Taiwan Government change regulation of manager's work pemit

[ichbinjenny]

Fabulous. Thanks!

[bobbyanalog]

are there ways to get around these revenue requirements?...I mean it's revenue, so one very large thin margin sale could get you though if if it came down to it, right?

[Lord Lucan]

It's all well and good for people to state that 3m NT is not a lot of money, but the important point is the high chance of failure in the first year. Hey, if the glib responders in this thread saying "3m NT is nothing" can turn NT$500k into NT$3m in one year in a brand new business that's great. Very few people can. And if they think that it's acceptable to put investment at risk under these terms (make 6x your capital in 12 months or have your business shut down) then they have a huge appetite for risk. Many people don't. I do, actually, and that's why I'm going to go ahead with it anyway. There is no question in my mind, however, that from a businessman's perspective this regulation is simply absurd, and another case of the Taiwanese government saying "look, we are open for investment" when actually they're not really.

In any case, you don't have to make 3m, you just have to pay tax on 3m. Any decent accountant can file a tax return for as many millions as you care to submit, and you'll pay tax on that, regardless of how much money you actually make.

Totally agree that the Taiwanese "government" is not interested in SMEs of any description, local or foreign. The entire country is run for the benefit of around 200 rich families, so I fully expect the government to screw me, just as it screws the small Taiwanese businessman next door whilst selling the country down the river to make a few old plutocrats even richer. Plus ca change, plus c'est la meme chose and all that. <insert Gallic shrug>

The key is to get a decent accountant and play the government at their own game.

[headhonchoII]

I agree with you, it's a high number for SMEs. You'd have to look at regulations in open trading companies like Hong Kong or Ireland to check how it stacks up. I also agree with the 200 family comment. Still Taiwan is a very good place for SMEs in my humble opinion. First it's cut the corporation tax to 17% this year. Second they are not too rigorous with checking tax returns, usually. Third they don't change regulations every month like China. Fourth it's a lower corporate tax rate than China (25% sp?) so you could base here and with ECFA possibly get a better deal than being based there. Fifth you won't get arrested doing sensitive surveys or if a government contract goes wrong like in China. Sixth people here work hard and will work overtime for free (not good for society but good for business), plus they are used to turning around business within 1 day. Seventh (should have dot points I know) the customs doesn't hold up imports/exports for weeks/months during national holidays or everytime there is a political congress. Eighth there is a huge pool of existing SMEs you can leverage and work with to build your brand and most of them these days are interested in long-term business and do quality stuff. 9th income tax for employees/managers is 20-25% in China, they also have minimum reportable income and it MUST go up every year to get your work permit renewed. Tenth Taiwan's transport links with China and Asia are rapidly improving, making it a more attractive place to base from.

Taiwan is light years ahead of China as a place to do business, from my dealings with both countries.

So yeah, 3 million NTD in the first year requirement is a bit steep to get an ARC, but get past that and your laughing. How do you get past it, just like everything else in Taiwan- 'mei ge zheng ce you dui ce'

[llary]

Sorry Lord Lucan, but you are missing the point.

What you are asking of the Taiwan government is not just permission to form a company (which can now be done with almost zero capital) but permission to reside in Taiwan based on the promise of investment. What the Taiwan government is asking you - in a very roundabout way - is: "what's in it for me?"

Say you are an angel investor. Someone approaches you and says they have this great idea but they have no sales yet, the business is not proven and they only have around $500 in personal assets. Now unless that idea is pretty damn groundbreaking you are going to tell them where to stick it.

If it was possible to get a no-strings ARC just by declaring yourself in business, don't you think every bum this side of China would be jumping on the visa gravy train with another Bob's Extremely Genuine Turkey Parts Inc.? Like any other country Taiwan needs some kind of barrier to entry.

I'm sorry you are bitter but many people here have offered a lot of free advice that you ignored in the hope of a quick fix from a CPA (for example about how much capital is required to get a work permit or investor ARC). We have also discussed various loopholes and workarounds to get a foot into the country before you manage to build up something bigger.

[guillaumimoso]

Hello all,

I'm new to this forum, and I'd like some information about working in Taiwan.
First, a few words about my situation.

I'm a French citizen, owner of a private limited company in Singapore. I am a freelance translator/interpreter.
The reason why I'm considering going to Taiwan is because I'd like to continue learning Chinese (Singapore is not a good environment for that).

