Unpaid Invoices From a Taiwan Buyer: Payment Orders, Provisional Attachment, Lawsuits and the Two-Year Limit

An Oregon components supplier shipped four orders to a Kaohsiung assembler on sixty-day terms. The first two were paid late, the third and fourth not at all, and the buyer's purchasing manager has stopped answering e-mail. The open balance is about US$180,000, the last invoice fell due nineteen months ago, and the sales contract says nothing about governing law or disputes (a fictional example).

The good news for a foreign creditor is that Taiwan has a cheap, paper-based procedure for undisputed debts and a working enforcement system. The bad news is a short limitation period that catches sellers who wait.

The two-year clock on the price of goods

Taiwan's general limitation period is fifteen years (Civil Code, Article 125), but Article 127 lists claims that expire after two years, and item 8 is the price of goods and products supplied by merchants, manufacturers and craftsmen. A seller's invoice for goods is squarely inside it. In the example, the most recent unpaid invoice has five months left, and the older one less.

Article 127 applies where Taiwan law governs the sale. Under Article 36 of the Act Governing the Choice of Law in Civil Matters Involving Foreign Elements, limitation follows the law that governs the claim, and where the contract chose none, Article 20 presumes the law of the party whose performance characterizes the contract, which in a sale of goods may be the seller's. Treat the two-year date as the deadline that matters until counsel has confirmed which law governs.

Article 129 lists what interrupts the period: a demand, an acknowledgment by the debtor, and the filing of suit. Applying for a payment order, applying for mediation or arbitration, and applying for compulsory enforcement have the same effect as filing suit. A demand letter alone is weaker: it interrupts the period, but under Article 130 the interruption is treated as never having occurred unless suit, or a step with the same effect such as a payment-order application, follows within six months, so a letter buys time rather than settling the question. An e-mail from the buyer acknowledging the balance, or a part payment, is an acknowledgment and restarts the clock, which is one reason to keep the correspondence.

Interest runs separately. A debt with a fixed due date is in default when the date passes (Article 229), and the creditor may claim default interest at the statutory rate, 5% per year where no rate was agreed (Articles 203 and 233), or at a higher agreed rate.

First step: a certified letter, and a look at the buyer

Before any filing, Taiwanese counsel will usually send a 存證信函, the Chunghwa Post certified letter. The sender prepares identical copies and the post office keeps one for three years from the mailing date as evidence of the content and the date of sending (Postal Handling Rules, Article 34); proof of delivery comes from a return receipt (回執) attached to the registered letter (Article 28). The post office rules require the text to be in Chinese, with foreign words allowed only for names and terms that must be quoted in the original. The letter states the invoices, the amount, the interest, a payment deadline and the steps that will follow; its value is evidentiary, establishing the demand date for interest and the debtor's knowledge for later proceedings.

At the same time, check who the buyer legally is. The Ministry of Economic Affairs runs a public company registry search (商工登記公示資料查詢服務) that shows the registered name, address, capital, responsible person and status of any Taiwanese company. Invoices addressed to a trade name rather than the registered entity, or to a company that has since changed its responsible person or been dissolved, are a common reason enforcement stalls.

The payment order: a court title on paper

Taiwan's payment order (支付命令) is the workhorse for undisputed trade debts. Under Article 508 of the Code of Civil Procedure, a creditor whose claim is for a fixed amount of money, fungible goods or securities may ask the court to issue one. The application goes to the court with jurisdiction over the debtor as defendant (Article 510), which for a company is the court of its principal office (Articles 1 and 2). The application must identify the parties, the claim and its amount, the facts giving rise to it, and ask for the order, and the creditor must make a preliminary showing of the claim (Article 511): the contract or purchase orders, the invoices, shipping documents and the certified letter are the usual exhibits. The court decides without hearing the debtor (Article 512). The filing fee is NT$500 (Article 77-19).

The order tells the debtor to pay the claim and the procedural costs, or to object to the issuing court within twenty days of service, and warns that without an objection the creditor may enforce on the order and a certificate of finality (Article 514). If the order cannot be served within three months, it lapses (Article 515), so the debtor's registered address must be current. A lapsed order also loses its interruption of the limitation period (Civil Code, Article 132), which matters when the deadline is close.

The debtor may object to all or part of the order within the twenty-day period without stating reasons (Article 516). An objection makes the order lapse to that extent, and the application is then treated as a lawsuit or a request for mediation (Article 519); the case continues in court, with the payment-order fee credited toward the litigation costs. Without a timely objection, the order becomes an enforcement title and the court issues a certificate of finality (Article 521).

One change from 2015 matters for creditors. An unopposed payment order is an enforcement title but no longer has the force of a final judgment. The Judicial Yuan's own guidance explains that the debtor may still bring an action to confirm that the debt does not exist, and the court may, at the debtor's request and against security, stay enforcement while that action is pending (Article 521, paragraph 3). In practice this rarely troubles a seller with clean documents, but it means the payment order settles the collection, not the merits.

