If you have read Taiwan Company Formation — Basics and Taiwan Company Formation — Advanced Part 1, you may also want to read Taiwan Company Formation — Advanced Part 2.
The Q&A below, prepared by Wei Tseng (曾雋崴), Taiwan Attorney, may also be helpful to those considering establishing a company in Taiwan.
1. What should I keep in mind when remitting capital from Korea to a Taiwan company's preparatory account?
Korean banks generally require the investor personally to visit a bank in Korea and remit the funds from the investor's own account.
Remitting the funds through online banking or through a relative or acquaintance in Korea on the investor's behalf is not permitted.
In addition, under Korea's foreign exchange laws, a Korean national who establishes or acquires an equity interest in a foreign company must file an "overseas direct investment report." The report must be filed when the capital is remitted to the Taiwan company, and failure to file may result in sanctions for violating foreign exchange laws.
Before remitting the capital, please consult the Korean bank with which you normally do business.
2. When paying in the company's capital, can I transfer New Taiwan dollars from my own Taiwan account to the company's preparatory account?
Yes, but you must submit documents showing the source of the New Taiwan dollar funds acquired in Taiwan.
For example, if the funds are salary income earned in Taiwan, you must submit a copy of the withholding statement for that salary income (薪資所得的扣繳憑單影本).
If the funds are dividends or profits from an investment in a Taiwan business, you must submit a copy of the withholding statement for those dividends or profits (股息和紅利的扣繳憑單影本).
If the funds are remitted from a Korean bank account, no source-of-funds documents need to be attached.
3. After the capital has been deposited into the company's preparatory account, when can the account be converted into a formal account?
Generally, the company registration documents must first be issued.
The company's responsible person may then visit the bank to convert the preparatory account into a formal account.
However, because each bank has different internal rules, if you need to use the capital urgently, it is advisable to ask the bank in advance.
4. Can I use online banking immediately after the company's preparatory account is converted into a formal account?
Requirements vary by bank, but generally at least a mobile phone number is required.
Some banks may impose additional requirements, such as requiring the account to have been in use for at least six months after the company was established.
5. Can the company employ Korean nationals?
A. No restriction applies to the first employee: Manager of a General Overseas Chinese or Foreign Invested Business (一般僑外投資事業主管工作).
B. Restrictions apply from the second employee onward: when employing more than one foreign national, the employee's relevant education and work experience, the average-salary requirement, and the company's capital and revenue requirements are handled in accordance with the standards for "specialized or technical work" (專門性或技術性工作).
See the Taiwan Ministry of Labor website: https://ezworktaiwan.wda.gov.tw/cp.aspx?n=A88DC323EF7C85FF
Please contact us at any time if you have additional questions.
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