As a general definition, holding companies are legal entities which do not have any operations, activities or other active businesses. Instead, they own assets, which can be shares of stock in other companies, private equity funds, hedge funds, publicly traded shares, bonds, real estate and so on. As follows, our company formation agents in Taiwan explain a few aspects related to holding companies in Taiwan.
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Taxation for holding companies in Taiwan
The withholding tax on dividends paid to non-residents of this country in case there is a not a tax treaty agreement with that particular jurisdiction is 20%. If there is a tax treaty agreement with the country from which the receiver of the dividends comes from, this withholding tax is between 5% to 15%.
The rate of the withholding tax paid on interest to non-residents of Taiwan in case there is not a tax treaty agreement with that jurisdiction is of 20%. If there is a tax treaty agreement, this tax is of 7% to 15%.
Joint taxation is available in Taiwan for groups only for financial holding companies. All group companies with holdings of more than 90% are taxed with the joint taxation if the tax grouping is selected.
The taxable income and loss of the company can be offset with each other. Our Taiwan company formation consultants can provide more information on this matter. We can also assist entrepreneursopen a holding company in Taiwan.
Besides what has been mentioned above, there is no other significant tax benefit under a tax grouping.
Advantages of holding companies in Taiwan
The main advantages of a holding company in Taiwan are:
- Tax minimization: benefiting from tax exemptions is the main reason to set up a holding company in this jurisdiction. Our Taiwan company registration advisors can offer more information on what these tax benefits of a holding company in this country may consist of;
- Asset protection: a holding company enables its shareholders to own a wide range of overseas assets while protecting them from each other. In case one of the subsidiaries incur any liabilities or debts, the other assets are not affected, since they are separate legal entities;
- Confidentiality: the owners of such companies do not have to be disclosed.
If you need to know more about setting up a holding company in Taiwan, or for assistance to set up a company in Taiwan, please feel free to contact us.