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Overseas Chinese & Foreign Investment

Investment Flow Chart(Establishment of New Enterprise)

Investment Flow Chart(Establishment of New Enterprise)

Investment Flow Chart(Establishment of New Enterprise): STEP 1.The investment inquires and provides the correlation service(Industrial Development & Investment Center ,MOEA). STEP 2.Apply for reservation of company name and business scope(Enterprise: Central Region Office, MOEA / Business firms: Local city or county government). STEP 3.Apply for Foreign Investment Approval(Please prepare the following documents to the MOEAIC: Investment Permission with Application Form A, Investor Certification, Power of Attorney etc.). STEP 4.Open a bank account in the name of the company’s preparatory office for the purpose of receiving the capital fund. STEP 5.Arrange to wire-transfer the capital fund in foreign currency to the subsidiary’s bank account and convert it to NT dollars. The company will be required to provide the bank statements of these transactions. STEP 6.Capital verification and Approval(Please prepare the following documents to the MOEAIC: Capital Approval with Advice of Inward Remittance, Foreign Exchange Memo, A Photocopy of the Company Deposit Passbook etc.). STEP 7.Company registration(1. Paid-in capital of at least NT500 million: The Department of Commerce, MOEA, 2. Paid-in capital of under NT500 million: Central Region Office,MOEA or Taipei City Government or Kaohsiung City Government or New Taipei City Government or Taichung City Government or Tainan City Government or Taoyuan City Government). STEP 8.Finish.
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  • Applications
  • Laws/Regulations
  • Explanations
  • FAQ
  • Other
Content   File
A. CHECK LIST OF DOCUMENTS REQUIRED FOR APPLICATION FOR INVESTMENT BY OVERSEAS CHINESE OR FOREIGN NATIONAL (FOR APPLICATION FORM A)
Form A.doc
FormA.odt
B. CHECK LIST OF DOCUMENTS REQUIRED FOR APPLICATION FOR INCREASE OR REDUCTION OF INVESTMENT IN THE INVESTED ENTERPRISE BY OVERSEAS CHINESE OR FOREIGN NATIONAL (FOR APPLICATION FORM B)
Form B.doc
FormB.odt
C. APPLICATION FOR VERIFICATION OF INVESTMENT AMOUNT BY OVERSEAS CHINESE OR FOREIGN NATIONALS
(This form is applicable to investment in cash for reference)
Form C.doc
FormC.odt
D. Instructions on Application for Transfer of Equity Interests by Overseas Chinese or Foreign Nationals, or Mainland Investor and Application Forms
Form D.doc
FormD.odt
E. APPLICATION FOR CHANGE OF NAME OR BUSINESS SCOPE OF DOMESTIC ENTERPRISE
(This form is applicable to the domestic enterprise invested by an overseas Chinese or foreign investor ("OCF Investor"), or an investor of mainland China ("Mainland Investor") that changes name or business scope.)
Form E.doc
FormE.odt
F. APPLICATION FOR WITHDRAWAL OF INVESTMENT
(This form is applicable to the dissolution of the invested enterprise.)
Form F.doc
FormF.odt
G. APPLICATION FOR (Applicable to Foreign Legal Person)
Form G.doc
FormG.odt
H. APPLICATION FOR REINVESTMENT BY THE DOMESTIC ENTERPRISE
(This form is applicable to the first layer domestic company invested by an overseas Chinese or foreign national with more than 1/3 shareholding in the company, which reinvests in another ultimate domestic target company for reference)
Form H.doc
FormH.odt
Content   File
Negative List for Investment by Overseas Chinese and Foreign Nationals
(Amended on June 17, 2013)
L2.pdf
Regulations for Verification of Investment by Overseas Chinese and Foreign Nationals
Regulations.docx
Regulations.odt
Statute For Investment By Overseas Chinese
Statute For Investment By Overseas Chinese.docx
Statute For Investment By Overseas Chinese.odt
Statute For Investment By Foreign Nationals
Statute For Investment By Foreign Nationals.docx
Statute For Investment By Foreign Nationals.odt
Content   File
I. Flowchart of Procedures for Investment in Newly Established Domestic Companies(2017.1.1)
Form I.doc
Form I.odt
III. Flowchart of Procedures for Review of Applications
Form III.pdf
The Interpretation of the Standard for Determining Whether a Third-Area Company Is an Investor of the Mainland Area
Form IV.doc
FormIV.odt
Required Documents and Guidance Notes for Investment Application by Overseas Chinese and Foreign Nationals
Form V.pdf
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How many types of branches can foreign companies set up in Taiwan? What differences exist between these?

Foreign companies can set up three types of branches in Taiwan: subsidiaries, branches, and representative’s offices.
1. Subsidiary:
A profit-seeking company organized and registered according to the law of the R.O.C. First, submit the name chosen for the company to the Department of Commerce, Ministry of Economic Affairs (MOEA) for approval and reservation, then apply to the Investment Commission, MOEA for an investment permit (to set up subsidiary company in export processing zone or science park, please apply directly to the Export Processing Zone Administration, MOEA or the Science Park Administration, National Science Council (NSC) for an investment permit), and then register the company at the corresponding government agency in charge of company registration.
2. Branch:
A profit-seeking company organized and registered according to the law of a foreign country shall first apply to the Department of Commerce, MOEA for recognition of the foreign company and registration of the establishment of a branch (to set up a branch in an export processing zone or science park, the applicant shall, with authority from the Department of Commerce, apply to the Export Processing Zone Administration, MOEA or the Science Park Administration, NSC for registration of establishment of a branch), and then apply to the Economic Development Bureau of the county/city government nearest to the branch for business registration.
3. Representative’s Office:
If a foreign company does not want to set up a subsidiary company or branch but just wants to designate a representative to perform the concerned legal actions within the territory of Taiwan, it shall apply to the Department of Commerce, MOEA for designation of a representative in accordance with the provisions of Paragraph 1, Article 386 of the Company Act; if the representative needs to be stationed in the R.O.C., he shall establish a representative office in accordance with the provisions of Paragraph 2 of the aforesaid article.

