Taiwan Representative Office Setup FAQ tpe4ww.rep

In Taiwan, the procedures and required documents for setting up your Representative Office become quicker, simpler and easier from 2019.We provide services on after-REP-setup payroll tax compliance , Expense Compliance check and arrangement of uploading online payment files to your internet-banking for your approval.

Send an email to tpe4ww.rep@evershinecpa.com

Call  us in working hours (Taipei  and China  Time)
Manager Jerry Chu, USA Graduate School Alumni and a well-English speaker
Mobile: +886-939-357-735
Tel No.: +886-2-2717-0515 ext. 103

Which one we should set up in Taiwan?  Subsidiary ? Branch? or Representative office ?
( please link above to get more detailing information)

Taiwan Representative Office Setup tpe4ww.rep

Regarding with Taiwan Representative Office Setup and after-setup services, please refer recent below dialogues between Evershine and Client.
Believe you will have complete and comprehensive understanding

Scenario

1. Figures

Joshua, a USA-based client’s HR Department Head
Caleb, a USA-based client’s CFO
Dale Chen, Evershine Principal Partner of Taiwan
Kerry Chen, Evershine Manager on Payroll Service
Jerry Chu, of Evershine Manager on Company Registration and Law services

2. Date and meeting method:

2020/2/06, during the period of outbreak of New Corona-virus.
Using internet conference meeting facility: GoToMeeting

Question 1 by Joshua:

We have interviewed 2 Taiwanese as our sales representative who will promote our products to Taiwan buyers.
If having any transaction, it will be between USA parent company and Taiwan buyers directly.
We actually need not to issue revenue invoices in Taiwan.
Therefore, we do not consider setting up a subsidiary in Taiwan.
Do Evershine Provide so-called Employment Outsourcing Services in Taiwan like PEO services in USA?

Answer 1 by Dale Chen

We had been providing Taiwan Employment outsourcing Services (Abbreviated as EOS) until 24 May 2019.
And  Articles 17.1 and 63.1 of the Labor Law of Taiwan in 2019 was effective, which regulations  ask  real employer entity can  escape its obligation  through  other company to recruit its employees.
Therefore our EOS services has bee designing to  let  real employer entity be responsible for whole employer’s obligation at last.
Evershine only undertake to execute compliance practice on behalf of clients.
please see the Taiwan Employment Outsourcing Services

If possible, we  also propose you setup your own Representative Office in Taiwan to replace it.
The procedures and required documents for setting up your Representative Office in Taiwan become quicker, simpler and easier from 2019.
we suggest you to set up your own Representative Office in Taiwan, then using it to recruit your own employees in Taiwan.
That will be simple, easy, time-saving, money-saving.

Question 2 by Caleb:

Because USA and Taiwan did not yet sign double taxation treaty, If we recruit local employee as sales representative in Taiwan for more than 6 months, will it have risk to be redeemed as “Permanent Establishment”?

Answer 2 by Dale Chen:

I agree what Caleb said.
Taiwan have been signed Double Taxation Agreement (DTA) with many countries whose representative office will be no risk to be redeemed as “Permanent Establishment”.
However USA did not sign DTA with Taiwan.
Therefore, legally, If USA-based company recruit Taiwan local employee for more than 6 months, setting up RO will be not totally enough although Taiwan tax bureau less use this clause in the past.
If USA-based Company want to be 100% safe, without tax risk, we suggest you set up Branch or subsidiary.
When you wire in money for covering office expenses, employees’ expenses and salary, we suggest you add 5%, and let Taiwan entity have revenue to be 105% of total Taiwan cost.
That means corporate income tax will be (5% of total Taiwan cost * 20% Corporate income tax rate).
But as I know, decision for setting up Branch or subsidiary must be approved by your BOD meeting. Besides, you need to assign a legal person to be Taiwan legal representative, it might be quite difficult.
You need to balance risk and efforts.

Question 3 by Caleb:

Although we will require setting up Representative Office in Taiwan now, but in the future, we maybe need Taiwan entity to issue revenue invoices.
Can you tell us how many different entity types?
How to judge what kinds of entities you need to register?

Answer 3 by Jerry Chu

In Taiwan, Foreigners’ entities include subsidiary, branch, and representative.
The difference Among Representative, Branch, Office Subsidiary.
(1) Representative office would not be a taxable entity and cannot issue GUI (Government United Invoice). It is not a legal entity.
Yes: Does it have a Tax ID?
No: Issuing Selling Invoices?
No: Is it a legal Entity?
* No need to do VAT filing and corporate income Tax filing.
*But still need to do Payroll withholding Tax compliance filing and Employee social benefit tax paying and filing.
(2) Branch would be a taxable entity that could issue GUI (Government United Invoice). However, it would not be a legal entity.
Yes: Does it have a Tax ID?
Yes: Issuing Selling Invoices?
No: Is it a legal Entity?
*If you have revenue incurred in Taiwan, Branch will be better because without dividend distribution tax.
(3) Subsidiary would be a taxable entity and would be a legal entity
Yes: Does it have a Tax ID?
Yes Issuing Selling Invoices?
Yes: Is it a legal Entity?
*If you need to assign expatriates to Taiwan, capital will be more than NTD 500,000.

