What is the most suitable legal structure for starting a business in Taiwan? This is a subjective question, and will depend upon a lot of factors. These include: Work permit & residency requirements, start-up capital, taxation, and whether or not you have a company already registered in another overseas jurisdiction (If you already have a company registered in your home country or Hong Kong for instance, you can register a Branch Office or a Representative Office in Taiwan).
You will also have to consider your business plan and business type in considering the most suitable legal structure for starting a business in Taiwan.
The most common legal structures for foreigners starting a business in Taiwan are: Limited Liability Company (a type of Taiwanese company), Branch Office, and Representative Office. This is primarily because with these types of business structures, you are able to – upon satisfying the capital requirements – hire yourself as the manager and obtain a work permit. Once you have a work permit, you can get your residency visa and ARC. And most importantly, legally reside and manage your company in Taiwan! Of course, if you already have an open ARC or an APRC, you don’t need to obtain a work permit through your company. Hence, this issue won’t be a concern.
Another issue is taxation. If you intend to move your company’s profits overseas, registering a Branch Office in Taiwan is an attractive option as you will be exempt from the 20% withholding tax on the repatriation of after-tax profits.
And finally, there is the issue of capital requirements. The primary reason why registering a Representative Office in Taiwan is so attractive to foreign entrepreneurs is that the capital requirements to hire yourself as manager and obtain a work permit are far lower than for registering a Limited Liability Company or a Branch Office in Taiwan. Of course, you should be aware that as the representative of a Representative Office in Taiwan, the scope of business-related activities you are legally able to undertake in Taiwan is limited.