Taiwan makes company formation genuinely easy for foreigners, but it has one quirk almost no other country in this series shares: leave too much profit sitting undistributed in the company at year-end, and you owe an extra 5% surtax on it. Here's what it takes to start a business in Taiwan in 2026.
1. Which business structure fits you?
Before you register anything, it helps to know what you're actually choosing between.
- Limited Company (LLC). The most popular structure for foreign investors: just one shareholder and one director, no statutory minimum capital, and fewer administrative requirements than a full corporation. At least one managing director must be a Taiwan resident.
- Branch Office. Suits foreign companies expanding their existing global presence, but lacks legal independence and can expose the parent company to liability.
Sole proprietorships are only available to Alien Permanent Resident Certificate (APRC) holders or ROC nationals, not a standalone option for a non-resident foreign founder. If you just want to work for yourself legally without forming a company at all, Taiwan's Gold Card, a special visa for qualifying professionals, is the more direct route; a dedicated digital nomad visa has been discussed but wasn't implemented as of 2026.
2. Register your business
Registration runs through the MOEA (Ministry of Economic Affairs): reserve your company name, open a preparatory bank account using your name reservation approval and investor ID, file your Articles of Incorporation, then register your UBN (Uniform Business Number, Taiwan's tax ID) with the National Taxation Bureau, which can include VAT registration in the same step. There's no statutory minimum capital, though NT$500,000 is the practical threshold if you want to sponsor a foreign manager's work permit, and NT$5 million in paid-in capital is generally needed to hire foreign employees more broadly. You'll need a Taiwan business address (a lease or rent agreement for non-residents) and proof of capital verification from a bank.
3. Check licenses and permits
Taiwan doesn't issue a single national business license. Depending on your industry, you may need import/export registration with the Bureau of Foreign Trade, factory registration, or product-specific approvals.
4. Understand Taiwanese taxes
Corporate tax is capped at a flat 20%. The detail worth planning around: retained earnings not distributed by year-end face an additional 5% undistributed profits surtax, a genuine incentive to either pay out dividends or reinvest actively rather than simply letting cash accumulate in the company, the opposite incentive structure from deferred-tax jurisdictions like Estonia. VAT (called Business Tax) is 5% standard, declared bi-monthly.
5. Stay compliant
Companies file bi-monthly VAT returns and annual corporate income tax returns, with financial statements prepared for shareholders ahead of the Annual General Meeting. Most foreign founders hire a local CPA or accounting firm, NT$3,000 to 10,000 a month for small companies, genuinely worthwhile given how many nuances sit inside Taiwan's tax and accounting rules. If you hire staff, register for labour insurance and national health insurance.
6. Sort out your own work authorization
Owning a Taiwanese LLC doesn't authorize you to live and work there personally; you'll need an Alien Resident Certificate (ARC), typically obtained through the business itself, or the Gold Card route described above if you'd rather not incorporate a company at all.
Taiwan business costs at a glance
| Item | Cost |
|---|---|
| LLC minimum capital | None statutory |
| Practical capital for foreign manager work permit | NT$500,000 |
| Capital needed to hire foreign employees | NT$5 million |
| Corporate tax, flat rate | 20% |
| Undistributed profits surtax | +5% |
| VAT (Business Tax), standard rate | 5% |
| Local CPA/accounting firm (monthly) | NT$3,000 to 10,000 |
Frequently asked questions
What is Taiwan's undistributed profits surtax?
An extra 5% tax on retained earnings not distributed by year-end, a genuine incentive to either pay out dividends or reinvest actively rather than let cash accumulate.
How much capital do I need to start an LLC in Taiwan?
No statutory minimum, though NT$500,000 is the practical threshold to sponsor a foreign manager's work permit.
What's the corporate tax rate in Taiwan?
A flat 20%, capped, plus the 5% undistributed profits surtax if earnings aren't paid out.
Does owning a Taiwanese LLC let me live and work there?
No. You'll need an Alien Resident Certificate obtained through the business, or Taiwan's Gold Card visa if you'd rather not incorporate a company at all.
What's the VAT rate in Taiwan?
5% standard (called Business Tax), declared bi-monthly.
Fees and rates above come from the Ministry of Economic Affairs (MOEA) and the National Taxation Bureau as of 2026, and they do change over time, so double check before you file. None of this is legal or tax advice. Talk to a Taiwan-qualified accountant or lawyer about your specific situation.