Question 4 by Caleb:

Let us focus on setting up Representative now.
What are the procedures and required documents for setting up your Representative?

Answer 4 by Jerry Chu

1. Procedures (service scope)
1.1 Apply to the Department of Commerce, MOEA, for Rep. Office Registration (7 days)
1.2 Apply to the Taxation Bureau, MOF, for a tax code (3 days)

2. Required Documents
2.1 Certificate of Incorporation (including basic information such as the registered address, date of incorporation, authorized/issued capital and list of directors)
2.2 Power of Attorney for appointing the Representative of the Rep. Office
* We will provide you with the template for item 2.2
2.3 Power of Attorney for appointing a local CPA (Evershine CPAs Firm) to handle the application.
* We will provide you with the template for item 2.3
2.4 Representative’s Driver License and Passport copy
2.5 Taiwan-Registered Office Address documents:
2.5.1 Consent Letter signed by the Landlord
2.5.2 Copy of the property tax statement
2.5.3 Tenancy Agreement

Please be aware: The procedures and required documents for setting up your Representative Office in Taiwan become quicker, simpler and easier since 2018.

Question 5 by Joshua:

After setting up representative office in Taiwan, what kinds of services you provide us?

Answer 5 by Kerry Chen:

We have two big categorized services, for Taiwan Local Staff and for For your assignee Expatriates.
For Taiwan Local staff:

Service Coverage-for Taiwan Local Employees:
* Recruiting contract
* asking-leave arrangement and over-shift processing complied with Taiwan regulations
* Online Payroll Management System
* File for listing and delisting of Labor Insurance and Health Insurance
* Gross salary calculation based on fixed and non-fixed salary, Leave and Overtime
* Labor Insurance Charge paid by the company and employee
* Health insurance Charge paid by the company and employee
* Pension Fund Charge paid by the company and employee
* Withholding Tax
* Gross salary and net-cash salary
* Salary wire transferring services
* Delivering payment slip to each employee
* Accepting query from each employee.
* Annual accumulation salary income and withholding tax report to Tax Bureau.
* Year-end insurance premium certificate
* Severance pay application
* Semi-annual adjustment of insured caps and LPA caps.
* Laid-off arrangement complied with Taiwan regulations.

For your assignee Expatriates:
Service Coverage-for Foreign Expatriates:
* Recruiting contract
*Work Permit Application.
*ARC (Aliens Resident Certificate) Application
*Arranging Pick-up in Tao-Yuan International Airport
*Arranging hotel or renting residence
*Arranging Trading center or Office renting
*Arranging opening bank account
*Arranging Cell Phone or Car renting
*Payroll Compliance
*Arranging Employees’ expenditure
*Annual Personal Income Tax when an Expatriates stay in Taiwan over 183 Days in a year.
*Other local services

Question 6 by Caleb:

Except Payroll relevant services, Taiwan office need to pay office expenses and Employees’ relevant expenses. What kinds of services can Evershine provide us?

Answer 6 by Dale Chen:

Yes, we always call it as Expenses Compliance Check (ECC) Services.
According to our past 18 years experiences, if doing compliance check after paying-out like Traditional CPA firm did, that will be very difficult to revise them to be complied with local tax regulations once existing non-complied transaction.
As for non-complied transactions, for example, original receipt is not GUI (Government Unified Invoice), or need to be categorized as salary etc.
Therefore, we always do tax compliance check before paying out.
We will issue Compliance Check Report to you for your review before paying out
Besides we will undertake Maker Role to arrange paying-out to payee through your Internet Banking Account.

In summary four of our services are as follows:
1. Tax Compliance Check of Employees’ expenses before paying out.
2. Tax Compliance Check of office expenses before paying out.
3. Tax Compliance Check of purchasing fixed assets before paying out.
4. Generating and uploading online banking remittance files, undertaking Maker Role to arrange paying-out to payee through your Internet Banking Account, then you approve it to wire out. To payee directly. Nobody will touch cash.

