Taiwan Branch Office Registration Guidance-Company Formation_Trademark Registration_Tax Service - Hong Kong CPA

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Service Scope KAIZEN CPA provides Audit , Accounting, Tax Advisory, Hong Kong Company Formation, Offshore Company Registration, China Company Formation, Trademark Registration, Tax Service.

Taiwan Branch Office Registration Guidance

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Foreign company including the company registered in Hong Kong, Macau and Mainland China which intends to invest in Taiwan can consider establishing a limited company by shares, limited company, or branch office. Among the aforementioned 3 types of structures, branch office is the most popular option for foreign investors to establish in Taiwan, since the overall taxation system for branch office is averagely lower than others.

The purpose of this article is to make a brief introduction about the feature, procedure, and required documents for client's reference.

Features

Name

The official format of Taiwan branch office is “Place of Incorporation of Parent Company + Intended Company Name + Taiwan Branch Office”, such as Hong Kong Kaizen CPA Limited Taiwan Branch Office. The name of branch shall be approved by MOEA (Taiwan company registration and compliance authority) initially.

Managerial Officer

Upon the application of establishment of Taiwan branch office, foreign company shall assign one person to be the managerial officer for the branch at least to deal with the affairs in Taiwan. The responsibility of managerial officer is to handle all affairs within the territory of Taiwan, but the status is different from the litigious and non-litigious attorney. The managerial officer can be assigned the local Taiwanese person or foreigners (including residents from Hong Kong and Macau, but residents from Mainland China) to act as and the number of managerial officers is allowed to assign more than 2 persons, but such officer shall have the residency in Taiwan.

Litigious and Non-litigious Attorney

Due to the nature of branch office not affiliated as single juridical person, it is not allowed to make or face an appeal from others, so each branch office shall designate a litigious and non-litigious person in accordance with Company Act in Taiwan to deal with the appeals. Such person can be Taiwanese local citizens or foreigners (including residents from Hong Kong and Macau, but residents from Mainland China).

Business Address

Each branch office is required to register a business address in Taiwan, which shall be situated at a commercial center or building. Investors shall make a rental agreement with the owner of office so as to provide MOEA for registration (recognition) of business address.

Working Capital (Capital Contribution)

The required minimum amount of contribution capital is cancelled from Company Act. Since branch office is not affiliated as a single juridical person, the concept of capital contribution is discrepant with the parent company. However, the amount of capital contribution is required to be stated clearly upon submitting the application of establishment to MOEA and such equivalent amount of capital shall be remitted into the preparatory account of branch office for MOEA’s verification. Therefore, it is suggested for investors that the registered amount of contribution capital shall be based on the practical requirement of branch office.
The amount of contribution capital shall be remitted into the preparatory account of branch office from the corporate account of parent company by the registration of branch office. Such amount of contribution capital shall be audited generated a copy of certificate by a certified accountant in Taiwan.

Language

All application documents are required to be in Chinese. The registration documents are not stated any other foreign language but Chinese. In the circumstance of the branch office which required to apply for the registration of import and export, the branch office name in English can be stated and registered in Trade Bureau upon the approval of application.

Authorized Agent

Foreign company shall authorize a Taiwanese local citizen to act as the investment agent on behalf of the parent company to register the branch office. Such agent is usually a professional consultancy agent, such as Kaizen.

Taxation

The profit-seeking enterprise income tax rate for branch office of foreign company is 20%, the distribution of dividends after taxation rate in 0%. Since the branch office is a part of parent company, so it is not necessary to pay the taxes to Taiwan government upon distribution of dividends after taxation. However, in the circumstance of the distribution of dividends incurred from the investment in other enterprises under the name of branch office, such distribution shall be imposed with the income tax rate in 21%. In conclusion, it is much beneficial for foreign investor to choose branch office to invest.

