Premia TNC Taiwan Team
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Establishing a Base in Taiwan after Partnering with Coupang
This is one of the most frequently asked questions we’ve received recently. With Coupang’s expansion into Taiwan, there’s a growing movement among domestic partners to establish companies in Taiwan and actively expand overseas.
However, Taiwan’s foreign investment and incorporation procedures differ from those of Korea, making advance preparation crucial. There are many instances of trial and error during the actual incorporation process, leading many to wonder, “I didn’t know it would be this difficult.” This content, based on our own experiences establishing a corporation in Taiwan, outlines essential checkpoints for Coupang partners.
MOEAIC Approval is Key to Avoid Losses when Incorporating in Taiwan
Company A attempted to quickly establish a Taipei corporation in line with discussions with its Taiwanese partner’s global team to expand supply. However, unaware of the Ministry of Economic Affairs, Investment Commission approval process required for foreign investment, the application was rejected from the registration stage, delaying the project by over two months.
Coupang Partner Checkpoints:
- Foreign investors must pass a preliminary investment review.
- Required documents: Taiwanese corporation business plan, shareholder information, capital plan, representative information, etc.
- Approval period: 3-4 weeks on average (It is recommended to reflect the approval period in your business schedule to ensure sufficient time.)
- If you have a contract with Coupang, it would be useful as a reference.
Mandatory Office Address Required for Coupang Taiwanese Partners
Company B established a Taiwanese corporation, but since its actual operations would be conducted in Korea, it had no plans to open a local office. However, registering a Taiwanese corporation required an address, which resulted in delays during the corporation registration process.
Coupang Partner Checkpoints:
- In Taiwan, when registering a corporation, it is mandatory to secure a ‘commercial’ or ‘office’ address.
- Taipei City requires landlords to confirm the building’s purpose (commercial, office, etc.) when registering an address.
- Check if the company’s business type can be registered at the address.
- Check the contract and lease terms when using a shared or serviced office.
Taiwanese Company Name Rejected over 'Construction' Term
ABC Construction Limited, Company C, wanted to emphasize its professional image in Taiwan. However, in Taiwan, using certain terms like “建設” (construction) requires a special license and meeting certain conditions, such as capitalization. Unaware of this, Company C was forced to change its name two or three times because the registration system did not allow it.
Coupang Partner Checkpoints:
- Pre-verification of company name is required (using the Taiwanese government system (公司名稱預查)).
- Restricted word examples: construction, landlord, group, etc.
- It may be a word not commonly used in Taiwan, so expert help is recommended when registering a Chinese name.
Preparations before Opening a Bank Account or Establishing a Corporation
Company D, a Taiwanese Coupang partner, planned and completed its incorporation as scheduled, sharing the incorporation completion date with its Taiwanese partner. However, after receiving the foreign investment notification, they belatedly learned that a preparatory account for the company at a local bank was required for capital remittance. They belatedly inquired about banks that could open preparatory accounts, but when they learned that the local bank was having difficulty opening a preparatory account for a foreign corporation, they requested our assistance. This process resulted in a loss of over six weeks.
Coupang Partner Checkpoints:
- Preliminary consultation and meeting are required after selecting a bank.
- Remittance is possible once the Taiwanese government approves foreign investment.
- You need to prepare documents related to the bank’s KYC (Know Your Customer) system.
- You can choose between Korean or foreign banks.
As Coupang’s collaboration expands overseas, many partners are considering establishing subsidiaries in Taiwan. However, Taiwan often has separate systems for foreigners, and administrative procedures are more complex than in Korea.
“If Coupang’s Taiwanese partners want to steadily expand their global business, they must start by understanding Taiwan’s systems and culture.”
Taiwan is attracting attention as a country with relatively low entry barriers and a stable economic environment for companies considering overseas expansion. As a bridgehead for entering the Asian market, Taiwan offers tax benefits in high-tech industries and R&D, offering favorable conditions for companies planning overseas expansion.
If you’re considering expanding overseas, Taiwan is a market worth considering as your first port of call due to its economic, geographical, and tax advantages. Familiarizing yourself with Taiwan’s corporate tax rates, tax bases, and tax breaks, and seeking advice from a tax professional, will ensure a smoother overseas expansion.
Frequently Asked Questions
1. Is foreign investment review absolutely necessary when establishing a Taiwanese corporation?
Yes, foreign investors seeking to establish a corporation in Taiwan must obtain prior investment review approval from the Ministry of Economic Affairs, Investment Commission (MOEAIC). Registration applications submitted without this process may be rejected.
2. Can a Taiwanese corporate address also be used as a shared office?
Yes, shared offices are possible, but when registering an address, the building use and lease terms must be consistent with the business purpose and meet Taipei City’s screening criteria.
3. When should I prepare to open a Taiwanese bank account?
The best way to prevent business delays is to select a bank from the incorporation preparation stage and prepare to open an account in advance in time for the remittance of capital after investment review approval.
Premia TNC Taiwan Team
Author
Premia TNC Taiwan is a dynamic team of experts dedicated to supporting businesses and entrepreneurs as they establish, manage, and grow their presence in Singapore and across the region. Premia TNC Taiwan specializes in providing tailored corporate services, from company incorporation and compliance to tax planning and accounting. With our extensive experience and deep understanding of the local regulatory environment, we are here to make business operations smoother and more efficient.
