Incorporated Company (Subsidiary)

• Can only be established for profit seeking business activities
• A company limited by shares requires at least two shareholders, must have at least three directors, and one supervisor. May transfer shares, but initial shareholders may not transfer their initial shares within one year after incorporation
• A limited company must have at least one shareholder and one director
• May not engage in prohibited business according to the Negative List for Investment by Overseas Chinese and Foreign Nationals
• Must go through additional approval processes and have their business scope potentially limited for business types that are restricted according to the Negative List for Investment by Overseas Chinese and Foreign Nationals
• Companies which fail to engage in business within 6 months of their registration or who cease operation without proper application may be subject to dissolution by the Taiwan authorities, which include liquidation
• Minimum number of board meetings has not been set, but the directors must convene at least one shareholders meeting within 6 months of the fiscal year end
• Unless proxy representation is allowed under articles of incorporation, a director must attend board meetings in person. However, video conferences are allowed and considered to be in person
• May not pay dividends or bonuses unless losses have been covered and a statutory reserve has been set aside. The statutory reserve is 10% of profits after tax. Once the reserve is equal to 50% of the registered capital, the company can pay dividends and bonuses. Once the reserve reaches the total amount of capital, the company no longer needs to set aside any amounts for the reserve
• May require particular business licenses or permits depending on the nature of the business - activities requiring special permission must be specified in the articles of incorporation

Branch Office

• Liabilities extend to parent company
• Requires 1 authorized litigation / non-litigation agent in Taiwan
• Requires 1 authorized branch manager
• May require particular business licenses or permits depending on the nature of the business

Representative Office

• Are not legal entities
• May not engage in business transactions
• Requires 1 authorized litigation / non-litigation agent in Taiwan
• Requires 1 authorized legal representative

Partnerships and Sole Proprietorships

• Sole proprietors and partners are personally liable for all debts and liabilities of the business, cannot form limited partnerships
• Only natural persons can be partners, including foreign persons
• Non-resident partners are subject to withholding tax
• May require particular business licenses or permits depending on the nature of the business

Joint Ventures

Same constraints as above depending upon the type of entity used.