A list of useful business-related key terms that appear throughout the Book, How to Start a Business in Taiwan.
ARC (Alien Residence Certificate), 居留證, Jū liú zhèng
Issued by the National Immigration Agency (NIA), the ARC is essentially your Taiwanese identity card. Keep it in your wallet. You will need it for all kinds of transactions: Opening a bank account, taking out a mobile phone plan, or purchasing a car, to name a few. The type of ARC you have will depend upon your work permit. If your work permit is linked with your company or employee, the ARC will specify the name of your company or employee. If you’ve obtained your residency in Taiwan through your Taiwanese spouse, the ARC will also specify this on the front of the card.
Branch Office, 外商分公司, Wàishāng fēn gōngsī
A type of business entity you can operate in Taiwan, for which the manager can obtain a work permit and residency as the manager of the branch office. Requires the existence of a company in another country. Exempt from the 20% repatriation of foreign income tax.
Company Limited by Shares, 股份有限公司, Gǔfèn yǒuxiàn gōngsī
A type of business entity you can set-up in Taiwan, for which the manager can obtain a work permit and residency as the manager of the company. Incorporated in Taiwan, formed under Taiwanese company laws. In comparison to a so-called ‘Limited Company’, this type of entity is suitable for larger companies or companies seeking to go public.
Company Tax Number, 統一編號, Tǒngyī biānhào
A company tax filing number. Required for tax purposes, opening a company bank account, and so forth. Please note that individuals also have a tongyibianhao, which is the same as your ARC number. In some rare circumstances, individuals in Taiwan without an ARC may be issued a separate tongyibianhao (for example, if you’re a scholarship holder at a Taiwanese university). Representative offices do not use tongyibianhao, and instead use koujiaohaoma, tax withholding number.
Invoice/receipt, 發票, Fāpiào (see also Receipt, 收据Shōujù)
Fapiao is a kind of invoice-receipt, particular to Taiwan. Although there are exceptions, whenever you bill a customer for a product or service, you will need to provide your customer with a fapiao. The amount of VAT you pay is depends upon the amount quoted in the fapiaos you have issued.
Fùzé rén, 負責人, Responsible Person: Under Taiwanese company law, the fuzeren is the person legally responsible for the company. S/he will represent the company to the government and assume certain liabilities. Despite rumors to the contrary, a fuzeren CAN be a foreign national.
Labor Insurance, 勞工保險, Láogōng bǎoxiǎn
If you are working in Taiwan, you will be covered under the Labor Insurance scheme, referred to simply as 勞保 laobao. Companies and employees each contribute a certain amount each month to the scheme. The scheme includes ordinary insurance and occupational accident insurance.
Limited Company, 有限公司, Yǒuxiàn gōngsī
A type of business entity you can set-up in Taiwan, for which the manager can obtain a work permit and residency as the manager of the company. Incorporated in Taiwan, formed under Taiwanese company laws. In comparison to a so-called ‘Company Limited by Shares’, this type of entity is suitable for smaller companies not seeking to go public. Despite rumors to the contrary, a foreign national CAN be the sole shareholder.
National Health Insurance, 全民健康保險, Quánmín jiànkāng bǎoxiǎn: If you are working in Taiwan, you will be covered under the National Health Insurance scheme, referred to simply as 健保 jianbao. Companies and employees each contribute a certain amount each month to the scheme. The scheme is quite comprehensive, and covers hospitalization and outpatient care, as well as dentists and traditional Chinese medical care.
Partnership, 合夥組織Héhuǒ zǔzhī
Suitable for small business, a partnership is a simple business set-up, similar to a sole proprietorship, but with two or more owners of the business. You don’t need to register a company. You and your partner(s) will, however, be liable for all the debts of your business.
Receipt, 收据Shōujù (see also Invoice/receipt, 發票, Fāpiào)
A normal receipt. You may receive one after purchasing something for which VAT is not payable.
Representative Office, 外商辦事處, Wàishāng bànshì chù
A type of business entity you can operate in Taiwan, for which the representative can obtain a work permit and residency as the ‘representative’ of the representative office. Requires the existence of a company in another country. The representative of a representative office is somewhat limited in the types of activities they can undertake in Taiwan. They are forbidden from undertaking local sales, for instance. A representative office is merely meant as a legal presence in Taiwan; to find suppliers, negotiate contracts, and so forth. One advantage of a rep office is that it is cheaper to set-up, and easier to maintain your work permit and residency.
Sole Proprietorship, 獨資Dúzī
Suitable for small business or self-employment, a sole-proprietorship is the simplest and cheapest type of business set-up. You don’t need to register a company. You will, however, be liable for all the debts of your business.
Stamp / Seal, 印章, Yìnzhāng
A proof, as an alternative or in addition to a signature. As an individual, you will almost certainly need a yinzhang in Taiwan: At least to open a bank account, get married, and sign personal contracts. Made out of wood or stone, you can get a company seal made at your local key cutter or convenience store. A company will need the following types of stamps / seals:
Company Seal大章Dà zhāng, carved with the full company name.
Personal Seal小章Xiǎo zhāng, carved with the name of the fuzeren.
Invoice stamp統一發票章Tǒngyī fà piào zhāng, you’ll need this stamp for Fapiao. This stamp displays your company’s full name, telephone number, address, the fuzeren’s name, and your tax filing number. The invoice stamp has a standard format of 4 cm length and 3.5 cm width.
Tax Withholding Number, 扣繳號碼, Kòu jiǎo hàomǎ
The alternative to a tongyibianhao, a tax filing number for representative offices in Taiwan, as a representative office can’t undertake sales in Taiwan.
VAT (value added tax), 營業稅, Yíngyèshuì
VAT – similar to the GST (Goods and Services Tax) for Australians and New Zealanders, is a 5% tax on most transactions for products or services in Taiwan. As a business owner, you may be able to get a refund on the VAT you have paid based on the VAT paid when you buy things.
Work permit, 工作許可證, Gōngzuò xǔkě zhèng
Issued by the Council of Labor Affairs (CLA), a work permit is required by foreign nationals residing in Taiwan who do not have an open ARC or an APRC (eg. If married to a Taiwanese national). There are two types of work permits most relevant to those working on a business in Taiwan: Type A, for professional or technical employees of a company; or, Type B, for managers of a Taiwanese company or a representative office, or, representative of a representative office. The work permit will dictate the type of work you can undertake in Taiwan; for example, a Type A work permit is usually tied to a company, your employee. A Type B work permit is also tied to a company, ie. The company you are managing, and the type of work you can undertake will depend upon whether you are a manager or a representative.