only a small-scale business, she can also apply for the exemption of the invoices.
2. Lucy wants to hire an American marketing expert to take care of business operations.
According to this scenario, Lucy must invest at least NT$500,000 in capital (including 1/3 of foreign capital) to set up a company before she is qualified to hire a manageror a marketing expert to work in Taiwan.
3. Ahmed is an Egyptian. He came to Taiwan alone to find that Taiwan’s car products are strong and want to retail them back to Egypt.
Based on this scenario, Ahmed has no reason for residency. He can set up a one-person company and invest NT$500,000 as capital, and hire himself as a manager to operate import and export business in Taiwan. However, it must be noted that the work permit obtained in the first year will expire. If you want to continue the validity of the work permit; you will need an average annual turnover of NT$3 million or US$500,000. If you meet this requirement, you can continue to renew the work permit.
In summary
For overseas Chinese and foreign investors to do business in Taiwan, the biggest difficulty is not the set-up process. Although the process is complicated and lengthy (knowing Chinese will certainly help), the steps are clear. The crucial factor however is paying attention to the company operations and employment issues as they can be quite different. Each case is unique and can be tailored to your needs. Fastart is an expert in this field. The company will need to be set up properly from the beginning to save you time and issues related to the operational aspect. Fastart has a lot of successful experiences to set up different companies in Taiwan. We have professional overseas and foreign investment commissioners. Fastart can tailor to each unique case of your business requirements. Give us a call or write to us to discuss your best option.
