Selling on a Taiwan Marketplace From the US: Branch Registration, Business Tax and the People Who Carry the Risk

Up to a year in prison or detention, a fine of up to NT$150,000, or both. Taiwan's Company Act sets that penalty for whoever does business in Taiwan in a foreign company's name before the company has registered a branch (Article 371). The penalty is aimed at the individual who acts.

Shipping each order from the US puts a brand in a different position, because in Taiwan every such parcel is the buyer's import. The questions begin when stock moves into a Taiwan warehouse and someone on the ground starts acting for the brand.

The individual behind the business

Paragraph 2 of Company Act Article 371 has a civil side that is easy to miss. Whoever acted bears civil liability personally, jointly with anyone else who acted, and the competent authority bars further use of the foreign company's name. Prison and a fine can be imposed together.

Who is the person who acts? The text names no job titles; it uses the word 行為人. If running Taiwan stock in the parent's name counts as doing business in Taiwan, the exposure falls on whoever conducts that business for the parent, whether an employee sent from the US or a local manager.

Registering a branch moves the risk to a named person. Company Act Article 372 requires the foreign company to set aside operating funds for the branch and to appoint a representative as its responsible person in Taiwan (paragraph 1). If that person returns the funds to the parent after registration, or lets the parent take them back, the penalty is up to five years in prison or detention (paragraph 2). The fine runs from NT$500,000 to NT$2.5 million, and prison and fine can be combined. Third parties who suffer loss as a result can hold the responsible person and the foreign company jointly liable (paragraph 3).

Stock in a Taiwan warehouse

Once goods sit in a Taiwan warehouse, every order leaves from inside Taiwan. Taiwan's business tax, a VAT, treats that as a domestic sale: under Article 4 of the Value-added and Non-value-added Business Tax Act, goods that must be transported to the buyer are sold in Taiwan when they are dispatched from Taiwan.

Registration comes before the first sale. Article 28 requires a business entity's head office and each of its other fixed places of business to apply for tax registration before starting business, and a foreign enterprise's fixed place of business in Taiwan is itself a business entity (Article 6, item 3). The statute stops there. It sets no test for when stock held by a fulfillment company makes that company's warehouse a foreign seller's fixed place of business, so the point belongs in a written inquiry to the competent National Taxation Bureau, sent with the warehouse contract before the first shipment goes in. The same facts bear on Article 371.

Parcels shipped from the US

Imports are taxed too (Business Tax Act, Article 1). For imported goods, the taxpayer is the consignee or holder (Article 2, item 2), and customs collects the tax (Article 41). On a parcel addressed to a Taiwan consumer, that consignee is the consumer.

The Ministry of Finance's notes on cross-border online transactions give the arithmetic: 5% of the customs value plus duty, commodity tax, tobacco and alcohol tax and the tobacco health surcharge, where those apply. Express goods with a customs value of up to NT$50,000 that clear on a simplified declaration have the tax advanced by the express company, which then collects it from the consignee (Online transaction notes: imports).

One line in those notes is addressed to buyers but lands on sellers. A Taiwan buyer may ask the overseas seller to state the actual transaction price on the shipping document, so the express broker can declare it correctly.

Low-value parcels get a waiver with conditions. At a customs value of NT$2,000 or less, duty, commodity tax and business tax are not charged; above that, the full value is taxed. Tobacco, alcohol and tariff-quota farm goods never qualify, the waiver stops after six uses in a half-year, and one batch of express goods from the same shipper on the same flight to the same consignee may not be split into separate declarations.

Branch, subsidiary or representative office

With a registered branch, the US company itself does business in Taiwan in its own name, which is what Article 371 permits once registration is done. The Ministry of Economic Affairs publishes the filing list (Documents and notes for a foreign company's Taiwan branch). It contains one extra gate. Where mainland Chinese persons or entities hold, directly or indirectly, more than 30% of the foreign company or can control it, the company must obtain an investment permit from the ministry's Department of Investment Review before applying for the branch.

For a subsidiary the sequence starts with approval. A US parent holding shares in a Taiwan company is an investor under the Statute for Investment by Foreign Nationals (Article 4, item 1), and it files an application and investment plan for approval (Article 8, paragraph 1). The authority is to decide within one month of a complete filing, or within two months where another agency's powers are involved (paragraph 3). How the two forms differ on liability and tax is covered in Entering the Taiwan market: subsidiary or branch.