Procedure

Preparation

Before submitting an application to MOEA and related competent authorities, the investor shall prepare the following things in advance:

(1)	Rental of Office The investor shall rent an office at the city of branch office with an official rental agreement, such as Taipei, Taichung, or Tainan. Such office shall be situated at a commercial center or building, and the rental period shall not be less than 12 months.
(2)	Notarization of Proof of Identity of Investor The proof of identity of parent company shall be notarized by Taiwan ambassador, consulate, or authorized entity by Taiwan government. Generally speaking, the required documents to notarize are certificate of incorporation, business license, and documents stated the information of shareholders and directors of parent company.
(3)	Notarization of POA Foreign company shall authorize a Taiwanese local citizen to act as the investment agent on behalf of the parent company to register the branch office. In addition, the investor shall make a statement of POA (Power of Attorney) to authorize the agent to deal with the affairs of establishment. Such POA shall be notarized by Taiwan ambassador, consulate, or authorized entity by Taiwan government. If the director (responsible person) has already resided in Taiwan, the procedure of notarization can be proceeded directly.
(4)	Notarization of Minutes of Shareholder or Director Meeting The investor shall create a copy of shareholder or director meeting minutes in regard to the resolution of establishment of Taiwan branch office.
(5)	Other documents and information Investor also shall prepare the photocopy of proof of identity and residency of authorized agent in Taiwan in advance.

Procedure

(1)	Company Name Reservation The first step of establishment of Taiwan branch office is to confirm the intended name of branch office in MOEA is registered or not. After confirmation, the application of name reservation can be proceeded in MOEA.
(2)	Preliminary Registration The application documents shall be submitted to investment commission, MOEA for initial examination.
(3)	Engraved of Stamps To engrave the stamps of branch office and responsible person is the necessary step for bank account opening.
(4)	Opening of Preparatory Account The responsible person of branch office is required to present at the bank personally to proceed the opening of preparatory and normal account.
(5)	Remittance of Contribution Capital Upon the opening of preparatory account, the investor (parent company) shall remit the amount of contribution capital into it. The amount is required to be remitted from the corporate account of parent company.
(6)	Audit by A Certified Accountant The investor shall provide a Taiwan certified accountant with the proof of remittance to audit and generate the certificate of arrival of contribution capital.
(7)	Registration of Establishment The investor shall submit the application documents with the certificate of arrival of contribution capital to MOEA for establishment of branch office.
(8)	Registration of Tax ID For registration of profit-seeking enterprise in Taxation Bureau, the competent authority will issue the investor a piece of “ID Card” for Tax ID registration. The registration can be divided into registration in Taxation Bureau and registration of land value tax these two types of registrations.
(9)	Uniform Invoice Purchase Certificate The purpose of this certificate is to purchase the uniform invoice which printed by Taiwan government. The responsible person shall visit Taxation Bureau for signature and conversation with the person-in-charge personally. Otherwise, the purchased amount of uniform invoice will be restricted by requirement of presenting the uniform purchase certificate to buy the uniform invoice of next term.
(10)	Registration of Import and Export If the branch office plans to undertake import and export business, or export the equipment from foreign countries, the registration in Trade Bureau is required to be done in advance after finishing the abovementioned procedures.

Processing Times

Generally, the processing time of establishment of a branch office requires 4-6 weeks. The schedule in details as following table:

No.	Item.	Business Days
1	Rental Office	1
2	Notarization of Incorporation Documents of Parent Company	5
3	Other Documents of Materials	2
4	Company Name Reservation	2
5	Application of Initial Establishment Registration	6
6	Engrave Stamps	2
7	Opening of Bank Account- Preparatory Account	1
8	Capital Audited by a Certified Accountant	5
9	Application of Official Establishment Registration	6
10	Application of Tax ID Registration	5
11	Application of Uniform Invoice Purchase Certificate	6
12	Opening of Bank Account- Official Account (Depending on Each Bank Schedule)	5-10
13	Application of Import and Export Registration	1

Remark: The abovementioned estimated business days excluding the application of special approval or licenses for investors.

Required Documents List

Intended Branch Office Name

The translated name of parent company. It is required to state the place of incorporation of parent company.

Business Scope (Main Business)

The business scope (main business) of branch office for registration.

Minutes of Meeting

Upon the resolution to establish a branch office in Taiwan by the board of directors of parent company, the minutes of meeting or resolution about establishment of branch office in Taiwan, authorization of managerial officer and litigious and non-litigious attorney shall be made.