From what I gather in this discussion, I would have several options.

1. Close my business in Singapore and open a new one in Taiwan.
However, with the NT$500,000 requirement for year 1, and NT$3,000,000 for the subsequent years, I'm not sure that would be a good option for me (as previously mentioned, that is feasible for larger companies, not for one-man shows like me).

2. Set up a branch office of my Singapore-based business in Taiwan.
That would be interesting, since I think there's a double-taxation agreement between Singapore and Taiwan. However, does that allow me to get a work permit?
Would I also be eligible for permanent residency after 5 years of doing that? It all depends on whether I like it enough in Taiwan to stay permanently, but who knows? Better to plan ahead. ;-)

3. Given I want to study Chinese, I could stay on a student visa, and work on the side. Translation is an internet-based business, and I wouldn't be called for interpreting jobs in Taiwan, as I don't have Chinese in my working languages (I would do that overseas). Thing is, technically, I'm working in Taiwan without a work permit, so I guess it's illegal, even though I can keep a low profile, but... I'm not very comfortable with that idea. Plus, I guess I can't get the PR status after being a student?

Llary seems to be the expert in these matters. Would greatly appreciate if you could give me your insight on this.

Thanks all!
Guillaume

[llary]

I am no expert, I just happen to have set up many companies in Taiwan and around the world without using CPAs so I know how it works behind the scenes. My advice is worth exactly what you are paying for it. With that said..

2. Set up a branch office of my Singapore-based business in Taiwan.
That would be interesting, since I think there's a double-taxation agreement between Singapore and Taiwan. However, does that allow me to get a work permit?
Would I also be eligible for permanent residency after 5 years of doing that? It all depends on whether I like it enough in Taiwan to stay permanently, but who knows? Better to plan ahead. ;-)

Depending on what you are doing you might not even need a branch office. A branch office is good because you get the benefit of an ARC with no minimum capital or earnings, but you can issue invoices and generally make sales as a normal Taiwanese company. The tax rate is also attractive.

If you are strictly selling outside Taiwan then you can just get an ARC through a rep. office from your Singapore company. You will not be able to legally make any sales here.

Either of these ways will make you eligible for PR or citizenship.

3. Given I want to study Chinese, I could stay on a student visa, and work on the side. Translation is an internet-based business, and I wouldn't be called for interpreting jobs in Taiwan, as I don't have Chinese in my working languages (I would do that overseas). Thing is, technically, I'm working in Taiwan without a work permit, so I guess it's illegal, even though I can keep a low profile, but... I'm not very comfortable with that idea. Plus, I guess I can't get the PR status after being a student?

I considered that option way back when but rejected it because I knew I would eventually want citizenship and time on a student ARC does not count. If that's not important for you and you are selling a service to companies outside Taiwan then it would be extremely unlikely that you encounter any trouble. Mainly you should be worried if you are earning a high income and not paying tax.

[guillaumimoso]

Hi Llary!

Thanks for your quick reply!

Indeed, I don't intend to work for Taiwan-based companies. The way it works for me is that I already have my clients, who are in Europe and in Singapore, and that's all. For interpreting, I will contact overseas agencies who are interested in European languages, so I guess that excludes Taiwanese companies, who, understandably, will focus on the Chinese-English (or Japanese, Korean, etc.) market. So a rep office would indeed work.

However, don't I have to exit the country every two months to renew my visa? Or do I get a 1 year ARC with a rep office? I understand I won't be needing/getting a work permit for a rep office, so I'm not sure how long I can stay in the country with that status.

For the branch office scenario, I might need it one day, when I become so proficient in Chinese that I can interpret for high level government/company meetings between France and Taiwan (yeah right!)... In that case, I might need to work with Taiwan-based companies.
But in that case, do I need to deposit money, on the lines of NT$500k and NT$3m for the 1st year and subsequent ones? Or do they give me a work permit without those requirements? If there are no capital or earnings requirements to get a work permit for a branch office, then it's indeed a very interesting path.
But somehow, I feel that it's not in the interest of Taiwan to welcome people like that. It would be like saying, ok laowai, you can set up a company anywhere and get a work permit through your branch office more easily than by setting up a Taiwanese company. Not sure if that works out like that...

Any thoughts are welcome!
Thanks

[guillaumimoso]

Anyone?