We are a foreign-funded company. A few days ago we invested in a company listed in the emerging stock market. In order to ensure capital flexibility, we want to apply to sell the shares we hold. Please advise us: 1. What is the flow of selling stocks in the securities market? 2. Is there any fixed format for an application form? 3. Can we transfer the stocks at any time once the application is approved, or have to transfer the stocks within a specified time limit? 4. Are there any other documents required for the application?

Where an overseas Chinese or foreign investor invests in a domestic listed, OTC or emerging stock company the following applies:
1. A non-insider overseas Chinese or foreign investor who holds the stocks of a listed, OTC or emerging stock company with the approval of the Commission shall file an application with the Commission in advance before transferring the stock rights. If the transferee is a certain person, the transfer may be conducted immediately after being approved by the Commission, and it is not necessary to make a report to the Commission for recording purposes; if it is planned to sell the stocks on the securities market, it may be sold on the market after being approved by the Commission; however, after the selling, a photocopy of the contract note produced by the securities company shall be submitted to the Commission to confirm the number of shares sold.
2. No fixed format is prescribed for an application form for stock transfer. The applicant may write the application form (other than Application Form A) on A4 paper by himself/herself. The subject should be ""Investor ○○○ applies for transfer/acceptance of the stocks of invested business ○○○"" and the foreign capital registered number of the invested business should be disclosed. The Remarks column shall be filled in with the number of shares held by the investor, number of shares to be transferred, and details of the transferee being a certain person (with transfer price listed) or that selling is being done on the securities market.
3. There is no explicit limit on the time of transferring. In principle, the applicant shall apply to the Commission for confirming the number of shares before the number of shares held by the investor had been changed (e.g., capital increase, and allotment by surplus etc).
4. Upon application, the authority of the investment attorney (authorization for stock transfer is required) and the number of shares held shall be examined, and photocopies of the official documents approving the company to be listed in the emerging stock market shall be submitted. Instructions on applying for transfer of the original investment by foreigners are available on the website of the Commission.

A foreign employee of our company wants to buy the treasury stocks of our company. How can he file the application?

1. According to the provisions of the current Statute For Investment By Foreign Nationals in force, a foreign investor who intends to invest in a domestic non-listed, non-OTC, and non-emerging stock company, no matter the size of investment, shall submit an application and enclose with necessary annexes to the Investment Commission in advance.
2. When applying to buy the treasury stocks of a domestic company (non-listed, non-OTC and non-emerging stock company), the foreign employee shall submit the following documents:
1. Application Form A.
2. Document providing evidence of the identity of the foreign employee: photocopy of a valid passport, or photocopy of a valid residence permit.
3. Original power of attorney (shall be submitted within one year of being authenticated).
(1) The power of attorney shall be authenticated by the local representative office of R.O.C. or the local government (including the court).
(2) The power of attorney shall include such items as the name of the investor, name of attorney, and definite scope of authorization (e.g., a. investment amount, b. capital increase or reduce, c. stock transfer, d. capital withdrawal, etc.; the preceding four items are just examples for reference, the investor shall decide the scope of authorization carefully according to the actual requirements and describe it clearly). The foreign employee also may send the power of attorney to a court in the R.O.C. for notarization when he stays in Taiwan. If the application is filed by the foreign employee himself/herself, the power of attorney may be waived, but the applicant shall carry the original copy of identify certificate (e.g., original copy of passport) to sign the application form personally in the office of the Investment Commission during the office hours.
4. The photocopy of company registration certificate or the latest registration form of the business invested in.
5. The photocopy of the minute of related meeting concerning treasury stocks of the business invested in.
6. A statement issued by the business invested in, including such items as the name of the business invested in, name and job title of the employee, number of shares to be bought, unit price and total price, and state that the transaction comply with the relevant provisions of the Company Act.

A foreign investor wants to invest in our company by his patent rights or special technical skills. What documents are required upon application in addition to the common documents providing evidence of identity and power of attorney?

When applying for investment by patent rights or special technical skills, the following documents are required as evidence:
1. Resolution of the shareholders' meeting; nonetheless, if the authority of shareholders' meeting is performed by the board of directors, the minute of the board of directors' meeting shall be submitted.
2. Evaluation contract signed by the two parties, including the contents such as the name of intellectual property rights, detailed description, executive plan of evaluation, ownership certificate, supply method and conditions.
3. Evaluation report produced by domestic institutions or experts that have the ability to assess the value of the intellectual property rights, including contents such as legal analysis, value analysis and overall evaluation. The evaluation report shall be signed by the evaluator; with remarks the educational background and experience of the evaluator.
If the stock rights acquired through investing by intellectual property rights come to not less than 1/3 of the total stock rights of the invested business, an operating plan audited by accountants shall be submitted in addition to the above documents, including the contents such as the background introduction of the project, future financial plans, product line and target market, financial feasibility analysis (including a primary financial report form, with a period of estimation of not less than five years), and subsequent influence on the future operation.

Our company is an unlisted company and a foreign investor holds some of our technology stocks. We are prepared to merge with a domestic listed company and our company will be the company ceasing to exist after the merger. What should the foreign investor do to dispose of its shares of the listed company acquired due to the merger?

