Introduction to Capital Amount of Taiwan Company
In Taiwan, companies can be categorized into three types: limited company, limited company by shares and foreign branch office. According to Taiwan’s Company Act, when establishing a company, the founders (shareholders) must hold a meeting to determine the company’s capital amount. The funds should then be transferred to the company’s designated bank account, and a certified public accountant must complete the capital verification before applying for company registration. The capital amount can be understood as the initial operating funds registered for the company. Currently, there is no minimum capital requirement; however, it must be reasonably sufficient to cover the company’s expenses for the first year, including rent, salaries, office equipment, and other costs.
In Taiwan, a limited company has only a total capital amount. Once the shareholders have determined the capital amount in the articles of incorporation, the actual funds must be in place in order to establish the company. A foreign branch office in Taiwan is referred to as “operating capital.” Similar to a limited company, once the amount is decided the full amount must be actually transferred. In the case of a limited company by shares in Taiwan, the company’s articles of incorporation may specify both the “authorized capital” and the “paid- in capital.” And the board of directors is authorized to issue shares in stages. Only the contribution amount for the paid-in capital needs to be transferred.
For example, K Limited Company by Shares set its authorized capital at TWD 1,000,000 in the article of incorporation, but only TWD 500,000 worth of shares were issued at the time of establishment. The authorized capital of A Limited Company by Shares is TWD 1,000,000, but the paid-in capital is TWD 500,000, meaning the shareholders are required to transfer TWD 500,000 into the company’s bank account.
After the establishment of a company in Taiwan, the capital amount transferred into the company can be used to cover various expenses. All expenses must be supported by receipts and be related to the company’s operations in order to be recorded. However, it is important to note that the capital amount cannot be arbitrarily returned to the shareholders, as this could be considered as artificially inflating the capital. The company’s responsible person may face imprisonment of up to five years, detention, or fines ranging from TWD 500,000 to TWD 2,500,000. Both the company’s responsible person and shareholders may be jointly liable for compensating the company. Additionally, Taiwan’s Ministry of Economic Affairs has the authority to revoke the company’s registration.
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