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[ESTABLISHING A BUSINESS ENTITY IN TAIWAN]
ESTABLISHING A BUSINESS ENTITY IN TAIWAN
Introduction to Taiwan In less than 50 years starting from 1949, Taiwan went from an agriculture-based economy to being an economic powerhouse and leader in the field of high-tech goods. Its Gross Domestic Product (GDP) grew from US$1.2 billion in 1951 to US$828.6 billion in 2022. According to the World Trade Organization, in 2022, Taiwan was the 17th largest exporter and importer of goods in the world. In terms of services, Taiwan ranked 26th for the export and 31st for the import of commercial services, respectively. In the same year, its services sector accounted for nearly 60.85% of its GDP, while manufacturing and construction accounted for 34.17% and 3.27%, respectively. Taiwan, as a leader in the information and communications technology industry, is one of the world's largest semiconductor, computer and mobile phone providers, and one of the world's largest producers of computer monitors. 1. Types of Business Entities
company is managed by the directors elected by the shareholders and the profits are shared among the shareholders. The liability of shareholders is limited to the extent of the capital contributed by each of them, except where the shareholder abuses the company’s status as a legal entity thereby causing the company to bear specific debts. Company limited by shares A company limited by shares must be organized by two or more shareholders, except where the company is incorporated by a single corporate or governmental shareholder. A company limited by shares may choose to issue all of its shares either with or without a par value. For the former, the capital of the company should be divided into shares of the same par value (other than preferred shares). For the latter, the amount paid for subscribing to such no par value shares shall be fully set aside as equity capital, and the company may not convert the shares into par value shares. The liability of shareholders shall be limited to payment in full of the shares they have subscribed. Most foreign investors operate through companies limited by shares in Taiwan. Branch A branch office is an extension of a foreign company conducting business in Taiwan. A branch office must be duly established before a foreign company conducts business in Taiwan in its name. Since a branch office is not an independent legal entity but a part of the foreign company, all the liabilities of the branch will be extended to the foreign head office if the assets of the branch are not sufficient to satisfy all its indebtedness.
Description of the types of entities available in each jurisdiction through which to conduct business
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There are various legal forms for business that foreign entities can use to do business in Taiwan. We set out below a general and brief introduction to various forms of business entities under the Company Act, last amended on December 29, 2021, that foreign investors may choose from to do business in Taiwan. If a foreign investor desires to do business in Taiwan, it may establish a branch office or a new company. Limited company A limited company is a closed company with one or more shareholders, and its capital is paid up by its shareholders. A limited
ILN Corporate Group – Establishing a Business Entity Series
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