Taiwan Company Law provides favourable conditions for business establishment 

The codified Taiwan Company Law constitutes the major regime of Taiwan corporate law and systematically covers matters from establishment, management and audit structure, accounting, merger and split-up to dissolution and liquidation.  As Delphine Chen, partner at Formosa Transnational Attorneys at Law, explained, it provides four forms of business entity, among which limited company and company limited by shares are the most popular forms. In addition, Taiwan Company Law also provides two other options for a foreign investor to establish a presence in Taiwan: a branch and a representative (liaison) office.   

Establishing a subsidiary in Taiwan allows for having the legal liability of operation in Taiwan independent of the parent company.  The major advantage of establishing a branch in Taiwan lies in the fact that dividend tax does not have to be paid.   

According to the corporate law, a representative (liaison) office, with the most simplified procedure of registration,  may only conduct juristic acts within the scope of its head office��s businesses, such as placing orders and negotiating prices, but cannot engage in business operation, such as importing goods for sale or other activities that will generate business income.  

 The amendment to Taiwan Company Law of 29^th April 2009 has abolished the minimum capital (minimum working capital requirement in the case of a Taiwan branch of a foreign company) as an attempt to facilitate a more friendly environment for investment.   

In addition, Merger and Acquisition Law, Securities and Exchange Law, Fair Trade Law and other secondary legislations promulgated by relevant authorities are also relevant to corporate matters in Taiwan. 

Chun-Yih Cheng, senior partner at Formosa Transnational Attorneys at Law, pointed out that depending on the structure of investment/transaction, cross-border matters may involve various issues. Some of them include: (i) the requirement for obtaining a foreign investment approval from the Investment Commission of the MOEA; (ii) prohibition or restriction of a particular industry involving foreign investments; (iii) merger control filing associated with the transaction/investment; (iv) employment matter including employment contract, statutory minimum benefits for employees, massive layoff/transfer of employees; (v) dispute resolution, including recognition/enforcement for a foreign judgment/ arbitral award. 

Formosa Transnational Attorneys at Law (FT), one of the largest and most prestigious law firms in Taiwan, is recognized as a full-service law firm with professionals including attorneys admitted in various jurisdictions, consultants on foreign law, patent attorneys and engineers.  FT is divided into three major practice groups: corporate & finance, dispute resolution and technology law.  

Utilizing specialization, teamwork and professionalism, FT is always at the forefront of industry development, providing multinational and domestic companies, entrepreneurs, agencies and organizations with total solutions on all matters that clients may encounter during their investments in Taiwan. 

Recently, FT has advised a well-known designer and supplier of CDMA chipsets and system software in cross-border investment project in Taiwan, which includes acquisition of all issued shares of a subsidiary of a TWSE-listed company and establishment of a subsidiary in the science park with factory and fab operation.