1. If a foreign investor holding the stocks (including approved technology stocks) of a company with the approval of the Investment Commission acquires some shares of another domestic listed company due to the merger, an application shall be submitted to the Commission. This derivative financial investment method is prescribed in the forms of contribution under Subparagraph 4 ""Other property recognized by the competent authority"", Paragraph 1, Article 6 of the Statute For Investment By Foreign Nationals.
2. When filing an application with the Commission in accordance with the relevant provisions, the foreign investor shall fill in Application Form A (the invested business is a domestic listed company), and submit it together with the necessary documents listed in the instructions on the required documents for merger in the application form, such as introduction to the merger, resolution of the shareholders' meeting, merger contract, financial report and reasonability position paper (please refer to Paragraph 9 ""Mergers, Acquisitions and Division"" of the instructions on the required documents attached to Application Form A).

When a foreigner or overseas Chinese alien uses their employee stock option voucher in accordance with the relevant provisions of the Company Act or the Securities Exchange Act and files an application with the Commission for approval of investment and confirmation of size of investment in accordance with the provisions of the Statute For Investment By Foreign Nationals, what forms shall be filled in and what documents shall be enclosed?

When a foreigner or overseas Chinese alien uses their employee stock option voucher:
1. In case of the invested business is a listed, OTC or emerging stock company:
According to the provisions of the Regulations on Overseas Chinese and Foreigners' Investment in Securities, an overseas Chinese or foreign investor who is prepared to invest in a domestic listed, OTC or emerging stock company shall directly file an application with the Securities and Futures Bureau, Financial Supervisory Commission, Executive Yuan and Taiwan Securities Exchange Corporation
2. In case of the invested business is a non-listed, non-OTC and non-emerging stock company:
The investor shall fill in an application form and submit it together with the necessary documents to the Commission; the necessary documents include the following:
2.1. In case of investment in the business for the first-time, please fill in an application form A and enclose with following documents:
(1) Identity certificate, original power of attorney (notarized by a representative office of the R.O.C. or the local government) and photocopy of the attorney's ID card (for the relevant provisions please refer to the instructions on the required documents attached to the application form).
(2) Photocopy of the latest registration form of invested business
(3) Data relating to the execution of the employee stock option, including: the relevant minute of shareholders' meeting or board of directors' meeting, regulations on issuance of employee stock option vouchers, and certificate on the quantity of stock option vouchers produced by the invested business.
2.2 In case of capital increase, please fill in Application Form B and enclose with the above annexes. If the application is filed by the original attorney, the annex listed in Paragraph 2.1 may be exempt.

May the shares of an overseas company be returned to the original shareholders or transferred to natural persons upon liquidation of a domestic company?

According to the provisions of Article 10 of the current Regulations on Permission for Investment or Technical Cooperation in China in force: ""For the transfer of approved contributions or technical cooperation in China, a report shall be made to the Commission within two months of the transfer; If the transferee referred to in the preceding Paragraph is a citizen, juridical person, association or other organization in Taiwan, or a company in a third country/region referred to in Paragraph 2, Article 4 of the Regulations, the transferee shall apply to the Commission for permission before accepting the transfer."" Therefore, the liquidation of the domestic company shall be conducted in accordance with the provisions of the Company Act, but the receiver of stock rights of the business in China shall apply for permission in advance according to the provisions of the aforesaid Regulations.
To transfer the stock rights referred to in the preceding paragraph to a domestic natural person before liquidation, it is suggested that the transferrer and the transferee jointly prepare a letter and submit it together with the application form for simple examination for investment (capital increase) in China prepared by the transferee, the transfer agreement, (if the investment is made through a business invested in a third region, a shareholder list of the business invested in the third region and a financial report shall also be submitted), and basic data such as an approval certificate and financial report of the business in China invested in to the Investment Commission to apply for permission in advance.

A foreign stockholder of our company obtained approval for investment from the Investment Commission in 1991, and now he wishes to alter the seal. It is impossible to get a photocopy of the letter of approval of investment as many years have passed, but the government agency in charge of stock affairs insists on submission of this document. What should he do?

Since the letter of approval issued by the Commission in 1991 has been lost due to certain reasons, the stockholder may entrust his legal representative to apply for a transcription of the letter of approval.

What documents should be submitted in order to apply for foreign children inheriting the shares of domestic businesses owned by parents who have passed away?

The objects of applications filed by overseas Chinese and foreign investors for inheriting companies that will be accepted by the Commission are the shares of non-listed and non-OTC companies. If an overseas Chinese or foreign investor comes into investment by inherited heritage, he/she shall fill in Application Form A for Overseas Chinese and Foreigners' Investment and submit it together with a photocopy of passport, notarized power of attorney, photocopy of latest registration form of invested business, photocopy of succession certificate issued by the taxation agency, and original family tree chart and heritage distribution table. The aforesaid family tree chart and heritage distribution table shall be authenticated by the representative office of the R.O.C. or the local government (including the court).

I would like to get some idea of foreign cooperation and technical transfer in the TFT-LCD industry for the purposes of research. Does the Board publish any such data? How can I find out about this type of data?

What you want is information about how Taiwanese manufacturers in the TFT-LCD industry cooperate with foreign manufacturers. As the Technical Cooperation Act was repealed in 1995, the Commission has no such information.

I’m Vietnamese Chinese and I want to invest in a bookstore in Taiwan. Do I need to apply for a certificate of my Chinese identity? If so, how do I proceed?

