Setting Up a Company in Taiwan
Taiwan is East Asia's semiconductor hub and a mature common-law-influenced jurisdiction — 100% foreign ownership is standard, and the government actively courts foreign technology investment.
Taiwan is home to TSMC and a world-class semiconductor, electronics and precision manufacturing ecosystem. It offers foreign investors a transparent legal system, reliable IP protection, a highly skilled workforce and direct access to cross-strait supply chains. The Act Governing Relations between the People of the Republic of China and Mainland China creates specific rules for Chinese investors; all other nationalities operate under the standard Company Act framework with minimal restrictions.
Key facts for 2026
| Parameter | Detail |
|---|---|
| Corporate income tax | 20% (standard rate) |
| VAT (Business Tax) | 5% (standard); 0% (exports) |
| Foreign ownership | 100% for most activities (no local partner required) |
| Minimum capital | No statutory minimum (NTD 1 permitted for most companies) |
| Undistributed earnings surtax | 5% on retained profits not distributed after 2 years |
Corporate structures
The Company Limited by Shares (股份有限公司 — Gufen Youxian Gongsi) is the main vehicle for medium-to-large foreign investors — it can issue shares, have unlimited shareholders and is required for listed companies. The Limited Company (有限公司 — Youxian Gongsi) is a simpler structure for SMEs with up to 50 shareholders. Foreign companies can also register a Branch or a Liaison Office (non-trading). All foreign investment registration is handled through the Investment Commission of the Ministry of Economic Affairs (MOEAIC).
Restricted sectors for foreign investment
Taiwan maintains a Negative List for foreign investment (the "Prohibited and Restricted Items" list under the Statute for Investment by Foreign Nationals). Prohibited sectors include some agricultural activities, certain media and publishing activities, and industries designated for national security reasons. Restricted sectors (requiring prior MOEAIC approval or capped foreign ownership) include some utilities, transport and financial services. Chinese investment is subject to a separate, more restrictive approval process regardless of sector.
Export Processing Zones and Science Parks
Taiwan's Export Processing Zones (EPZs) and Science-Based Industrial Parks (Hsinchu, Tainan, Central Taiwan) offer duty-free importation of equipment and raw materials, simplified customs procedures and access to government R&D support. The Hsinchu Science Park hosts TSMC, MediaTek and hundreds of semiconductor and technology firms — co-location provides supply-chain proximity, talent access and a well-developed support ecosystem.
The incorporation process
- Check the Negative List through MOEAIC's investment inquiry service.
- Obtain MOEAIC approval for foreign investment (most activities: streamlined online application, 2–5 business days).
- Register the company with the Ministry of Economic Affairs Company Registration system.
- Obtain a Unified Business Number (統一編號) — Taiwan's company tax ID.
- Register for Business Tax (VAT) with the National Taxation Bureau.
- Open a corporate bank account — requires MOEAIC approval letter and Company Registration.
- Register employees with the Bureau of Labor Insurance and National Health Insurance Administration.
Frequently asked questions
Can a foreigner own 100% of a Taiwan company?
Yes, for most activities. Foreign nationals from all countries except mainland China can own 100% of a Taiwanese company without restriction under the Statute for Investment by Foreign Nationals, subject to the Negative List.
What is the corporate tax rate in Taiwan?
20% standard rate. A 5% surtax applies to undistributed earnings not distributed within two years of earning — this incentivises dividend distribution and is a distinctive feature of Taiwan's tax system.
What is the VAT rate in Taiwan?
5% Business Tax (Taiwan's VAT equivalent) on most goods and services. Exports are zero-rated. Financial services, insurance and certain services are exempt or pay a different rate.
What makes Taiwan attractive for technology companies?
World-class semiconductor and electronics supply chains, strong IP protection, a highly educated STEM workforce, R&D tax credits of up to 25%, and proximity to major Asian markets — combined with a transparent legal system and no requirement for a local partner.
Official sources
- InvesTaiwan — Investment Commission MOEAIC
- MOEA Company Registration System
- National Taxation Bureau
- Statute for Investment by Foreign Nationals; Company Act (as amended)
This guide is general information prepared by ARM Management and is current as at July 2026. It is not legal advice; sector restrictions, tax rates and registration procedures change over time. Confirm with MOEAIC or a Taiwan-qualified advisor before incorporating.
Access Taiwan's technology ecosystem through the right corporate structure.
ARM Management advises foreign investors on Taiwan company formation, MOEAIC approval, Science Park applications and ongoing tax compliance.