Taiwan is a country that’s very much on the sidelines when it comes to investment immigration.
Despite many of its merits, such as its highly-skilled workforce, a huge internal market, a well-respected foreign investment environment, and multiple Taiwanese visa options, not many investors look its way for residence.
Why is that?
One reason could be Taiwan’s close proximity to China. Even though Taiwan has virtually all the features of a sovereign state, it’s international status is convoluted.
Additionally, many high-net-worth individuals might be wary of the language barrier and the standard of living in Taiwan.
Yet, as Nomad Capitalist’s Andrew Henderson recently told Fox Business, it’s the people who ignore the naysayers and dare to make bold international moves who reap the biggest rewards, both personally and financially.
In fact, you’d be surprised just how comfortable your life in Taiwan could be.
And even if you don’t plan to live there full-time, the world’s 20th biggest economy has a plethora of opportunities for entrepreneurs and investors alike.
So, what could this ‘breakaway Chinese province’ hold in store for you, the international investor seeking residence?
In this article, we will delve into Taiwan’s economy, give you all the details about the various Taiwanese visas available to investors and entrepreneurs, and weigh up the pros and cons of residence in Taiwan.
It should give you a good idea of whether Taiwan could be a smart financial and personal move for you.
Plus, you can always enlist the help of the Nomad Capitalist team to devise a holistic plan to see where and how Taiwan fits in. Get in touch today.
Before we get into the nitty-gritty of the Taiwanese visas and residence programs, it would be a great idea to try and understand what Taiwan actually is.
Officially known as Taiwan, Republic of China (ROC), Taiwan claims that it is a sovereign state. Meanwhile, China regards it as its province and officially a part of the People’s Republic of China under the One-China Principle.
In reality, China has no control over Taiwan, but it has “vowed to retake Taiwan, by force if necessary.”
So, Taiwan has, in practical terms, been independent since 1950. But its position on the geopolitical map of the world remains unclear.
China has threatened that whoever cozies up to the leaders of Taiwan won’t be held in favor by China, and trade relationships could suffer or come to a halt, even.
They’ve gone as far as to demand that Taiwan be taken off the lists of countries and maps on corporate websites, and many have complied.
Obviously, China is an economic giant in the world that no one wants to (or even can) alienate. However, when democracy is on the line, expect America to chime in.
Although not entirely close, the Taiwanese-American relations and the American support for Taiwan’s democratically-elected leaders have been unwavering; America is Taiwan’s strongest ally.
Despite the international isolation, Taiwan has demonstrated just how strong it is.
It has grown to become one of the most powerful economies of the world with a robust foreign investment environment.
It’s also one of the most densely populated countries in the world – 23 million people on one relatively small island. That’s a huge internal market for all kinds of services and goods.
With a GDP of nearly $600 billion, Taiwan is a real powerhouse when it comes to electronics. Many of Apple’s, Amazon’s, and Microsoft’s electronics and gadgets are manufactured here by the tech giant Foxconn.
In fact, Taiwan is considered the world’s most advanced computer microchip manufacturer in the world.
That, added to the fact that Taiwan has a democratically elected government, its own constitution and army, and a media environment that’s arguably the freest in Asia, and you’ve got a country that’s highly attractive to not just live in but do business in too.
So, if you can overlook the fact that the country is very close to China and is a contested Chinese territory, this is a very strong country in which you could reach your financial goals.
The Economy and Investment in Taiwan
Of course, political stability only means so much when it comes to investing in a country. Economic health is paramount as well.
So, the serious investor or entrepreneur will be glad to know that Taiwan has a highly developed capitalist economy:
- It’s the 7th largest economy in Asia
- It’s the 20th largest economy in the world by purchasing power parity
- It’s part of the Advanced Economies Group, as classified by the IMF
- It’s considered a high-income economy, as classified by the World Bank
- It’s ranked 15th in the world in the World Bank’s Doing Business 2020 report
And the best news is that it’s a highly favorable country when it comes to foreign direct investment (FDI). In 2020, Taiwan had retained its position as the third-best destination in the world to invest in, as well as its top position in Asia, as ranked by the US Business Environment Risk Intelligence.
And it shows.
Based on the World Investment Report 2020, foreign direct investment in Taiwan was $8 billion in 2019, an increase from $7 billion in 2018.
Obviously, mainland China is the country’s top foreign investor (27%), with the British Virgin Islands (20%), the Netherlands (15%), and Japan (8%) ranked below. And as far as the sectors go, manufacturing, financial services, and IT get the most foreign investment.
All of these accolades wouldn’t be true if it weren’t for the government that has wholeheartedly embraced and spurred on foreign investment.
A foreign national can establish any type of legal entity in Taiwan, the preferred one being a public limited company. Sure, there is a list of industries that can’t accept foreign capital due to national security or environmental reasons, but the overall governmental strategy is largely motivated by FDI.
From tax incentives, exemptions, low-interest financing, and even governmental subsidies (for both individuals and companies), Taiwan is sure to be open for business.
To summarize, the pros of investing in Taiwan are:
- A robust economy ranked among the top in the world
- Your gateway to Asian markets
- A world-class destination for IT manufacturing and R&D
- A workforce that is highly educated and vast
But don’t neglect to weigh up the cons of doing business in Taiwan too:
- It’s an export economy that’s highly dependent on the global economy
- Strong dependency on China as its main trading partner
- Lack of economic diversity (i.e., a handful of industries are the main pillars)
Ultimately, it’s up to you to consider the pros and the cons, but don’t forget that if you feel you’re in too deep, you can always call on our help.
Your Taiwanese Visa Options
You can easily visit Taiwan for a period of up to 90 days on a tourist visa, like many of the world’s countries.
