Premia TNC Taiwan Team
Author
Consumer Characteristics and the Rise of K-Beauty in Taiwan
Taiwanese consumers prefer global brands but value localized services. K-beauty cosmetics are particularly popular in Taiwan, fueled by the Korean Wave. Korean cosmetics have consistently enjoyed popularity in Taiwan thanks to their sophisticated packaging, innovative ingredients, and the “Made in Korea” image. However, simply exporting K-beauty products isn’t enough, as Taiwanese consumers prioritize localized services and products while also favoring global brands. Marketing strategies tailored to local consumer preferences and product localization are essential.
Many K-beauty companies have recently entered or are considering entering the Taiwanese market. In addition to existing e-commerce platforms, they can leverage Coupang’s local logistics network to quickly enter the Taiwanese market. Coupang’s fast logistics and efficient delivery system can play a crucial role in the growth of K-beauty brands in Taiwan.
Key Annual Reporting Requirements for Companies Entering Taiwan
K-beauty companies entering the Taiwanese market must be aware of the regulations and obligations related to incorporation and operation. In particular, failure to properly file annual reports after incorporating a Taiwanese corporation can result in penalties and tax penalties. Therefore, it’s crucial to familiarize yourself with and prepare the following annual reporting requirements.
Below are the annual reporting requirements that Taiwanese corporations must comply with each year:
1. Corporate Income Tax Report
- Reporting deadline: Within 5 months after the end of the fiscal year.
- Example) A corporation that closes its accounts on December 31st must report by May 31st of the following year.
- Surcharge imposed for delayed reporting.
- Content: Submitting an income tax return for the previous year’s income and expenses.
2. Value Added Tax (VAT) Reporting
- Reporting cycle: monthly or bimonthly.
- Monthly reporting target is by the 15th of the following month.
- Bimonthly reporting target is within 15 days after the end of the relevant period.
- Penalties and interest may apply in case of delay.
- Content: Reporting and payment of sales and purchase taxes.
3. Comprehensive Withholding Tax Report
- Reporting deadline: By the 10th of the following month based on the last day of each month.
- Example) Withholding tax for June must be reported by July 10th.
- Failure to report may result in fines and additional charges.
- Content: Reporting and paying employee salary withholding taxes.
4. Executive Information Report
- Reporting deadline: Required to be reported between March 1st and March 31st of each year.
- Contents: Report on the list of executives (directors, auditors , etc.) and any changes.
- Subject to administrative action in case of delay.
The Impact on K-Beauty Companies
As Coupang’s case illustrates, competitiveness in the Taiwanese market goes beyond entering the market. This is to ensure the following:
- A localization strategy tailored to Taiwanese consumer characteristics
- Rapid market adaptation through platforms like Coupang
- Collaboration with professional accounting and tax consulting firms
These three factors are the key to success in the Taiwanese market.
Especially for K-beauty companies, collaborating with Coupang offers opportunities to open new markets and grow alongside the Korean Wave in the Taiwanese market. However, establishing a local corporation requires thorough preparation, including the necessary accounting and tax filings and annual reports.
For this, assistance from Taiwanese company establishment and tax experts is essential.
Collaborate with Local Experts in Taiwan
Founded in 2003, Premia TNC offers a one-stop solution, from corporate establishment to tax management and visa acquisition, with a dedicated Korean language support team providing professional consulting in key locations including Hong Kong, Singapore, Vietnam, Taiwan, and Dubai.
Frequently Asked Questions
1. Which online sales platforms in Taiwan are suitable for K-beauty brands?
Taiwan’s major online sales platforms include Shopee, PChome, momo, and Coupang. Understanding the unique characteristics of each platform and developing a customized strategy to leverage them is crucial.
2. What are some common mistakes people make when filing taxes and establishing a business in Taiwan?
A common mistake made after incorporating a company in Taiwan is delaying or failing to file annual reports (corporate income tax, value-added tax, comprehensive withholding tax, and so on). Misunderstanding local tax regulations or failing to collaborate with a tax professional after incorporation can also lead to problems.
3. What are the key factors for enhancing the competitiveness of K-beauty brands in the Taiwanese market?
As mentioned, developing customized products tailored to local consumer characteristics is key, and building a strategic brand image that reflects the popularity of K-beauty is also important.
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.
