How to Register a Business in the US from Taiwan

Step 1: Benefits of starting your US business from Taiwan

Starting a US business from Taiwan offers a unique blend of opportunities and advantages. For one, Taiwan's robust technological infrastructure and highly skilled workforce provide an excellent foundation for innovative business ventures. Entrepreneurs can leverage the expertise available in Taiwan to develop cutting-edge products and services, which can then be marketed and sold in the expansive US market. Furthermore, Taiwan's favorable business environment, marked by ease of doing business and supportive government policies, simplifies the initial steps of business formation, allowing entrepreneurs to focus on growth and development.

Moreover, the cultural and geographical proximity to major Asian markets gives Taiwanese businesses a strategic edge. By establishing a US business, Taiwanese entrepreneurs can not only access the lucrative American market but also position themselves effectively for international expansion. This dual-market approach maximizes revenue potential and mitigates risk. Additionally, the Taiwan-US relationship, characterized by strong economic and trade ties, provides a stable and supportive backdrop for business endeavors, making it an ideal launchpad for global aspirations.

Step 2: How to start your US business from Taiwan

Starting a US business from Taiwan can be a rewarding endeavor, and it involves several steps that need to be carefully followed. Firstly, it is essential to develop a robust business plan that outlines your business model, target market, and financial projections. This plan will serve as a blueprint for your business and is critical for securing financing and attracting investors. Consider consulting with a legal advisor or a business consultant who is familiar with both US and Taiwanese regulations to ensure compliance and to navigate the complexities of international business formation.

Next, you need to choose the right business structure for your US operations. Common options include a limited liability company (LLC), corporation, or partnership. Each structure has its own advantages and tax implications, so it is vital to select the one that best suits your business needs. Once you have decided on your business structure, you will need to register your business with the relevant state authorities in the US. This typically involves filing formation documents and paying a fee. Additionally, obtaining an Employer Identification Number (EIN) from the Internal Revenue Service (IRS) is necessary for tax purposes. Ensuring proper compliance with US business laws and securing any necessary licenses and permits will help set a solid foundation for your new venture.

Step 3: Opening a Business Bank Account

A business bank account is a separate account that is used exclusively for business transactions. But why is it important to open a business bank account?

Keeping your personal and business finances separate is crucial. A dedicated business bank account allows you to do just that, making it much easier to track your business’s income and expenses. This clear separation translates to simpler tax reporting come tax season.

But the benefits go beyond bookkeeping. Having a separate account can provide legal protection. It establishes your business as a distinct entity from yourself. In the unfortunate event of a lawsuit or bankruptcy, this separation can help shield your personal assets from business liabilities.

Furthermore, a business bank account can boost your credibility and project professionalism.

It demonstrates to clients and vendors that you take your business seriously and are committed to maintaining accurate financial records. This can be especially important in establishing trust with potential partners.

Finally, a business bank account is essential for accepting payments, even if you utilize a merchant account. Whether you use doola or another service, funneling those customer funds into a dedicated business account is necessary.

doola partners with banks that allow you to open a bank account remotely from anywhere in the world, like Mercury. Shop around and compare different banks’ fees and services.

Look for a bank that offers the features you need, such as online banking, mobile banking, or overdraft protection.

You may also want to consider working with a bank that specializes in small business banking.

Step 4: Understanding Your Compliance Requirements in Taiwan

Understanding Compliance Requirements for Running a US Business in Taiwan

Expanding your business to Taiwan can be a lucrative opportunity, but it’s crucial to understand compliance requirements to ensure smooth operations. Here are several key considerations:

1. Business Registration

All foreign businesses must register with the Taiwanese government. This involves:

• Choosing a suitable business structure (e.g., subsidiary, branch).
• Registering with the Ministry of Economic Affairs (MOEA).
• Obtaining necessary permits and licenses based on the business type.

2. Taxation

Understanding Taiwan’s tax regime is vital. Key points include:

• Corporate income tax rates and potential tax incentives.
• Value Added Tax (VAT) compliance for goods and services.
• Withholding taxes on dividends, interest, and royalties.
• Filing and reporting requirements, including annual tax returns.

3. Employment Laws

Complying with Taiwanese labor laws includes:

• Ensuring fair labor practices, such as working hours and overtime pay.
• Understanding employee benefits, including health insurance and retirement plans.
• Adhering to rules on employment contracts and termination procedures.

4. Intellectual Property

Protecting your intellectual property (IP) is essential. Consider:

• Registering trademarks, patents, and copyrights in Taiwan.
• Understanding the enforcement of IP laws to prevent infringement.

5. Data Protection

Complying with data protection regulations is crucial as well. Key points are:

• Adhering to Taiwan’s Personal Data Protection Act (PDPA).
• Implementing robust data security measures to protect customer information.

6. Market Entry and Strategy

Developing a successful market entry plan includes:

• Conducting thorough market research and understanding local demand.
• Considering cultural nuances in marketing and business operations.
• Building partnerships with local businesses and stakeholders.

By paying close attention to these key areas, US businesses can navigate the complexities of Taiwanese compliance requirements and thrive in this dynamic market.

doola offers a Total Compliance package, including bookkeeping services, to help you stay on top of your compliance requirements. This ensures your business operates smoothly and adheres to all legal and regulatory standards.