1. According to the provisions of the current Statute for Investment by Overseas Chinese, an overseas Chinese investor who wants to invest in a new company (including a firm) in Taiwan or an existing company in Taiwan (non-listed, non-OTC, non-emerging stock company), despite the amount of investment, shall fill in ""Application Form A for Investment by Overseas Chinese and Foreigners"" in Chinese and submit it together with a certificate of Chinese identity (Chinese alien's Certificate issued by the Overseas Chinese Affairs Commission or the photocopy of the alien's passport) and any other necessary documents (see the instructions on the necessary documents as described in the Application Form) to the Investment Commission prior to investment, then, after obtaining the letter of approval, remit the investment fund and carry the letter of approval to handle the settlement and sale of foreign currency at the bank, and submit the application form for confirmation of amount of investment and the necessary annexes to the Commission for confirmation of amount of investment.
 In the abovementioned identity certificate, the photocopy of the alien's passport shall be authenticated by the local representative office of the R.O.C..
2. You did not describe the scope of business of the bookstore exactly. Please confirm the business items first in order to check if these items of the business invested by the investor relate to the Negative List for Overseas Chinese and Foreign Investment – Industries That Overseas Chinese and Foreigners are Prohibited or Restricted from Investing in. Where prohibited items are involved, the investor will be prohibited from making investments; where items are restricted, the Investment Commission will refer to the competent authority in charge of the target business to examine the case and offer suggestions in accordance with the relevant laws and regulations.

Our company is a subsidiary with 100% invested by an American company. Because the deficit of our company is much greater than its capital, the parent company is prepared to remit capital to make up the deficit without acquiring more shares or reducing or increasing the capital. What should we do to apply to the Investment Commission for approval? Moreover, is it feasible for the parent company to make up the deficit of our company by using the creditor's rights (accounts receivable) of our company? If the parent company reduces the capital by transforming the creditor's rights into stock capital to make up the deficit of our company, what should it do to apply to the Commission for approval?

1. If a foreign parent company is prepared to remit capital to make up the deficit of its subsidiary in Taiwan without increasing or reducing the capital, the remittance may be deemed as a loan, and (1) according to the provisions of the Statute for Investment by Foreign Nationals, to make investment by mid or long-term loan of one year or longer, Application Form B enclosed with the required documents shall be submitted to the Commission in advance and then after the application is approved, the money should be remitted and the Commission should be asked to confirm the fund, and declare the foreign debt to the Central Bank; (2) in the event of a short-term loan, the remittance may be handled directly in accordance with the provisions of the Regulations on Declaration of Incomes, Expenditures or Transactions of Foreign Exchange.
2. To make up the deficit of the subsidiary by creditor's rights, if the parent company abandons the creditor's rights, the relevant provisions of the Company Act shall be applied.
3. As to the financial contribution by transforming creditor's rights into stock capital, the Commission will recognize the following forms of contribution: (1) the abovementioned mid or long-term loan of one year or longer, which has been confirmed for not less than one year; and (2) creditor's rights against company reorganization. As to using the accounts receivable as stock capital for a capital increase and then conduct capital reduction, the Commission has not accepted such an application yet.

When a foreign employer engaged in commercial service in Taiwan pays dividends to employees in cash or shares according to the laws and regulations prescribed by the government and the company policy, is there any legal limit or basis to the dividends?

1. When a foreigner who works in a non-listed and non-OTC company in Taiwan receives dividends from the company in the form of stocks, the foreign employee shall submit an application form enclosing the following documents to the Commission in accordance with the provisions of the Statute for Investment by Foreign Nationals before accepting the stocks:
(1) Basic data: documents providing evidence of the investor's identity (for example, photocopy of passport) and notarized power of attorney.
(2) Photocopy of latest registration form of the business invested in.
(3) Minute of shareholders’ meeting on the increasing capital to the invested business.
(4) Statement issued by the business invested in (including such items as: name of the invested business, name and job title of the employee, and number of shares distributed to the employee as dividends).
2. For the provisions and limits on the dividends paid by an employer to the employees, please contact the Department of Commerce, MOEA (Website: http://www.moea.gov.tw, Tel: 02-23212200).

A foreign investor is prepared to invest in our company. A few days ago the investor mailed the power of attorney to the local representative office of the R.O.C. for authentication but was rejected. Where can the investor have the power of attorney authenticated?

1. The power of attorney of a foreign investor may be authenticated at any local representative office of the R.O.C. or the local government (including the court). The procedure of authentication is determined by the authentication agency. Please consult the authentication agency in advance. What you are asking about is the authentication for the power of attorney that was produced by a natural person. Generally speaking, the authenticating agency will not authenticate the document until it is confirmed that the power of attorney is produced by the authorizer himself/herself by his/her own will. The document may have been rejected because it should not be by mail. Please contact the authenticating agency.
2. In addition to this, a foreign investor (natural person) may have the power of attorney authenticated by the Department of Notarization of any local court of the R.O.C. when he/she stays in Taiwan. For the procedures for notarization, please contact the Department of Notarization in advance.

Our company is new and a Japanese company in Taiwan is going to invest in it, therefore we urgently require the following information. Thank you. 1. What is the procedure of application for a Japanese company investing in Taiwan? 2. What documents are required for a Japanese company investing in Taiwan? 3. Is there any limitation on the proportion of capital for a Japanese company investing in Taiwan? 4. What forms of investment are applicable for a Japanese company investing in Taiwan? 5. Could the investor from the Japanese company be the chairman or vice-chairman of the board of the business the company is investing in? 6. What procedure should the investor from the Japanese company follow in order to employ Taiwanese? What are the necessary requirements? 7. What preferential treatment in taxation is provided by the Taiwanese government for Japanese companies investing in Taiwan?