Freezing assets: provisional attachment

A debtor who receives a payment order has twenty days to move money. Provisional attachment (假扣押) is the answer. Under Article 522, a creditor with a monetary claim who wants to secure future enforcement may apply for it, and the application is often filed before or together with the payment order. Attachment requires a risk that enforcement will later be impossible or very difficult (Article 523), and the creditor must make a preliminary showing of the claim and of that risk, usually facts suggesting the debtor is disposing of assets (Article 526). Where the showing is incomplete, the court may order security and grant the attachment; it may require security even where the showing is sufficient. The amount is set by the court in each case. The filing fee is NT$1,000 (Article 77-19). Once granted, the attachment order is itself an enforcement title for the freezing step (Compulsory Enforcement Act, Article 4), and bank accounts, receivables and real estate are the usual targets.

If the buyer objects: mediation and suit

A contested claim becomes ordinary litigation. For property claims of NT$500,000 or less, Article 403 requires court mediation before suit; larger claims go straight to trial, although the parties may still request mediation (Article 404). A foreign company may sue in Taiwan without a local entity; it needs a Chinese translation of its corporate documents and a power of attorney for Taiwanese counsel, and the court sits where the defendant has its principal office unless the contract chose another court in writing (Article 24). A plaintiff with no domicile, office or place of business in Taiwan may be ordered, on the defendant's application, to post security for litigation costs (Article 96).

If the contract contains an arbitration clause or a US forum clause, the path changes: a US arbitral award is recognized in Taiwan by court ruling, while a US judgment requires a separate enforcement action. Both routes are explained in the firm's columns on enforcing a US arbitral award in Taiwan and enforcing a foreign judgment in Taiwan. For a plain trade debt against a buyer whose assets are in Taiwan, the payment order is usually faster than either.

Enforcement, and what happens when there is nothing to take

With a final payment order, a judgment or an attachment ruling, the creditor applies to the enforcement division of the district court where the assets are. The enforcement court seizes bank balances, garnishes receivables and auctions property. If the debtor has no assets, or enforcement does not cover the debt, Article 27 of the Compulsory Enforcement Act directs the court to issue the creditor a certificate of claim (債權憑證) recording that enforcement may resume when assets are found. The certificate lets the creditor resume enforcement later, but the limitation period restarts and must be interrupted again in time by a new enforcement application (Civil Code, Article 137); the five-year restart in its third paragraph applies only to judgments and titles with the same effect, which an unopposed payment order is not.

Two drafting points for the next order

First, consider a promissory note (本票). Under the Negotiable Instruments Act, a note signed by the buyer for a fixed sum payable unconditionally lets the holder apply for a court ruling and proceed straight to enforcement against the maker (Article 123), without a payment order or a trial. Taiwanese suppliers often ask for one from new buyers; a US exporter can do the same. Second, if the buyer pays by check, note the presentment deadlines: a check drawn abroad and payable in Taiwan must be presented within two months of its date (Article 130), and a dishonored check gives rise to recourse only if the protest steps are taken in time.

For a Taiwan-side assessment, send the contract or purchase orders, the open invoices with due dates, shipping and delivery records, the buyer's registered Chinese name, and any correspondence in which the buyer acknowledged the balance to attorney Wei Tseng (曾雋崴), partner at Hovering International Law Firm (昊鼎國際法律事務所), at wei@hoveringlaw.com.tw. Taipei office: 7F-2, No. 35, Sec. 1, Chengde Rd., Datong Dist., Taipei City 103, Taiwan.

Sources

Sources opened and checked on October 7, 2026 (Taiwan time). Chinese statutory text controls over any English rendering in this column.

• Ministry of Justice, Civil Code (民法): Article 125, Article 127, Article 129, Article 130, Article 132, Article 137, Article 203, Article 229 and Article 233.
• Ministry of Justice, Code of Civil Procedure (民事訴訟法), amended November 29, 2023: Article 1, Article 2, Article 24, Article 96, Article 77-19, Article 403, Article 404, Article 508, Article 510, Article 511, Article 512, Article 514, Article 515, Article 516, Article 519, Article 521, Article 522, Article 523 and Article 526.
• Ministry of Justice, Act Governing the Choice of Law in Civil Matters Involving Foreign Elements (涉外民事法律適用法): Article 20 and Article 36; Postal Handling Rules (郵件處理規則): Article 28 and Article 34.
• Judicial Yuan, FAQ: What is the effect of a payment order? (an unopposed order is an enforcement title without the effect of a final judgment; the debtor may sue to confirm the debt does not exist).
• Ministry of Justice, Compulsory Enforcement Act (強制執行法): Article 4 and Article 27.
• Ministry of Justice, Negotiable Instruments Act (票據法): Article 120, Article 123 and Article 130.
• Chunghwa Post, Frequently asked questions on certified letters (存證信函), on the use of Chinese text.

General information, not individualized legal advice. Sources checked October 7, 2026 (Taiwan time).