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Open a SPV Company in Taiwan

Open a SPV Company in Taiwan

A special purpose vehicle is a company that is created for a specific purpose. Another company may choose to open a SPV company in Taiwan for acquiring and managing a single asset or a group of assets, as well as to limit its exposure to risk, among other business uses and scenarios.

Creating an SPV requires business strategy, structuring planning, as well as assistance from a local team specializing in Taiwan company formation, such as our own experts. Once the foreign company determines the objectives for the special purpose vehicle, our team will assist them with compliance in terms of corporate registration, as well as with all relevant regulations.  

For investors that wish to open a SPV company in Taiwan, our team offers incorporation packages that take into account the needs of the foreign business, as well as the need to potentially act as a local representative, if the foreign business cannot have its own representative in Taiwan for the entire duration of the registration process.

Characteristics of a SPV company in Taiwan

A SPV company in Taiwan is not intended to engage in regular business operations but rather to serve a particular financial function. SPV companies generally have specialized management teams or trustees responsible for overseeing their operations and complying with legal and regulatory requirements.

 Quick Facts  
Authority that oversees SPVs in Taiwan

Financial Supervisory Commission (FSC)

Legal structure for SPV

Limited Liability Company (yǒuxiàn gōngsī)

Minimum share capital

None

Residency requirement to open SPV company

Foreigners are allowed to open a company in Taiwan.

Liability

Investors have no personal liability beyond their investment in the SPV company.

Business taxes

Businesses must pay either value-added tax (VAT) or gross business receipts tax (GBRT);

VAT rate is 5% (standard) or 0% (reduced);

GBRT ranges from 1% to 5%.

Indirect taxes (VAT)

In Brazil, VAT encompasses various indirect taxes with rates between 4% and 25%.

Issuing beneficiary certificates for a securitization

Requires approval from FSC

Registered address

A registered address is required for the company formation.

Documents required to open an SPV

– Articles of Incorporation,

– ID documents of shareholders/directors,

– proof of address, etc.

Minimum shareholders required

1

Uses for an SPV company

– securitization transactions,

– real estate investments,

– raising capital,

– asset lease or sale, etc.

Advantages of opening SPV company in Brazil

– access to the Asia-Pacific market,

– flexible regulatory framework,

– low taxation,

– strong financial sector, etc.

Other applicable taxes

– property transfer tax,

– securities transaction tax

Assistance

Our team can help you open and manage an SPV in Taiwan.

You can also contact us for more questions regarding regular company registration.

For securitization transactions, an SPV company could take the form of a trust or a special purpose company. These entities are structured to isolate risks associated with the assets they hold or the transactions they facilitate from the originating entity or sponsor.

SPV companies in Taiwan are designed to have limited activities and liabilities. The potential financial distress or bankruptcy of the originating entity or sponsor does not impact the assets held by the SPV. This provides greater security to investors by minimizing the risk of bankruptcy related to other business operations.

SPV companies are vehicles for raising capital from investors by issuing securities backed by the assets held by the SPV.  We can help you open a company in Taiwan, based on your financial and business needs.

We invite you to watch a video about this type of company:

Directors’ and officers’ duties

Directors and officers of a SPV company in Taiwan have a fiduciary duty to act in the best interests of the SPV itself. They must make decisions that are in the best interests of the SPV and its stakeholders, including investors, to fulfill the objectives outlined in the SPV’s governing documents.

An SPV is legally and operationally separate from its originator (owner of assets) or any affiliated entities. Directors and officers must ensure that this separation is maintained and that the SPV operates independently. They must also avoid conflicts of interest that may arise between the SPV and its originator or affiliates.  

Most importantly, directors and officers are responsible for ensuring that the SPV company in Taiwan complies with applicable laws, regulations, and governance standards. They must ensure the accuracy of the financial records and meet all the reporting obligations.

If you need to set up a company in Taiwan, we can help you through the entire process.

