Company Establishment Process
Company Name pre-investigation
- Name 2-5 pcs
- Business items
- Photocopy of the person in charge’s ID card
Company Registration
- Open bank preparatory account
Company Name Pre-check Verification Form
Personal seal of the person in charge
- Total capital paid in
Shareholders deposit capital
- Convene a shareholders meeting
Draft the company's articles of incorporation
Election of Directors and Supervisors
Minutes of Shareholders' Meetings/Shareholders' Consent Letter(personally signed)
Board meeting minutes/sign-in book(personally signed)
Consent letter of directors and supervisors (personally signed)
- Deliver Company registration
Obtain Government Uniform Invoice number
- Change bank account name
The person in charge of go to the bank to handle it in person
company registration approval documents
articles of incorporation
the first corporate seal & the second corporate seal
※Documents to be prepared in accordance with the regulations of the bank that opened the account
Business Registration
- Tax registration delivery
- The person in charge go to the IRS to sign
- Apply for invoice purchase ticket
- Purchase invoice
Firm＆Limited Company＆Company Limited Establishment Comparison Table
| Capital | Generally no accountant’s signature is required for under NT$ 200,000 |
|---|---|
| Number of Shareholders | sole proprietorship or partnership |
Directors and Supervisors’ Shareholding Restrictions | not applicable |
| The Exclusive Right to Company’s name | the scope only extends to one county (city) |
| Shareholder Duties | unlimited liability |
Restriction on Leaving the ROC for the person in charge | Restrictions on leaving the country for taxes owed more than NT$2 million (inclusive) |
| Merchant Registration | Import and export required |
| Invoice | be able to apply for exemption of invoice (but need to be a small-scale business person) |
| Provisional Payment | according to tax law |
| Withholding | according to tax law |
| General Business Tax Rate | 1% |
| Profit-seeking Enterprise Income Tax Rate | N/A |
| Tax On Undistributed Profit rate | N/A |
| Capital | Unlimited (on the principle of being able to meet the capital required for business operations) |
|---|---|
| Number of shareholders | 1 person or more |
Directors and supervisors’ shareholding restrictions | not applicable |
| The exclusive right to company’s name | nationwide |
| Shareholder responsibility | Limited to the amount of capital |
Restriction on Leaving the ROC for the person in charge | Restrictions on leaving the country for taxes owed more than NT$2 million (inclusive) |
| Merchant registration | Import and export required |
| Invoice | Using Invoice |
| Provisional payment | In September of each year, return 50% of the tax paid in the previous year |
| Withholding | according to tax law |
| General business tax rate | 5% |
| Profit-seeking enterprise income tax rate | 20% |
| Tax on undistributed profit rate | 1.Surplus distribution 2.Undistributed surplus must be levied 5% |
| Capital | Accountant visa is required regardless of the amount |
|---|---|
| Number of shareholders | 2 person or more |
Directors and supervisors’ shareholding restrictions | person in charge (limited: must have equity; limited shares; no need to hold shares) |
| The exclusive right to company’s name | nationwide |
| Shareholder duties | The liability of shareholders to the company shall be limited to payment in full of the shares they have subscribed. (Article 154 of the Company Law) |
Restriction on Leaving the ROC for the person in charge | Restrictions on leaving the country for taxes owed more than NT$2 million (inclusive) |
| Merchant registration | Import and export required |
| Invoice | Using invoice |
| Provisional payment | In September of each year, return 50% of the tax paid in the previous year |
| Withholding | according to tax law |
| General business tax rate | 5% |
| Profit-seeking enterprise income tax rate | 20% |
| Tax on undistributed profit rate | 1.Surplus distribution 2.Undistributed surplus must be levied 5% |
Analysis of the increased cost of using the house as a business address registration
For landlords or small and medium-sized enterprises owners, the costs that will increase after the house is registered as
a company or registered as a firm are summarized and explained as follows.
| Cost items that will increase after the house is used as a company or firm | |||
|---|---|---|---|
| Household tax rate | Residential Purposes | Non residential Purposes(Non-business use) | Business tax rate |
| House Tax | Present ValueX1.2% | Present ValueX2% | Present valueX3% |
| Land Value Tax | 0.20% | 1% | |
| The Land Value Increment Tax | 10% | 40% | |
| Electricity & Water bill(Limit to change the billing name to the company name) | Non-commercial electricity consumption below 200 degrees is NT$2.2 per kilowatt-hour, 201 degrees to 600 degrees is NT$2.7 per kilowatt-hour exceeding 600 degrees and NT$3.3 per kilowatt-hour(Not considering price changes in the summer, only for reference) | Operating electricity NT$3.3 per kWh | |
| Telephone fee (Basic fee)(Limit to change the billing name to the company name) | NT$70~95 | NT$295 | |
House Tax
If the house is used for both residential and business purposes, it is necessary to actively apply to the tax collection agency where the house is located to apply different tax rates for the assessment of house tax according to the respective area of the house and business to reduce the house tax.However, for non-domestic households, the taxable area shall not be less than one-sixth of the total area.
Calculation method: House standard unit price area-Depreciation rate ╳ Lot grade rate ╳ Applicable tax rate = House tax
Land Value Tax
Calculation method：Area of declared land price ╳ Tax Rate＝Land Value Tax
Land Value Increment Tax
It will only be affected if it is sold within one year, and you can apply for the calculation of the proportion of residential use calculations based on the calculation of business use.
Second Generation NHI
If the landlord rents out the house and collects more than NT$20,000, the second-generation health insurance fee must be paid at a rate of 1.91%. If the landlord is a natural person, the annual personal lease income tax must be filed.
With the increasing development of e-commerce, the Ministry of Finance has listed online transactions as the focus of tax inspections. For example, Facebook and LINE are included in the review. People who operate online shopping, if the monthly sales volume of goods reaches NTD80,000 or labor services reaches NTD40,000, they will reach the tax threshold.They must go through business registration in accordance with the law and pay Profit-seeking Enterprise Income Tax.
Since May 2013, the Ministry of Finance announced the establishment of a special task force for online shopping to discuss how to “catching leaks” of e-commerce platforms. In addition to tax inspections on well-known online shopping platforms such as Taobao, the inspection targets will be expanded to emerging social tools, especially the most popular Facebook and LINE, which will be included in the scope of online transaction tax inspections.
Richar Richlife reminds you that if an individual sells goods or services on an online platform, the monthly average sales reach the minimum threshold, please apply for business registration with the IRS domicile or place of residence, in order to avoid punishment.