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1.1.1. Main Forms of Doing Business

Taiwan law provides for various business forms based on the needs of the investor, including incorporated companies (subsidiaries), branch offices, representative offices, partnerships and sole proprietorships. The business types are similar in formation and treatment for both foreign and local investors, however there are some differences, such as being subject to restrictions on foreign investments outlined in the Negative List for Investment by Overseas Chinese and Foreign Nationals. The main business forms include:

Incorporated Company (Subsidiary)

Incorporated companies are legally incorporated profit-seeking entities established in Taiwan. Foreign parent companies incorporate a subsidiary company with 100% ownership. Subsidiaries, like domestically owned incorporated companies, are treated as independent legal entities and may conduct full business operations in Taiwan and are afforded the same rights and obligations as domestically owned companies.

Taiwan incorporated companies (subsidiaries) can be formed as:

  • A Company Limited by Shares established by at least two individuals or at least one corporate shareholder. The capital must consist of shares and each shareholder is liable up to the amount of shares subscribed for.
  • A Limited Company established by one or more shareholders with liability limited only to the extent of the amount of their capital contribution.  

Most subsidiaries are formed as a company limited by shares.

Taiwan law also allows for unlimited companies and unlimited companies with limited shareholders, though these are rarely used.

Branch Office

Branch offices are profit-seeking business entities established in Taiwan. They are afforded the same rights and obligations of domestic companies, but unlike a subsidiary, a branch office is not a separate legal entity from its parent company.

Representative Office (Rep. Office)

A Rep. Office in Taiwan represents the interests of the foreign investor by acting as a liaison office for the parent company.

Partnerships and Sole Proprietorships

Partnerships and sole proprietorships can be formed to conduct business in Taiwan by both local and foreign natural persons. Both are subject to unlimited liability.

Joint Ventures

Joint ventures are not a defined entity type per se, although Taiwan does allow foreign and local parties to jointly conduct business. Such ventures can be in the form of jointly held incorporated companies or partnerships of natural persons.