Buying a foreign business is an important step, which requires a balanced approach. Do not rush, but rather find out more information about the legal subtleties of a foreign country, otherwise, you may encounter surprises. In this article, we will analyze transactions for acquiring a business in Taiwan and what features of this jurisdiction you have to deal with when you make a decision to buy a company or assets in Taiwan.
Buying a business in Taiwan is a great idea, and here's why. The economic advantages of doing business in Taiwan are provided by a competitive corporate tax rate, the absence of a minimum capital requirement for registering a company, the high authority of local business partners, a sufficiently large domestic market, and the island’s territorial location in the center of global logistics routes.
The most investment-attractive sectors of Taiwan's economy are tourism, logistics, banking, infrastructure, and high technology. You can choose what you like.
Taiwan is also an ideal springboard for entering China. With close markets and strong cultural ties, this jurisdiction is a great place to test new products and find useful business contacts. Taiwan has entered into various double tax treaties with several countries.
Taiwanese legislation is very transparent, most of the procedures required to establish a company can be completed on the Internet.
Recently, Taiwan authorities have taken steps to reduce the time required to register a company. On average, the process takes 10 days, but a foreign entrepreneur needs four to eight weeks to get all the permits.
The registration procedure includes just a few stages:
- Submit an online application to search for a company name, apply for registration of a legal entity and tax registration, obtain insurance, draw up a pension plan and approve the rules for organizing the labor process in the Labor Council. The submitted applications will be considered within just 7 days.
- Make a company seal - 1 day.
- Submit an audit report - 2 days.
In Taiwan, the requirements for the mandatory availability of minimum capital have been abolished. However, a capital audit is required by a certified accountant, therefore, the company is obliged to submit an audit report that would indicate that the founders' investment capital covers the costs of opening a company in Taiwan.
Private M&A deals in Taiwan
The M&A transaction procedure in Taiwan may turn out to be a bit more lengthy. This is due to the due diligence of the company and negotiations on pricing, which are mandatory. Obtaining regulatory approval may also delay the transaction. Further, the stage of buying shares, as a rule, occurs much faster, since this requires only to transfer the shares to the buyer.
To merge and exchange shares in Taiwan, the target company needs to convene a shareholders meeting. This can take a lot of time.
After acquiring a business in Taiwan, it is necessary to update company data in the appropriate authority, as well as inform the general public about the change in the structure or management of the company.Buying company assets in Taiwan
Normally, when a buyer wishes to acquire only a specific asset of a company, he seeks to exclude other assets or liabilities from the transaction. The actual transfer of these assets may be subject to further approvals and procedures, especially in cases where employment contracts with the employees are transferred with the company.
Any assets or liabilities that have not been transferred to the buyer remain with the seller. The transfer of company assets in Taiwan, such as real estate, vehicles, and especially intellectual property, requires special registrations with the appropriate authority.
It is worth considering one nuance: Taiwanese companies are not allowed to provide loans to shareholders of the company or any other person.
If you are considering buying a business or company stock in Taiwan, our experienced IQ Decision UK specialists will provide legal support. We will be able to clarify all the details of transactions for the sale of companies on the island of Taiwan in the course of an individual legal consultation. You can sign up for a consultation using the form below or by contacting us in any other convenient way.