1. Foreigners and overseas Chinese may apply to make investments in Taiwan and to establish new enterprises there either in the name of a natural person or of a foreign company. For directions of how to apply, in a visual form, please refer to the Flow Chart for Foreigners to Invest in New Companies on the website of the Commission.
2. According to the provisions of the current Statute for Investment by Foreign Nationals in force, to invest in a non-listed, non-OTC or non-emerging stock company in Taiwan, the foreign applicant shall, no matter the size of the investment, shall submit an application form enclosing with the required documents (Application Form A for Overseas Chinese and Foreign Investment, including a standard form and instructions on the required documents to be submitted, is available on the website of the Commission) to the Commission in advance.
3. The required documents for establishing a new company are as follows: (refer to the instructions on the required documents on Page 1 of Application Form A):
(1) Application Form A.
(2) Certificate documents of the juridical person: juridical person certificate, registration certificate or other related documents that were issued by the local government; a list of shareholders of the juridical person shall be submitted where necessary. The certificate documents of the juridical person shall be authenticated by the representative office of R.O.C., the local government or the court.
(3) The original copy of power of attorney (shall be submitted within one year after it had been authenticated).
(a) The power of attorney shall be authenticated by the local representative office of R.O.C., the representative office of the foreign country in Taiwan; in absence of the aforesaid local representative office of R.O.C., it shall be authenticated by an organization which is authorized by our government, the local government or the court.
(b) The power of attorney shall include the name of the investor, name of attorney, and definite scope of authorization (e.g., a. the. Investment amount, b. capital increase or reduce, c. stock transfer, d. capital withdrawal, etc.; the preceding four items are just examples for reference, and the investor shall decide the scope of authorization carefully according to the actual requirements and describe it clearly); if the power of attorney is produced by a juridical person, the signature column shall include the company name, the job title and name of the person signing. If the investor is a juridical person, it shall employ an attorney to handle the procedure of application.
(4) The original copy of Application Form for Confirmation of Company Name: please apply to the Department of Commerce, MOEA for issuance.
4. According to Article 6 of the Statute for Investment by Foreign Nationals, there is 4 types of investment can be made as follow:
(1) Cash;
(2) Machinery, equipment or raw material for own use;
(3) Patent rights, trademark rights, copyrights, special technical skills or other intellectual property rights; and
(4) Other property recognized by the competent authority.
5. Incentives measures for foreign investment in Taiwan is as follows:
I. Preferential taxation
In Taiwan, the Act for Upgrading Industries was put into force in 1991 and amended on January 1, 2000 to prolong preferential treatment in taxation for 10 years until December 31, 2009. The main items of the preferential treatment in taxation are listed in the table below:

Items

Contents

Accelerated depreciation of equipment and facilities

Equipment and facilities used exclusively for R&D, experimentation, and quality control purposes, and equipment, machinery, and facilities that are utilized for energy conservation or that use new and clean energy, are eligible for an accelerated depreciation period of two years. If there is any residual postdepreciation service life remaining following the accelerated depreciation period, depreciation may be continued for one or several years within the service life of the assets as specified in the Income Tax Law until the assets are fully depreciated.

Investment in automation equipment or technology

Companies may deduct 5% to 20% of the amount of investment in the areas listed at
left from their profit-seeking-enterprise income tax over a five-year period
beginning with the year in which the investment is incurred.

Investment in resource recycling and pollution control equipment or technology

Investment in equipment or technology for the use of new and clean energy, energy conservation and industrial waste water recycling

Investment in equipment or technology for reducing greenhouse gas emissions or enhancing energy efficiency

Investment in the hardware, software and/or technology that can
promote an enterprise's digital information efficiency, such as the
Internet and television functions, enterprise resource planning,
communication and
telecommunication products, electronics and/or audio visual
equipment, and digital content production

Research and development

Companies may deduct 35% of the amount of their investment in R&D or personnel training from their profit-seeking-enterprise income tax over a five-year period beginning with the year in which the investment is incurred.
Companies may deduct 50% of the amount of their investment in R&D or personnel training that exceeds the average annual amount of their investment in R&D or personnel training for the previous two years from their profit-seeking-enterprise income tax.
The total amount deducted from tax due per year under the previous two items may not
exceed 50% of the company's profit-seeking-enterprise income tax due for that year. The amount deducted during the final year, however, is not subject to this limitation.

Personnel training

Investment in resource-poor or lesser -develop ed rural areas

Companies that invest a specific amount or employ a specific additional number of persons in resource-poor or lesser-developed rural areas may deduct 20% of the invested amount from their profit-seeking-enterprise income tax over a five-year period beginning with the current year.