How to open a SPV company in Taiwan

The special purpose vehicle is generally a limited liability company incorporated as per the Taiwan company registration requirements. A main trait and advantage of this business form is that it is a separate entity from its founder(s).

An important part of the process is to apply for the pre-approval of the business which is required in some cases. This is the reason why we recommend that foreign investors interested in setting up a special purpose vehicle, as well as companies in other business fields, reach out to our local team who can help them open a company in Taiwan.

Below, we briefly outline the main steps needed open a SPV company in Taiwan as a limited company:

  1. Decide on and reserve the company name;
  2. Prepare the documents to receive the approval for the business (you can seek specialized assistance from our team at this point);
  3. Prepare the company’s paid-in capital: two thresholds are possible in this case: less than 500 million TWD and more than 500 million TWD;
  4. Prepare the Articles of Incorporation, as well as other relevant documents such as the shareholder’s agreement, the appointment of the company directors, the identification documents for the shareholders and directors, letter of consent for the lease of the registration address (house lease letter of consent from the landlord), and others;
  5. Pay the registration fee (calculated as a percentage of the authorized capital or a minimum of 1,000 TWD (approx. 31 USD) and register the business.

Doing business in Taiwan

As previously mentioned, special approvals can be required when investors set up a company in Taiwan. The application for the approval of the foreign investment is done with the Department of Investment Review, located in Taipei City.

Depending on the uses of the special purpose vehicle, our team can provide detailed and personalized information about the requirements for the pre-approval of the business, as a first step before you start the process to open a SPV company in Taiwan.

After the registration of the limited company is completed, we remind investors that they will need to be mindful of the following tax compliance requirements for their Taiwan company:

  • The corporate income tax is 20% for annual income exceeding 120,001 TWD, to which a 5% surtax applies on undistributed earnings;
  • No corporate income tax is applied for annual income less than 120,000 TWD;
  • A company is a resident for tax purposes when its head office is located in Taiwan, such as would be the case of a Taiwan-based SPV company;
  • A 21% withholding tax applies to dividend payments made to non-residents; This can be reduced through a tax agreement;
  • Taiwan has entered into approximately 30 double tax agreements; Our team can give you details.

Advantages of opening a SPV company in Taiwan

Opening a SPV company in Taiwan offers several advantages, especially in the context of financial transactions and investment activities.

SPVs help protect main businesses by isolating specific assets within the SPV. By separating different types of assets into separate SPVs, you can manage risks more effectively as risks associated with a particular project won’t affect assets in another SPV.

Investors often prefer diversified portfolios. By creating an SPV with a mix of assets, there is a possibility to attract a broader range of investors.

A SPV company in Taiwan is a strategic way to manage specific assets. You can use them for targeted purposes, such as financing a particular project or managing a set of assets. They provide flexibility in structuring financial arrangements, allowing you to optimize your capital structure and allocate resources efficiently.

Issuing securities backed by assets held by SPVs provides a mechanism for raising capital by turning those assets into tradable financial instruments. This process allows investors to participate in the returns generated by the underlying assets while providing the SPV with access to funding for its operations and investment activities.

We can offer more assistance in Taiwan company formation.

Investment in Taiwan

Investing in Taiwan can offer several opportunities and benefits. Opening a company in Taiwan can be beneficial for some investors, as demonstrated by the following statistics:

  • Just in January of 2024, Foreign Direct Investment (FDI) in Taiwan saw a significant increase of 684.32 million US dollars;
  • In the third quarter of 2023, Taiwan recorded a surplus of 26.609 billion US dollars in its capital and financial account;
  • Taiwan’s current account surplus widened to 34.84 billion US dollars in the fourth quarter of 2023.

Opening a special purpose vehicle company can be a suitable risk reduction strategy and, for certain international businesses, the decision to open a SPV company in Taiwan can be a strategic one.

Contact our team if you are ready to start the process for company registration in Taiwan.