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Setting Up Business in Taiwan: A Comprehensive Guide to KYC and Foreign- Funded Limited Liability Companies

In the bustling business landscape of Taiwan, proving ground for numerous multinational corporations, the Know Your Customer (KYC) process has become a mandatory requirement before engaging in any business assignment. Here’s how it works for those looking to establish a Foreign- Funded Limited Liability Company (LLC).

Contact Information

Contact Director Jerry Chu, an experienced professional with a US graduate degree, excellent English skills, and solid understanding of Taiwan regulations, at tpe4ww.elr@evershinecpa.com or call +886-939-357-735 (mobile) or +886-2-2717-0515 ext. 103 (office).

Types of Foreign-Funded Companies in Taiwan

Foreign-funded companies in Taiwan come in different forms:

  • Branch Offices
  • Companies Limited by Shares
  • Closed-held Companies
  • Limited Partnerships
  • Representative Offices

In this article, we will focus on Foreign- Funded Limited Liability Companies (LLC).

Setting Up a Foreign-Funded Limited Liability Company

Setting up a Foreign- Funded Limited Liability Company involves several steps:

  • Choose a name for your company
  • Carry out a name search with the Taiwan Ministry of Economic Affairs

Step 2: Obtain Foreign Investment Approval (FIA)

  • If any shareholder is a foreign national, obtain FIA from the Investment Commission
  • Subscribe for shares and pay the subscription price

Step 3: Hold Shareholders’ Meeting and Elect Directors and Supervisors

  • Hold a shareholders’ meeting to elect directors and supervisors (unless the company only has a sole corporate shareholder)
  • Elect a chairman of the board

Step 4: Prepare Company Documents

  • Prepare the company’s articles of incorporation and other necessary documents
  • Including a feasibility study, a capital verification report, and a power of attorney if needed

Step 5: Apply for Incorporation Registration

  • Apply for incorporation registration with the Ministry of Economic Affairs (MOEA)

Step 6: Open Bank Account and Deposit Required Capital

  • Open a bank account
  • Deposit the required capital

Step 7: Submit Capital Verification Certificate

  • Submit the capital verification certificate to the business registration authority to complete the registration process

Step 8: Obtain Approval and Registration from Relevant Authorities

  • Obtain approval and registration from the relevant authorities, including:
    • Tax authorities
    • Bureau of Labor, Occupational Safety and Health
    • Ministry of Economic Affairs

Qualifications for Holding Positions in a Taiwanese Foreign-Funded Company

When holding a position in a Taiwanese Foreign- Funded Company, there are specific qualifications that individuals must meet, including:

Directors

  • Natural persons who can be elected or appointed by the board of directors
  • No specific citizenship or residency requirements
  • A Company Limited by Shares must have a minimum of three directors

Supervisors

  • Natural persons who can be elected or appointed by the board of directors or shareholders
  • At least one being a resident of Taiwan

Company Secretaries

  • There is no legal requirement for a company secretary, but they can be a company employee or external appointee with the necessary professional qualifications

Shareholders’ Rights and Responsibilities

Shareholders of a Taiwan Foreign- Funded Limited Liability Company may freely transfer their shares, subject to:

  • The company’s articles of incorporation
  • Relevant laws and regulations
  • There is no set time for holding the share capital before selling

Resident Shareholder Requirements

A Resident Shareholder is not mandatory for the incorporation of a Taiwan Foreign- Funded Limited Liability Company. However, foreign nationals or companies must obtain foreign investment approval.

The legal representative of a Taiwan Foreign- Funded Limited Liability Company can be a foreigner with:

  • A valid residency permit
  • Required approval from the Taiwan government

Conclusion

In conclusion, the KYC process is an integral part of setting up a Foreign-Funded Limited Liability Company in Taiwan. To ensure a successful business venture, it’s crucial to understand the various requirements, regulations, and procedures involved.