Investment in emer ging, important, and strategic industries

The investor may choose one of the following:
Investment tax credits for shareholders:
A company or individual who subscribes to the registered stock issued by a company in an emerging, important, or strategic industry, and who holds the stock for at least three years, may claim a deduction from the profit-seeking-enterprise income tax or consolidated income tax due over a period of five years beginning with the current year:
1. A profit-seeking enterprise may deduct up to 20% of the cost of such stock from its profit-seeking-enterprise income tax for the current year.
2. An individual may deduct up to 10% of the cost of such stock from the consolidated income tax for the current year, provided that the deductible amount within each year is not
more than 50% of the consolidated income tax payable for that year; this limitation will
not apply, however, to the amount deducted in the final year.
3. The rate of tax reduction provided above will be reduced by 1 percentage point every two years beginning on Jan. 1, 2000.
• Five-year tax holiday for companies:
A company investing in an important, emerging, or strategic industry may, within two years from the date at which shareholders begin paying their stock price and with the approval of its shareholders' meeting, select exemption from the profit-seeking-enterprise income tax and waive the right of shareholders to claim income tax deductions as set forth above. Once the selection is made, no change will be allowed. The following provisions must be met:
1. A newly incorporated company that meets these conditions will be exempted from the
profit-seeking-enterprise income tax for a period of five consecutive years from the date
on which it begins to sell its products or render its services.
2. A company that carries out an expansion project via a capital increase will be exempted from the profit-seeking-enterprise income tax on the increased income derived from the expansion for a period of five consecutive years from the date the newly added equipment begins to operate or the rendering of services begins. However, this provision is limited to the expanded construction of independent production or service units, or the expansion of primary production or service equipment, via capital increase.
3. A company that is eligible for a tax exemption as described above may, within two years of the date on which it starts to sell its products or render its services, choose to defer the commencement of the tax-exemption period. The period of deferment may not be more than four years, and the date on which the exemption period begins following deferment must be the first day of a fiscal year.
4. A company that carries out a capital increase using undistributed profits may apply the three items above.

Reinvestment

If for the purpose of adjusting its business operations, a company invests production or service equipment and the land on which such equipment is located in a another enterprise in which it holds at least a 40% share, the land value increment tax on the reinvested land may, with prior government approval, be deferred based on the ratio of shares held and upon receipt of a proper guarantee from the company.

Investment by foreigners and o verseas Chinese

When a non-resident individual or profit-seeking enterprise without a fixed place of business in the Republic of China receives a dividend distributed by a company or profit distributed by a partnership located in the Republic of China in which that individual or enterprise has invested under the Statute for Investment by Overseas Chinese or Statute for Investment by
Foreign Nationals, 20% of the amount of payment will be withheld as stipulated in the Income Tax Law and the provisions of the Income Tax Law regarding tax filing will not apply.
When a non-resident director, supervisor, or manager of a company in the ROC who has invested in that companies under the Statute for Investment by Overseas Chinese or Statute for Investment by Foreign Nationals and who has resided in the ROC for more than 183 days within a tax year for the purpose of operating or managing the invested company receives a dividend from the invested company, 20% of the amount received will be withheld as stipulated in the Income Tax Law and the dividend income will not be included in the individual's tax return for that year.
Salaries paid abroad to directors, managers, or technicians who are sent to the ROC temporarily by foreign profit-seeking enterprises that invest in the ROC under the Statute for Investment by Overseas Chinese or the Statute for Investment by Foreign Nationals to carry out investment, plant construction, or market surveys, and who do not stay in the ROC more than 183 days within a tax year, are not treated as income derived in the ROC and are thus exempt from the income tax.

Establishment of international logistics and distribution center s

When foreign profit-seeking enterprises or branch companies which they have established within the Republic of China set up themselves, or commission domestic profit-seeking enterprises to set up logistics and distribution centers in Taiwan to engage in the warehousing and simple processing of goods from the said foreign profit-seeking enterprise which are then delivered to domestic customers, the income so derived is exempt from the profit-seeking enterprise income tax.

Company Merge rs

Merged companies are exempt from profit-seeking-enterprise stamp taxes, income taxes, and securities transaction taxes resulting from their merger, and may apply the provisions for the deduction of losses. In addition, the land increment tax due on land that is owned by a company and is transferred along with the merger of that company may be charged to the account of the surviving enterprise.

Establishment of operat ions headquarters

For companies that establish operations headquarters in Taiwan that reach a certain scale and that have a major economic effect, the income that they derive from the provision of management services or research and development to the related companies which they acquire in Taiwan, as well as royalty income, profit from investment, and gain from the disposition of properties, are exempt from the profit-seeking-enterprise income tax; in addition, such companies may procure publicly owned land at preferential prices.

Science-based industry

Effective Jan. 1, 2002, machinery and equipment that is imported for a company's own use and that is not yet manufactured domestically may, with the approval of the Ministry of Economic Affairs, be exempted from import tariffs and business taxes.
Import tariffs and business taxes will be levied on imported machinery or equipment that, within five years of its importation, is sold or its use is changed so that it no longer meets the conditions for tax exemption or conforms to its original use. Machinery or equipment that is sold to companies that operate within science parks, export processing zones, or other science-based industrial companies is not subject to this limitation.
Raw materials that are imported by bonded factories are exempt from import tariffs and business taxes. Import tariffs and business taxes will be levied on such raw materials, however, if they are shipped outside the bonded area.



