5 Common Pitfalls Foreign Companies Face When Expanding into Taiwan
— Practical Insights on Setup, Tax, and Business Culture —
Taiwan has become one of Asia’s most attractive markets for global expansion.
Its proximity, stability, and skilled workforce make it appealing—but once the process starts, many companies face unexpected hurdles in registration, banking, taxation, labor, and communication.
Here are five key pitfalls to avoid when entering Taiwan.
① Unclear Legal Structure
Choosing between a subsidiary, branch, or representative office affects your tax, liability, and operational scope.
A representative office cannot issue invoices or sign contracts, often requiring re-registration later.
💡 Tip: Define your business model and capital flow before selecting an entity.
② Challenging Bank Account Setup
Bank account screening for foreign companies is strict and inconsistent.
Requirements vary by bank and branch, and non-resident directors often face extra verification.
💡 Tip: Research banks’ foreign-business policies and prepare bilingual documents in advance.
③ Tax and Accounting Gaps
Taiwan’s tax and accounting rules differ from most countries.
Expense treatment, withholding tax, and e-invoice regulations require local adaptation.
💡 Tip: Use software compatible with Taiwan’s tax system and work with a bilingual accounting advisor.
④ Labor Compliance Risks
Employers must register labor and health insurance and follow strict working-hour and termination rules.
Non-compliance may lead to penalties.
💡 Tip: Understand basic labor laws or engage a local HR consultant.
⑤ Cultural and Communication Differences
Trust often precedes contracts in Taiwan.
Flexibility and relationship-building are key to successful partnerships.
💡 Tip: Work with local partners who understand both cultures.
💬 Conclusion
Expanding into Taiwan isn’t just about procedures—it’s about understanding systems and people.
With the right support, foreign companies can build sustainable, trusted operations.
Taiwan Connect provides one-stop, multilingual support for company setup, taxation, visas, and HR compliance—helping global businesses establish and grow with confidence.