Notarized Certificate of Incorporation of Parent Company

The proof of identification of shareholder shall be notarized by Taiwan ambassador, consulate, or certified institution abroad (The proof of identification can be passport for individuals; certificate of incorporation and article of association for juridical persons, which aforementioned documents shall be notarized by the mentioned representative entities in the place of investors.). The validity of such notarization is within one year, which is required to be sealed on perforation.

Notarized Proof or Identification of Agent and POA

The proof of identification of investment agent and POA shall be notarized by Taiwan ambassador, consulate, or certified institution in the place of investor. POA is required to be notarized by a legal local lawyer initially, then by Taiwan ambassador or consulate secondly. The validity of such notarization is within one year.

Notarized Poof of Identification of Managerial Officer

Upon the resolution of assignment of managerial officer by the investor, POA of authorization of managerial officer shall be made by the parent company and the notarization of proof of identification of managerial officer and POA shall be finished in advance.

Rental Agreement

The rental agreement for business address of branch office shall be sealed at first. The investor shall sign a rental agreement of the owner of office and obtain the letter of consent and the house tax statement within the recent one month from the landlord.

Opening of A Bank Account

The parent company shall select a bank to open the bank account first. Upon the registration of establishment, the preparatory account shall be activated for remittance of contribution capital from the parent company.

Working Capital

There is no certain article to state how the working capital (which idea is similar to the contribution capital for company limited and shares for company limited by shares) shall be operated in Company Act, except those that are subject to special approval or licenses. However, the investor shall state the estimated working capital on the application document and remit such amount of working capital to the preparatory account within the procedure of registration. Thus, it is suggested to state the amount of working capital more than NTD$500,000 to maintain the operation of branch office within the first half year.
Certificate and Documents

After finishing the whole procedure of registration, the investor shall obtain the following certificates and documents to prove the branch office is established legally:
Foreign Company Registration Form
Branch Office Establishment Approval Letter and Registration Form
Branch Office Tax ID Registration Form
Branch Office Tax ID Registration Approval Letter
Stamps of Branch Office and Responsible Person
Uniform Invoice Purchase Certificate
Import and Export Registration

Deregistration

Withdrawal of Recognition
In the circumstance that the foreign company intended to close its business within the territory of Taiwan, the resolution of deregistration by the board of director shall be made and the application of deregistration shall be submitted to the competent authority. Upon the approval of such deregistration obtained from the competent authority, the procedure of liquidation shall be proceeded to the court followingly.

Note

The competent authority of company registration and compliance in Taiwan reserves the rights to withdraw the registration of Taiwan branch office as occurrence of below conditions:

(1)	The application documents or information were submitted in false intentionally.
(2)	Dissolution of parent company
(3)	The parent company is clamed to become bankrupt. The branch office is forced to be deregistered owing to such fact, which shall not affect the power or rights of debtors.

The competent authority reserves the rights to force the branch office dissolved from the application submitted by the stakeholders as occurrence of following conditions:

(1)	Branch office has not been in operation within 6 months after registration, except for the application of extension submitted; or
(2)	The business has been closed for more than 6 months, except for the suspension of business registered.

Consolidation of Parent Companies

If the parent company is consolidated with the other foreign company or purchased by another foreign company after the registration of branch office, the surviving branch office shall submit an application of change of company name and recognition to the competent authority if ongoing running business is intended. It is not necessary to apply for the registration of establishment of branch office once again.
Management and Maintenance

According to the prescribed laws and regulations, the renewal of accounting books generation of financial statement, and declaration of profit-seeking enterprise income tax, business tax and other types of taxes by the prescribed tax laws after the establishment of branch office is registered officially. In the condition that the registration items of branch office changed, such changes shall be submitted to the competent authority for record. In regard to the maintenance of branch office, please refer to the “Taiwan Branch Office Management and Maintenance Guidance” generated by us respectively.

Disclaimer

All information in this article is only for the purpose of information sharing, instead of professional suggestion. Kaizen will not assume any responsibility for loss or damage.

If you wish to obtain more information or assistance, please visit the official website of Kaizen CPA Limited at www.kaizencpa.com or contact us through the following and talk to our professionals:
Email: info@kaizencpa.com
Tel: +852 2341 1444
Mobile : +852 5616 4140, +86 152 1943 4614
WhatsApp/ Line/ WeChat: +852 5616 4140
Skype: kaizencpa

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Taiwan Branch Office Registration Guidance

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