II. R&D Subsidies
(I)Measures for encouraging the development of leading new products
(1) Contents:
In order to encourage new product development by private manufacturers with R&D potential, and to share some of the burden of risk, the government may provide a subsidy of up to 40% of the cost of development.
(2) Qualifications for application:
a. Corporations, including those in the manufacturing and technical service industries, must be established in accordance with the Company Law.
b. Corporations must be financially sound and meet the following criteria:
(a)The enterprise, its responsible party, and the spouse of the responsible party must have no official record of non-payment of a check in the year prior to application.
(b)The enterprise, its responsible party, and the spouse of the responsible party must have no overdue or defaulted bank loans and no record of financial negligence with regard to an agreement with the Industrial Development Bureau, MOEA.
(c)The enterprise must have a net worth of at least one-half the amount of paid-in capital.
c. Applicant companies must have an R&D department with sufficient R&D specialists within the territory of the Republic of China on Taiwan.
d. The applicant must have an R&D performance record adequate to prove its ability to execute the development project and commercialize the resulting product.
(3) Scope of Eligible Products
a. Products of emerging important strategic industries.
b. Products employing key technologies that surpass current standards of industrial technology in Taiwan.
c. Products that have a strong linking effect and good market potential, and that can stimulate the development of related industries.
(4) Intellectual property rights revert to the developing company.
(II)Corporate Participation in the Development of Technology, and Domestic and Overseas R&D Centers
The “Corporate Participation in the Development of Technology Program of the Ministry of Economic Affairs” encourages companies to carry out R&D in industrial technology by providing subsidies for R&D spending.
III. Low-interest Loans
To accelerate industrial development and economic growth, a special fund has been set aside by the Development Fund of the Executive Yuan for cooperation with banks in providing various kinds of special low-interest loans. These include preferential loans for small and medium-sized enterprises (SMEs) to upgrade and purchase automation equipment, and loans to private enterprises for purchasing pollution control and pollution treatment equipment. In addition, the government has allocated NT$100 billion from new postal deposit funds for the ""Medium-and Long-term Capital Loan Plan."" Private investors whose projects have a value of NT$ 100 billion or more may apply for loans under this plan.
IV. Governmental Participation in Investment
Investors can ask the government to participate in their investment projects to a maximum of 49% of the total capitalization. The following government agencies represent the government in providing capital:
(1) The Sci-Tech Development Fund and other development funds
(2) Chiao Tung Bank
(3) Management Committee of the Executive Yuan Development Fund
6. The information of the above section (Section 5) mainly comes from the Industrial Development Bureau and the Department of Technology, MOEA. For further information and the latest data, please directly contact the Industrial Development Bureau and the Department of Technology, MOEA.
7. The incentives measures in the Statute for Investment by Foreign Nationals is mainly prescribed in the Act for Upgrading Industries. Other preferential treatment (if any) may apply at the same time.
8. An investor of foreign capital or the legal representative designated by him/her may assume the chairmanship or vice-chairmanship of the board of the business invested.
9. Foreign-funded businesses shall employ local employees in accordance with the related laws and regulations on labor affairs prescribed by the Council of Labor Affairs. Please directly contact the Council or visit its website for further information.
10. Information on foreign investment in Taiwan is available on the website of the Investment Commission. To know about the investment environment of Taiwan, please visit the website of the Industrial Development & Investment Center (http://www.idic.gov.tw).

To dissolve a foreigner-invested business, what should the investor do to handle the procedures for capital withdrawal?

With the consent of the shareholders' meeting of the invested business, the investor may authorize an attorney to file an application with the Commission to withdraw the investment, and handle the procedures for dissolution at the registration agency after the application is approved.

A foreign investor wants to invest in a domestic business by machinery and equipment. What should he/she attend to upon application?

In addition to the basic data, the investor shall also submit a list of machinery and equipment or raw materials for own use, including contents such as name of machinery/equipment/material, unit, quantity, unit price, total price etc. In principle, the aforesaid machinery and equipment are limited to new products for own use. In case of special requirements, application may be filed for used machinery and equipment project by project, but an evaluation report should be submitted in addition to this.

A foreigner wants to transfer the stocks he holds. What should he do?

When an overseas Chinese or foreign investor wants to transfer the stocks of an invested business he holds with the approval of the Investment Commission to another overseas Chinese or foreign investor he should bear in mind the following:
1. No fixed format is prescribed for the application form for stock transfers (can refer to the Application Form for Transfer of Stocks or Contribution of Overseas Chinese or Foreigners, which is available on the website of the Investment Commission). The applicant may write the application form (other than Application Form A) on an A4 paper by himself/herself. The subject should be ""Investor ○○○ applies for transfer/acceptance of the stocks of invested business ○○○"", and the foreign capital registered number of the invested business should be disclosed. The Remarks column shall be filled in with the number of shares held by the investor, number of shares to be transferred, transferee and transfer price, and both the transferor and the transferee shall seal the application form (the application form may be sealed by an authorized attorney, but the transferor must authorize the attorney to handle the stock transfer).
2. When an overseas Chinese or foreign investor transfers his/her shares of an invested business originally approved by the Commission, he/she shall file an application with the Commission in advance, and after the application is approved, may pay the transfer price abroad without being required to remit it into Taiwan for auditing. After the procedure of transfer is finished, the transfer registration may be conducted.
3. If the transferee is a new overseas Chinese or foreign stockholder, the identity certificate (juridical person certificate or photocopy of passport or alien's certificate), power of attorney, and attorney's ID photocopy shall be submitted. The juridical person certificate and power of attorney shall be notarized by the representative office of the R.O.C. in the foreign country or by the local government, and a Chinese translation shall be submitted together with it. To obtain an alien's certificate, please apply to the Overseas Chinese Affairs Commission. If the investor is a naturalized citizen, he/she also may carry the original passport to the Commission personally to handle the procedure during office hours.
4. Information about application for transfer of contribution by foreigners and an application form for reference are available on the website of the Commission.

We are an American company and we are interested in a Taiwanese listed company. What should we do if we want to invest in this company?

You should file an application with the Securities and Futures Bureau, Taiwan Financial Supervisory Commission, Executive Yuan in accordance with the provisions of the Regulations Governing Overseas Chinese and Foreigners' Investment in Securities. However, you may apply to the Investment Commission, MOEA under the following circumstances:
1. To apply for subscription of common stock for cash of the target business or to accept a transfer of stocks from a Taiwanese stockholder, if the size of the investment is not less than US$50 million and the investor will participate in the long-term operation of the business, an operating plan, minute of shareholder’s meeting, and in addition, other relevant documents shall be submitted to the Commission for approval.
2. If the investor acquires stocks of the target business through the securities market with the approval of the Securities and Futures Bureau and is elected director or supervisor to participate in the long-term investment and operation of the business, it shall submit a photocopy of the letter of approval produced by the Securities and Futures Bureau, proceedings of the stockholder congress, and in addition, other relevant documents to the Commission to apply for examination and recording thereof.