Step 5: Understanding Your Tax Obligations in Taiwan

Understanding Tax Obligations for Running a US Business in Taiwan

Operating a US business in Taiwan comes with a unique set of tax obligations and considerations. Navigating these complexities is crucial for ensuring compliance and optimizing the financial health of your business. Below are the key considerations to keep in mind:

1. Business Structure

The structure of your business can significantly impact your tax responsibilities. Common structures include:

• Branch Office: This structure is an extension of your US business and is subject to Taiwan's corporate income tax (CIT) as well as repatriation tax on profits sent back to the US.
• Subsidiary: A separate legal entity in Taiwan, this structure also incurs CIT and may benefit from Taiwan's tax treaties with other countries.
• Representative Office: This setup is primarily for non-commercial activities and is usually exempt from CIT, depending on its scope of activities.

2. Corporate Income Tax

Corporate income tax (CIT) in Taiwan is currently 20%. US businesses operating in Taiwan must file annual tax returns and are subject to this rate on their taxable income generated within Taiwan.

3. Transfer Pricing

US businesses must adhere to Taiwan's transfer pricing rules to ensure that transactions between related entities are conducted at arm's length. This involves rigorous documentation and potential adjustments to taxable income if prices deviate from market rates.

4. Withholding Tax

Taiwan imposes withholding tax on certain types of income, such as dividends, royalties, and interest paid to non-residents. The standard rate is 20%, but this may be reduced under applicable tax treaties.

5. Value Added Tax (VAT)

VAT in Taiwan is currently 5%. US businesses involved in the sale of goods or services in Taiwan need to register for VAT and submit periodic VAT returns.

6. Employment Taxes

Employers in Taiwan are responsible for withholding income taxes from their employees' wages and contributing to social insurance programs, including labor insurance and national health insurance.

7. Tax Treaty Benefits

Taiwan has entered into tax treaties with several countries to avoid double taxation. These treaties often provide preferential rates or exemptions on certain types of income such as dividends, interest, and royalties. It's essential to review these treaties to optimize your tax position.

8. Filing and Payment Deadlines

Staying aware of key filing deadlines is crucial. In Taiwan:

• CIT Returns: Due by the end of May following the tax year.
• VAT Returns: Generally filed bi-monthly.
• Employment Taxes: Withheld and paid monthly.

Understanding these tax obligations is fundamental for the success of your US business in Taiwan. Consulting with a tax professional who is well-versed in both US and Taiwanese tax laws can provide valuable guidance and help ensure compliance.

It’s a good idea to consult with a tax professional or an accountant (or to hire these roles in-house) to make sure you’re not missing anything.

doola's Total Compliance package can handle your tax filings for you, ensuring you remain compliant with federal, state, and local tax requirements.

Step 6: How doola Can Assist

doola simplifies the incorporation and setup process for your company, ensuring you’re ready to charge customers, hire your team, and raise funds as quickly as possible.

Fill out your company details in the doola form in less than 10 minutes. Then, we’ll incorporate your company in any of the 50 US states, get your IRS tax ID (EIN) for you, and file your 83(b) tax election if needed. 

doola can also help you open a bank account and start accepting payments even before the IRS assigns your tax ID.

doola founders also gain access to exclusive discounts at leading software partners, one-click onboarding with select partners, and free CPA consultations.

The doola Application

It takes less than 10 minutes to fill out the details of your new company. You’ll choose your company structure (C corporation, limited liability company) and pick a company name.

Our instant company name checker will let you know if it’s available before you submit your application. You’ll add an address and phone number and review and sign your EIN SS4 letter in one click.

Forming the Company

doola will review your application and file your formation documents in the state within one business day. doola charges $297 for our Starter Plan and your first year of registered agent services (a state compliance requirement), and $297 each year thereafter to maintain your registered agent. 

You can also opt for our Total Compliance plan.

Getting Your IRS Tax ID (EIN)

After your formation in the state is complete, doola will file for your company’s IRS tax ID. Founders who provide a US Social Security number, US address, and US phone are eligible for expedited processing. All other users will receive standard processing. 

For standard orders, doola will fax your form SS4 to the IRS and then call the IRS to retrieve the EIN for you to expedite the process if we can, using real-time IRS data to determine when your filing is likely to be available.

Filing Your 83(b) Tax Election

Many startup founders choose to file an 83(b) tax election to potentially save on future personal taxes. doola can file and mail your 83(b) tax election in one click for both US and non-US founders — no trip to the post office required.

We’ll file it using USPS Certified Mail with tracking, and you’ll get a copy of your signed 83(b) election and proof of filing in your Dashboard.

Partner Perks and Discounts

doola partners with a range of third-party tools to offer special pricing or access to founders. We offer discounts on engineering, tax and finance, compliance, and operations tools, including Amazon Web Services.

doola also partners with Mercury to provide faster, automatic onboarding using your doola company information so you can get ready to bank and fundraise even faster.

Founders may also access discounts on other doola products, including up to one year of free credits toward payment processing.

Read our guides for startup founders, or learn more about doola and how we can help you set up your new business quickly and easily.

Turn your entrepreneurship dream into reality today!

We do our best to provide accurate and up to date information, however the information provided here are just guidelines. Please speak with a tax and compliance professional in your country