Establishing a company in Taiwan is an attractive option for many global entrepreneurs thanks to the island’s strategic location, robust supply chain, and business-friendly environment. However, the actual process of setting up a company can involve unexpected delays and hurdles—especially when it comes to banking and compliance procedures.
This article highlights three real-world cases that showcase the potential obstacles foreign investors may encounter during Taiwan company formation. Each example demonstrates how banking procedures, documentation mismatches, and regulatory requirements can slow down progress if not addressed early.
Case 1: Remittance Delays Due to a Missing Middle Name
One foreign investor completed the required investment approval process and initiated a wire transfer of operating capital to Taiwan. However, a discrepancy arose: the sender’s name on the bank transfer did not fully match the name listed on the passport and the official investment approval letter. Specifically, the middle name was missing.
For Taiwanese banks, name consistency across all legal and financial documents is essential. The mismatch triggered a compliance review, and the bank required the investor to provide a formal declaration. The document had to confirm:
- That the transferor and the remittance account holder, despite the missing middle name, were in fact the same person.
- That the investor assumed full responsibility should any disputes, duplicate claims, or repayment obligations arise in the future.
This additional step caused delays in releasing the operating funds to the preparatory bank account in Taiwan.
Key Takeaway:
Foreign investors should always ensure that the sender’s name in a bank transfer matches exactly with the full legal name shown on passports and official investment documents. Even a missing middle name can create compliance complications and delay the capitalization process.
Case 2: Corporate Shareholder Funds Blocked by the Investor’s Home Country Bank
Another case involved a corporate shareholder attempting to transfer its subscribed capital to Taiwan. The typical sequence of Taiwan company setup is as follows:
- Reserve company name.
- Obtain foreign investment approval.
- Open a preparatory bank account in Taiwan.
- Transfer operating capital into the preparatory account.
- Complete company registration after capital verification.
In this case, the shareholder’s bank refused to release the funds without proof of the Taiwan company’s official registration documents. Unfortunately, such documents are only issued after the capital injection has been verified and the company is legally registered.
This created a procedural deadlock: Taiwan requires funds to be transferred before company registration, but the home country’s bank required company registration before releasing the funds. The result was a delay of more than one year, during which the shareholder had to repeatedly negotiate with their local bank.
Key Takeaway:
For investors from countries where banking rules may conflict with Taiwan’s company setup procedure, it is crucial to communicate with the home country’s bank well in advance. Clarifying the procedural differences and obtaining written confirmation about required documents can prevent long delays.
Case 3: Difficulty Opening a Preparatory Bank Account in Taiwan
A third challenge frequently faced by foreign investors is opening the preparatory (temporary) bank account required before injecting capital. Although an investor may have already obtained name reservation approval and the investment approval letter from the Ministry of Economic Affairs, banks in Taiwan are not obligated to open such accounts.
In recent years, banks have tightened their due diligence standards. Some branches now require:
- That the foreign investor already holds a valid Taiwan Alien Resident Certificate (ARC).
- That the investor has previously opened a personal account at the same bank and maintained a transaction history for at least one year.
For newcomers without residency status or prior banking relationships, these requirements are extremely difficult to meet. As a result, investors can become stuck at this stage, unable to inject their funds and move forward with company registration.
Key Takeaway:
Foreign entrepreneurs planning to establish a company in Taiwan should carefully select banks that are still open to providing preparatory account services for foreign investors. Engaging a local consultant or service provider who already has experience liaising with specific banks can significantly increase the chances of success.
Lessons Learned and Best Practices for Foreign Investors
These three cases highlight the reality that, while Taiwan’s investment environment is relatively transparent, banking compliance and cross-border documentation can create unexpected barriers. To minimize risk and avoid long delays, foreign investors should keep the following best practices in mind:
- Ensure Consistency Across All Documents
– Verify that the names on passports, investment approval letters, and remittance accounts match exactly. Pay attention to middle names, initials, and spelling. - Communicate with Home Country Banks in Advance
– Before starting the Taiwan incorporation process, confirm with your bank what documents will be required for outbound remittances. This is especially critical for corporate shareholders. - Plan for Bank Account Opening Challenges
– Not all banks in Taiwan offer preparatory account services to new foreign investors. Partnering with an experienced local advisor can help identify suitable banks and smooth the account-opening process. - Prepare for Delays
– Even when everything is properly arranged, cross-border transactions can face delays due to international compliance reviews. Allow sufficient time in your project timeline to accommodate potential setbacks.
Conclusion
Setting up a company in Taiwan remains a viable and attractive option for foreign entrepreneurs seeking access to the island’s strategic location and dynamic market. However, practical challenges—such as mismatched remittance names, conflicts with home country banking rules, and tightened preparatory account requirements—can slow down the process significantly.
By learning from real-world cases and preparing in advance, investors can reduce risks, streamline their company setup, and bring their business operations in Taiwan to life without unnecessary delays.