Please be aware that:
We always use Evershine Cloud System to support our services
>>If Clients only have Wi-Fi environment, they access Evershine Cloud System free of Charge through given user name +password.
>>Anytime, anyplace can access.
>> Using Parent Company’s designated account code to easily integrate Daily Journal Entries
>>Every Employee can only see his/her own expenses, not allow seeing others.
>>Every Employee can trace status of his/her own expenses if under approving or under paying or already paid.
>> Your company’s internal control and signing procedures can be set inside
>> Evershine Cloud System will generate designated bank files (can be encrypted), upload directly to your online banking
>> Online banking, remote payment can be released directly to payee like employees and suppliers, nobody will touch cash to avoid fraudulent event.
>>Financial chop and personal name chop do not need to be handed over to local finances staff.
>> Client can centrally control the expenses cycle from the group headquarters.
> > Evershine Cloud system automatically generates: account payable account voucher and Journal Entries after payment
>> Cashier and accountant do not need to double Key-in
>>you can upload Journal Entries in Excel or CSV format for uploading your company ERP.
>>If your company has a software engineer, you can use API or Web service and other methods to integrate with your company’s ERP in time.

If you want to have more information, please don’t hesitate to contact us.

Contact Us

E-mail: tpe4ww@evershinecpa.com
or
Contact us during office hours  (Taipei and China Time Zone)
Manager Jerry Chu, USA Graduate School Alumni and a well-English speaker
Mobile: +886-939-357-735
Tel No.: +886-2-2717-0515 ext. 103

Additional Information

Taipei Evershine CPAs Firm

6th Floor, 378 Chang Chun Rd.,Zhongshan Dist., Taipei City, Taiwan R.O.C.
Near MRT Nanjing Fuxing Station
Principal Partner :
Dale C.C. Chen
CPA in Taiwan+China+UK/ MBA+DBA/ Patent Attorney in Taiwan
Mobile: +86-139-1048-6278 in China ;
Mobile:+886-933920199 in Taipei
Wechat ID: evershiinecpa ;
Line ID:evershinecpa
skype:daleccchen ;
Linking Address:   Dale Chen Linkedin

Evershine Global Service Sites for Reference:

Taipei Evershine,
Xiamen Evershine, Beijing Evershine, Shanghai Evershine,
New York Evershine, San Francisco Evershine, Houston Evershine,
Tokyo Evershine,  Seoul Evershine,
Hanoi EvershineHo Chi Minh,
Bangkok Evershine, Singapore Evershine, Kuala Lumpur Evershine,
Jakarta Evershine, Manila Evershine,
Melbourne Evershine,  Sydney Evershine,
New Delhi Evershine, Mumbai Evershine,
Frankfurt Evershine, London EvershineToronto Evershine.

Other cities with existent clients:
Miami, Atlanta, Oklahoma, Phoenix, Michigan, Seattle, Delaware;
Berlin, Stuttgart;Paris;Amsterdam; Prague; Czech Republic; Bucharest;
Bangalore; Surabaya;
Kaohsiung, Hong Kong, Shenzhen, Donguan, Guangzhou, Qingyuan, Yongkang, Hangzhou, Suzhou, Kunshan, Nanjing, Chongqing, Xuchang, Qingdao, Tianjin.

Evershine Potential Serviceable City (2 months preparatory period):
Evershine CPAs Firm is an IAPA member firm headquartered in London, with 300 member offices worldwide and approximately 10,000 employees.
Evershine CPAs Firm is a LEA member headquartered in Chicago, USA, it has 600 member offices worldwide and employs approximately 28,000 people.
Besides, Evershine is Taiwan local Partner of ADP Streamline ®.

We provide multi-cities one-stop service  supported by cloud accounting and payroll system.
We can arrange services for your company’s overseas subsidiaries.

Please contact us by email at tpe4ww HQ4TPE@evershinecpa.com

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All Services in Taiwan

Company registration,Open bank account,
Work Permit and Visa application;
Online Accounting Services,Payment Services,
Payroll compliance Services, Labor Management Services
Tax Compliance Services; VAT and Income Tax
B2B Digital Marketing Services; Trademark Registration;
Patent application; Due Diligence for M&A project,

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Taiwan Tax Benefit

For enterprises that received approval for this tax benefit, the withholding tax rate on its income from Taiwan will be reduced from 20% to 3% or 2%.
Businesses whose headquarters are outside of Taiwan must apply for the tax benefit described in Article 25 of Income Tax Act with the Ministry of Finance and 15% of its business revenue within Taiwan would be the taxable income.

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Due Diligence in Taiwan

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Including both Financial Due Diligence (FDD) and Legal Due Diligence(LDD).
Evershine CPAs Firm is well-experienced in doing these services
and has already handled a hundred of Due Diligence (DD) cases assigned by global companies.
Among them , one was a transaction worth 700 millions USD.

Taiwan Digital Marketing

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Taiwan Website Setup Services
Chinese Web Content Editing Service
Chinese Google Ads Keyword Advertising
Taiwan local staffing: Recruiting Services for Sales Representatives
Providing CRM for Recording marketing activities
Temporary employment of Taiwan sales representatives
Taiwan Incorporation, Payroll, Accounting, Tax etc one-stop services