{"id":852,"date":"2014-11-14T16:31:59","date_gmt":"2014-11-14T08:31:59","guid":{"rendered":"http:\/\/www.hccpa.com.tw\/en\/?p=852"},"modified":"2021-06-27T02:21:18","modified_gmt":"2021-06-26T18:21:18","slug":"tax-implication-on-different-company-types-in-taiwan","status":"publish","type":"post","link":"https:\/\/www.hccpa.com.tw\/en\/?p=852","title":{"rendered":"Tax Implication on Different Company Types in Taiwan"},"content":{"rendered":"<h5>Adjacent to Mainland China with its opened-economy and less strict regulations, Taiwan bears a unique position of entering into Asian markets. Taiwan also bears relatively lower cost-of-living\u00a0standard comparing to other developed Asian countries.<\/h5>\n<h5>The first step of\u00a0doing business\u00a0in Taiwan is usually to select a company type. Below we list out the most common company types with its tax implications.<\/h5>\n<ul>\n<li><strong>Representative Office<\/strong><\/li>\n<\/ul>\n<h5>A\u00a0representative office is not allowed to\u00a0conduct profit-generating activities. It is only allowed to conduct ancilliary\/solicitation services to its foreign counterparts, such as purchase materials or equipment and marketing services.<\/h5>\n<ul>\n<li><strong>Branch Office of a Foreign Company<\/strong><\/li>\n<\/ul>\n<h5>A Branch office is treated as\u00a0any other companies in Taiwan. It is allowed to conduct any\u00a0kinds of profit-seeking activities,\u00a0as long as its\u00a0not illegal. In addition, it enjoys certain tax benefits from Taiwan tax perspective, such as no withholding tax when repatriating profits back to its foreign counterparts.<\/h5>\n<ul>\n<li><strong>Company Limited by Shares<\/strong><\/li>\n<\/ul>\n<h5>&#8220;Company Limited by Shares&#8221; is very similar to a &#8220;Limited Company (&#8220;Ltd.&#8221;) in the US, and is the most common company types in Taiwan. The shares of which are in the form of share certificates, where the profit allocation is based on the shares each shareholders own. In addition, it enjoys certain R&amp;D tax incentives in Taiwan; and when sale of the shares of the company, only 0.3% of securities transaction tax is applied.<\/h5>\n<ul>\n<li><strong>Small-Scale Limited Company<\/strong><\/li>\n<\/ul>\n<h5>A Limited Company is usually for those smale-scale companies where the working capital of which is rather small. The company structure of which is usually simple with minimal hierarchy.<\/h5>\n<h5><\/h5>\n<h5>We summarize in below table a comparison for the two most common company types that foreign investors would choose when investing in Taiwan.<\/h5>\n<p><span style=\"font-family: \u65b0\u7d30\u660e\u9ad4;\">\u00a0<\/span><\/p>\n<table border=\"1\" cellspacing=\"0\" cellpadding=\"0\">\n<tbody>\n<tr>\n<td valign=\"top\" width=\"262\"><span style=\"font-family: \u65b0\u7d30\u660e\u9ad4;\">\u00a0\u00a0 <\/span><\/td>\n<td valign=\"top\" width=\"142\">\n<p align=\"center\"><strong>Foreign branch<\/strong><\/p>\n<\/td>\n<td valign=\"top\" width=\"153\">\n<p align=\"center\"><strong>Company Limited by Shares<\/strong><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td valign=\"top\" width=\"262\">\n<h5>Corporate\u00a0 income tax<\/h5>\n<\/td>\n<td valign=\"top\" width=\"142\">\n<h5 align=\"center\">17%<\/h5>\n<\/td>\n<td valign=\"top\" width=\"153\">\n<h5 align=\"center\">17%<\/h5>\n<\/td>\n<\/tr>\n<tr>\n<td valign=\"top\" width=\"262\">\n<h5>10%\u00a0 surtax on undistributed retained earnings<\/h5>\n<\/td>\n<td valign=\"top\" width=\"142\">\n<h5 align=\"center\">N\/A <strong>(tax-efficient)<\/strong><\/h5>\n<\/td>\n<td valign=\"top\" width=\"153\">\n<h5 align=\"center\">Yes<\/h5>\n<\/td>\n<\/tr>\n<tr>\n<td valign=\"top\" width=\"262\">\n<h5>Withholding\u00a0 tax\u00a0when remitted back profits to VadaTech<\/h5>\n<\/td>\n<td valign=\"top\" width=\"142\">\n<h5 align=\"center\">N\/A <strong>(tax-efficient)<\/strong><\/h5>\n<\/td>\n<td valign=\"top\" width=\"153\">\n<h5 align=\"center\">Yes<\/h5>\n<\/td>\n<\/tr>\n<tr>\n<td valign=\"top\" width=\"262\">\n<h5>R&amp;D\u00a0 credits and incentives<\/h5>\n<\/td>\n<td valign=\"top\" width=\"142\">\n<h5 align=\"center\">N\/A<\/h5>\n<\/td>\n<td valign=\"top\" width=\"153\">\n<h5 align=\"center\">Yes<\/h5>\n<h5 align=\"center\"><strong><em>(If you are to form a &#8220;R&amp;D intensive company, this is the best choice.)<\/em><\/strong><\/h5>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n","protected":false},"excerpt":{"rendered":"<p>Adjacent to Mainland China with its opened-economy and &#8230;<\/p>\n","protected":false},"author":3,"featured_media":5940,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[25],"tags":[],"class_list":["post-852","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/www.hccpa.com.tw\/en\/index.php?rest_route=\/wp\/v2\/posts\/852","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.hccpa.com.tw\/en\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.hccpa.com.tw\/en\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.hccpa.com.tw\/en\/index.php?rest_route=\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.hccpa.com.tw\/en\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=852"}],"version-history":[{"count":8,"href":"https:\/\/www.hccpa.com.tw\/en\/index.php?rest_route=\/wp\/v2\/posts\/852\/revisions"}],"predecessor-version":[{"id":868,"href":"https:\/\/www.hccpa.com.tw\/en\/index.php?rest_route=\/wp\/v2\/posts\/852\/revisions\/868"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.hccpa.com.tw\/en\/index.php?rest_route=\/wp\/v2\/media\/5940"}],"wp:attachment":[{"href":"https:\/\/www.hccpa.com.tw\/en\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=852"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.hccpa.com.tw\/en\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=852"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.hccpa.com.tw\/en\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=852"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}