Taiwan has become an increasingly attractive destination for Indian entrepreneurs and corporations looking to expand their business operations across Asia. With its strong technology ecosystem, strategic location, and favorable investment climate, establishing a Taiwan company offers significant opportunities for growth. However, when it comes to capital injection from India to Taiwan, many Indian parent companies and individual shareholders encounter procedural and regulatory hurdles that require careful preparation and expert guidance.
In this article, we will explain the key challenges Indian investors face during the Taiwan company formation and capital remittance process, the relevant documentation and compliance requirements, and practical recommendations to ensure a smooth capital injection process.
Step-by-Step Overview of Taiwan Company Incorporation
The process of registering a company in Taiwan typically takes around 2.5 to 3 months from the time all required documents are provided. One of the most important legal documents needed for company registration is the Power of Attorney (POA), which must be duly notarized and legalized by the Taiwan Representative Office in India.
Document Legalization and Power of Attorney
Before the company can be officially registered, the Indian investor—whether a corporate entity or an individual—must prepare and authenticate the POA document. This process involves:
- Notarization in India: The POA should first be notarized by an authorized notary public.
- Legalization by the Taiwan Representative Office: After notarization, the document must be legalized at the Taiwan Representative Office in India.
Once all documents are duly legalized, they can be used to proceed with the company name reservation, foreign investment approval, and bank account setup in Taiwan.
Capital Injection Requirements and Common Challenges
The most complex part of setting up a Taiwan company for Indian investors often arises during the capital injection phase. Taiwan’s company law requires that foreign shareholders deposit the full capital amount into a designated preparatory (pre-incorporation) bank account before the company can be formally registered.
For Indian investors, this transfer can be complicated due to India’s foreign exchange control regulations under the Reserve Bank of India (RBI) and the Overseas Direct Investment (ODI) framework.
1. Regulatory Restrictions on Overseas Direct Investment (ODI)
When an Indian parent company or shareholder sends capital abroad to invest in a Taiwan company, it is considered an Overseas Direct Investment (ODI). According to the RBI Master Direction on ODI, Indian entities must ensure that:
- The investment complies with RBI approval thresholds and sectoral limits.
- Proper documentation is filed with the Authorized Dealer (AD) Bank handling the remittance.
- All required forms—such as Form ODI—are submitted before or during the transaction.
This process can delay the capital injection timeline, especially when Indian banks have limited experience handling remittances to Taiwan.
2. Banking and Documentation Requirements
Based on our past experience with Indian clients, some Indian banks require extensive verification before allowing capital remittance to a Taiwan entity. The following documents are usually requested by the bank to process the transfer:
- Certificate of Incorporation of the foreign (Taiwan) entity
- Memorandum and Articles of Association (MOA & AOA) of the Taiwan company
- Confirmation or draft of the shareholding structure
- Board resolution authorizing the overseas investment
- Declaration of ODI compliance
The challenge here is that the Taiwan company does not yet exist at the capital injection stage. Since the competent government authority for company registration in Taiwan only issues a company registration certificate after the capital injection is completed, the Indian investor cannot provide official registration proof beforehand. This creates a temporary gap that Indian banks may find difficult to process without additional clarification.
3. Delays Due to Cross-Border Compliance
Because both India and Taiwan have strict foreign exchange reporting systems, it is common for investors to experience delays during capital transfer verification. Even a minor mismatch in company name formatting or document wording can cause remittance rejections. Therefore, advance coordination between the Taiwan consultant, the Indian investor, and the local Indian bank is essential to ensure all documentation aligns with both jurisdictions’ requirements.
Recommendations for a Smooth Capital Injection
To minimize delays and ensure a successful capital injection, Indian companies and shareholders should take the following proactive steps:
- Consult with Your Bank in Advance:
Before initiating any transfer, confirm with your bank’s international remittance or corporate banking department whether they support transactions to Taiwan and what documentation is required for ODI compliance. - Prepare All Required Documentation Early:
Gather all corporate documents—Certificate of Incorporation, MOA, AOA, board resolutions, and shareholder declarations—in advance. Having a clear shareholding structure can help banks process the ODI application faster. - Ensure Accurate Legalization of the POA:
Proper notarization and legalization of the POA document in India are crucial. Errors in signatures, stamps, or wording may cause the Taiwan MOEA to reject the application. - Allow Adequate Time for Approval:
Since Taiwan’s approval process involves multiple stages (investment approval, capital verification, and company registration), plan for at least 2.5 to 3 months to complete the full incorporation. - Work with an Experienced Service Provider:
A professional Taiwan business consultant can coordinate document review, communication with the local bank, and submission to authorities—significantly reducing delays caused by procedural misunderstandings.
How Premia TNC Can Help
Setting up a Taiwan company as an Indian investor offers tremendous potential for regional growth, especially in industries such as IT services, manufacturing, trading, and technology development. However, navigating the capital injection process requires a solid understanding of both Indian ODI regulations and Taiwan’s foreign investment procedures.
By preparing documentation early, maintaining transparent communication with your bank, and seeking expert local assistance, Indian parent companies and individual shareholders can successfully complete their capital remittance and incorporation process without unnecessary delays.
At Premia TNC Taiwan, we specialize in assisting foreign investors—including clients from India—with every step of Taiwan company formation, from document preparation and investment approval to bank account setup and capital verification. Our goal is to simplify the process, minimize regulatory challenges, and help you establish your Taiwan business with full compliance and confidence.