Representative offices sit outside this choice. Company Act Article 386 provides for registering one when a foreign company has no intention of setting up a branch to do business in Taiwan, a premise that selling from Taiwan stock does not fit. The tax treatment of such offices is in Taiwan representative office tax.

Returns and product claims

A US-style return policy cannot cut back Taiwan's seven-day right. Article 19 of the Consumer Protection Act gives an online buyer seven days from receipt to cancel, by sending the goods back or giving written notice, with no reason and no cost (paragraph 1). Agreements that contradict the article are void under paragraph 5. The only exceptions are the reasonable ones the Executive Yuan sets. A seller who never told the buyer about the right faces a longer window: the seven days start the day after the information is given, capped at four months from the start of the original period (paragraph 3).

Product liability turns on who imports. The Act counts a business that imports goods as a business operator (Article 2, item 2) and treats an importing business operator as the product's designer, producer and manufacturer (Article 9). A US brand that imports its own bulk stock therefore answers in Taiwan as the manufacturer, whoever actually made the goods. The duties come from Article 7. Products must, when they are put on the market, meet the safety that can reasonably be expected under the technical or professional standards of that time, and products that could endanger life, health or property need a clear warning and emergency instructions. A business operator that breaches those duties and causes harm to consumers or third parties is jointly liable; a court may reduce the award only if the operator proves it was not negligent. Consumer suits may be brought in the court where the consumer relationship arose (Article 47).

Staff in Taiwan

An American sent over to run returns or quality checks needs a work permit first. Unless the law provides otherwise, a foreign national may not work in Taiwan without a permit applied for by an employer (Employment Service Act, Article 43). If that person then does business in Taiwan in the name of a parent that has no registered branch, Article 371's penalty is aimed at them.

Hiring a foreign resident locally raises a different split. At a company or firm with five or more workers, that employee is enrolled in labor insurance through the employer like everyone else, since the Labor Insurance Act, Article 6, includes foreign employees. Monthly pension contributions are another matter. The employer pays into an individual account at the Bureau of Labor Insurance (Labor Pension Act, Article 6) only for workers within Article 7: Taiwan nationals under the Labor Standards Act, foreign spouses of Taiwan nationals with household registration who hold residence permits and work in Taiwan (and some who stay on after divorce or the spouse's death), and foreign permanent residents.

Work a Taiwan lawyer can take on

For the person who will act in Taiwan, whether a country manager or a branch's responsible person, a Taiwan lawyer can explain what Articles 371 and 372 put on that individual. The lawyer can also prepare the branch registration file or the subsidiary's investment application, put a written question about the warehouse to the National Taxation Bureau, and draft the employment documents and work-permit applications for the first hires. When a Taiwan buyer demands a refund or compensation, the lawyer can answer the claim and represent the company in mediation or court. Consultations with an English-speaking lawyer in Taipei are available through Hovering International Law Firm (昊鼎國際法律事務所) at wei@hoveringlaw.com.tw; see also our investment page. Taipei office: 7F-2, No. 35, Sec. 1, Chengde Rd., Datong Dist., Taipei City 103 (臺北市大同區承德路一段35號7樓之2).

Article 372 also reaches the branch itself. Once a responsible person's conviction for returning the operating funds becomes final, the central authority revokes or annuls the branch registration, unless the shortfall was made good before the judgment became final.

Sources

Checked October 28, 2026.

• Company Act (公司法), Articles 371, 372, 386
• Value-added and Non-value-added Business Tax Act (加值型及非加值型營業稅法), Articles 1, 2, 4, 6, 28, 41
• Ministry of Finance tax portal, Online transaction notes: imports (updated September 11, 2026; in Chinese)
• Ministry of Economic Affairs, Administration of Commerce, documents and notes for establishing a Taiwan branch of a foreign company (in Chinese)
• Statute for Investment by Foreign Nationals (外國人投資條例), Articles 4, 8
• Consumer Protection Act (消費者保護法), Articles 2, 7, 9, 19, 47
• Labor Pension Act (勞工退休金條例), Articles 6, 7
• Labor Insurance Act (勞工保險條例), Article 6
• Employment Service Act (就業服務法), Article 43