We are a foreign-funded company, and we have decided to invest in another company in Taiwan. Should we apply to the Investment Commission?

1. If the foreign investor holds more than 1/3 of the stock rights of the foreign-funded company, it shall apply to the Investment Commission in advance by submitting an application form enclosed with a detailed reinvestment plan (including the amount of reinvestment, stock rights, proportion of stock, investment benefits etc.) before investing in a non-listed, non-OTC and non-emerging stock company in Taiwan.
After the reinvestment is approved, an application shall also be submitted to the Investment Commission to apply for reduction of reinvestment before selling the stocks.
2. In addition, if the quantity of stocks held by the foreign-funded company changes due to capital reduction or allotment by surplus, an application form (including such items as variation of stock rights and proportion of stockholding etc.) and a photocopy of the minute of shareholders’ meeting shall be submitted to the Commission for approval.

A foreigner is prepared to invest in a domestic business and acquire the bearer stocks of domestic stockholders. Should he file an application with the Investment Commission? If so, what matters should he attend to? Thanks.

1. According to the provisions of the current Statute For Investment By Foreign Nationals in force, a foreign investor who intends to acquire the shares of a domestic company (non-listed, non-OTC, and non-emerging stock company) must, no matter the size of the investment, submit an application to the Commission in advance.
2. Although bearer stocks have no registered holder, they do have legal holders. A domestic stockholder who is transferring the shares shall state the name of the legal holder.
3. To accept bearer stocks transferred by a domestic stockholder, the foreign investor shall submit a photocopy of a securities transaction tax receipt for examinatio

A foreigner intends to invest in a new company in Taiwan. What is the minimum capital required?

The minimum capital is NT$500,000 for a limited company and NT$1,000,000 for a company limited by shares, unless other standards are prescribed by the competent authority in charge of the target business for a specific industry or an additional branch. For enterprises established according to the Business Registration Act, there is no minimum capital required.

An Italian investor wants to make an investment for the purpose of establishing a new company in Taiwan. Where should he get the identity certificate and the authentication of power of attorney? The investor will come to Taiwan in the near future. Can he have the power of attorney authenticated in Taiwan? Is there any fixed format for the power of attorney?

1. The identity certificate of a natural person refers to the nationality certificate. The aforementioned nationality certificate may be replaced by the photocopy of passport in the validity period, and the photocopy of passport may be exempt from authentication. Documents providing evidence on the qualifications of juridical persons refer to the juridical person certificate and registration certificate issued by the local government. The identity certificate and the power of attorney of a foreign investor shall be authenticated by the representative office of the R.O.C. in the foreign country or by the local government (including the court). If the investor is a natural person, he may submit the power of attorney to the Department of Notarization of any local court of the R.O.C. for notarization when he stays in Taiwan.
2. There is no fixed format of the power of attorney for foreign investors, and the Investment Commission just prescribes various principles. Please refer to the instructions on the necessary documents attached to Application Form A for Foreign Investment ---- the power of attorney shall include the name of the investor, name of attorney, and the definite scope of authorization (e.g., a. investment amount, b. capital increase or reduce, c. stock transfer, d. capital withdrawal, etc.; the preceding four items are just examples for reference, the investor shall decide the scope of authorization carefully according to the actual requirements and describe it clearly); if the power of attorney is produced by a juridical person, the signature column shall include the company name, job title and name of the person signing.

My foreign investor has applied to you for approval of investment, and now he is prepared to remit the funds from abroad into Taiwan. To what matters should he attend when remitting? The investor has an account in the OBU branch of a Taiwanese bank. Can he directly deposit in the OBU for the purpose of selling? If appreciation of foreign currency results in insufficiency of remitted funds and the shortage is about NT$500~600, what should he do?

1. Generally speaking, a remittance notice, an original copy and two photocopies of a foreign exchange memo as well as photocopies of related annexes (e.g., a photocopy of a bankbook or account statement or photocopy of a securities exchange duty memo) shall be submitted when remitting a foreign currency. When exchanging new Taiwan dollars, the investor shall carry his/her letter of approval of investment to the bank. He/she should write ""310"" overseas Chinese/Foreign Investment Capital in the ""Nature of Remittance"" column.
2. To sell deposits of a foreign currency in a bank in Taiwan or OBU, the investor shall submit the vouchers of remittance, such as an incoming remittance notice, transaction voucher and in addition, other original documents.
3. In case of insufficiency when selling the remitted foreign currency for new Taiwan dollars, the investor shall amend the investment plan to reduce the amount of investment or make up the shortage by remitting again.
Content   File
FORM 4A.LETTER OF REPRESENTATION FOR CROSS-BORDER MERGER AND ACQUISITION
Form_A4.docx
Form_A4.odt
Declaration for Qualification of Foreign Investor Who Is a Listed Company or Who Has a Controlling Listed Shareholder
Form A2I.docx
FormA2I.odt
A2. Declaration for Qualification of Foreign Investor (for foreign legal person)
Form A2.doc
FormA2.odt
A1. Act Governing Relations Between Peoples Of The Taiwan Area And The Mainland Area (Last Amended on September 1, 2010)
A1.doc
A1.odt

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