A COMPARISON BETWEEN
A FOREIGN-INVESTMENT-APPROVED (FIA)
SUBSIDIARY COMPANY AND A BRANCH
OFFICE OF A FOREIGN COMPANY
 
FIA Company
Branch Office
  1. Legal form
A locally incorporated company. A branch office of a foreign company.
  1. Activities
Can conduct any activities except for prohibited and restricted industries included in the Negative List for Investment by Foreign Nationals Can conduct activities within its head office's scope of business, and in certain cases special approval from government is required as prescribed by laws and regulations.
Prohibited and restricted industries are the same as for an FIA company.
  1. General requirements
  1. Must have a minimum of one corporate shareholder (or of two individual shareholders), three directors, and one supervisor, all of whom may be foreign nationals residing outside the ROC.
  1. Not required to have shareholders, directors, or supervisors.
  1. The manager should be either an ROC national or a foreign national with an alien resident certificate.
  1. Same as for an FIA company for Branch manager.
 
  1. Not required to appoint an ROC agent for litigious and non-litigious matters.
  1. An ROC national or a foreign national residing in the ROC must be appointed as the foreign company's ROC agent for litigious and non-litigious matters.
 
  1. Minimum capital of NT$500,000 or NT$ 250,000 for a company limited by shares or a limited company, respectively.
  1. Minimum Capital is NT$ 500,000 if the foreign parent company is a company limited by shares; or NT$ 250,000 if the foreign parent company is a limited company.
  1. Liabilities of shareholders or head office
The shareholders are liable to the extent of their capital contribution in the FIA company The foreign head office is liable for any liabilities unsettled by the branch.
  1. Required licenses
FIA approval
Company registration
Business license 		Certificate of recognition
Company registration
Business license
  1. Time needed to obtain required licenses
About 5 weeks About 5 weeks
  1. Sources of capital contribution
 Initial capital contribution must be paid with foreign currency remitted in through bank transfer. Subsequent contributions may be made either by remitting in foreign currency or by capitalizing retained earnings or capital surplus account. Operation capital must be made in the form of inward remittance by the foreign head office.
  1. Capital shares
Capital is divided into shares, each having the same par value (e.g., NT$ 10 per share).Shares can be transferred freely one year after the incorporation of the company.However, prior approval form the Investment Commission is required before the shares can be transferred. Not applicable
  1. Remittance of capital gains generated from share transfer
Permitted Not applicable.
  1. Value-added tax (VAT)
 Subject to VAT at 5% on value added, but VAT may be reduced to zero rate if certain conditions (e.g., export) are met. Same as for an FIA company.
  1. Incom tax
Progressive rates of 15% on income up to NT$ 100,000 and 25% on income over NT$ 100,000 Same as for an FIA company.
  1. Annual income after income tax
Annual income after income tax must be distributed (cash dividends) or capitalized (stock dividends), or retained in the books after a 10% surtax on the retained amount has been paid. Not applicable.
  1. Withholding income tax rate on dividends payable to nonresident shareholders
20% No tax is withheld on the profits that a branch remits to its head office.
  1. Remittance of profit, net of income tax and withholding income tax
Permitted Permitted