However, if you’re looking to stay in Taiwan for longer than six months to invest or to do business, you’ll need to apply for a Taiwanese visa such as a Taiwan permanent resident card.
Taiwan has long welcomed foreigners to take up residence, which distinguishes the country as quite a liberal one in the region, especially when compared to isolationist countries like Japan.
It actually has multiple options in terms of resident visas, all of which are issued to foreign nationals who either invest or set up a business in the country.
Your plan of action depends on if you want to physically reside in Taiwan for at least 183 days a year, or not:
1. Temporary residence – residence requirement of 183 days a year
- Invest $200,000 in a new or existing business
2. Permanent residence – no residence requirement
- Invest $500,000 (NT$15 million) in a for-profit business and create 5 full-time jobs for Taiwanese nationals for 3+ years
- Invest $1 million (NT$30 million) in government bonds for 3+ years
Let’s talk about each of these options in more detail.
Note, you may also bring your family, including your spouse and underage children, with you to Taiwan under the same investment. However, they will need to apply for their own Taiwanese visas.
You cannot, however, bring your parents to Taiwan via these programs.
How to Obtain a Temporary Residence in Taiwan
If you wish to invest the lesser amount and actually reside in Taiwan, then your only option will be to apply for Taiwan’s temporary residence visa.
This Taiwanese visa will be valid for two years, and subsequently renewed for another two years, after which you may switch to permanent residence, granted you meet the requirements.
If you would like to invest in a company that already exists, here’s the great news: Our partners in Taiwan have compiled a list of companies that could help you reach your investment targets, so you wouldn’t need to go scouring the internet for information (which would usually be presented in Mandarin Chinese anyway).
Love startups and the vast opportunities that they present? Taiwan has a vibrant startup culture, where incubators and accelerators are plentiful.
You can also invest in giant tech companies, or even start your own enterprise.
But the key for this route to a Taiwanese visa is that it can’t be passively generated income, for instance, a company that gets income from its own real estate investments. The Taiwanese government also won’t let you invest in publicly traded stocks.
If you do want to take a more hands-off approach, then the government bonds option will probably be the best way forward. More on this in the section below.
Obviously, each of these options – a new company or an existing one, a startup or a well-established business – comes with its own pros and cons. We can help you make the right decision for you.
The process for temporary residence goes like this:
• Arrive in Taiwan.
• Open a bank account.
• Conduct a medical check.
• Leave Taiwan.
• Remit at least $200,000 in investment funds from abroad.
• Wait up to 4 weeks for capital inspection (every foreign investment must be vetted first).
• Once the inspection is finished, proceed with business registration – either yourself or via power of attorney.
• Once business registration is completed (usually after one week), apply for your Taiwan temporary residence card. You will need to fill out the application on the Ministry of Foreign Affairs’ website.
• Purchase health insurance and live in Taiwan for at least 183 days each year.
• After 2 years, renew your residency, showing your physical presence, maintenance of your investment, your monthly income (minimum twice the lowest legal wage as set by the government), and your net worth (minimum $180,000).
• After 5 years, apply for permanent residency.
• After 7 years, apply for Taiwanese citizenship.
How to Obtain the Taiwan Permanent Resident Cardn
If you want a Taiwanese visa but don’t want to comply with the residence requirement of the temporary visa, you can do so by investing more money in Taiwan.
In other words, the more you invest, the sooner you gain permanent residence, and the less stringent the requirement for physical residence will be. You won’t have to live in Taiwan at all if you don’t want to.
The Taiwan permanent resident card can be gained in two ways:
- Invest in a business and create jobs. The first way is to invest $500,000 (NT$15 million) in a for-profit business, as well as create 5 full-time jobs for Taiwanese nationals that last over 3 years.
- Invest in government bonds. If you’d like to just ‘set it and forget it,’ you need to take a look at government bonds. Sure, $1 million (NT$30 million) is no chump change, but provided that you’ll get all of it back in three years, it might be worth it for you to get a Taiwan permanent resident card.
The application process is pretty straightforward.
The Taiwan permanent resident card is called the APRC (Plum Blossom Card). You will need to submit your visa application at the local NIA Service Center if in Taiwan, or at your nearest embassy/consulate if you’re abroad. You will need to fill out the application on the Ministry of Foreign Affairs’ website prior to your visit.
Here is the stack of documents that you should prepare for this Taiwanese visa:
- An investment permission and reference letter issued by the Investment Commission, Science Park Administration, or Export Processing Zone Administration.
- A company registration or change form.
- A certificate of no tax arrears and financial statements for the enterprise for the period of the last 3 years (if applicable).
- A list of employees for the last four years (if applicable).
- A certificate of the purchase of Taiwan central government bonds (if applicable).
- Other supporting documents, if required.
- Proof of payment of approximately $400 (NT$10,000) for the visa application fee.
All of these documents should be translated to Mandarin Chinese and notarized. Some might need authentication by an apostille.
Once issued, your Taiwan permanent resident card will be valid for five years.
How to Obtain a Taiwan Entrepreneur Visa
There is another route to a Taiwanese visa by investing absolutely nothing yourself. This is geared towards entrepreneurs, but it is a route nonetheless.
So, do you want to set up an innovative company?
Then the visa you’ll need to apply for will be called the Taiwan Entrepreneur Visa, and you can apply for one either individually or with a team of up to three people.
The process of applying for the Taiwan Entrepreneur Visa is highly streamlined; Taiwan recognizes just how important innovation is, so it has made it extremely simple to apply.
The requirements for this visa are that you have met at least one of the following conditions, in addition to being educated at least to the level of high school:
- Acquired approximately $70,000 (NT$2 million) in funding either domestically or abroad. You can obtain the money from venture capital firms, angel investors, or other funding platforms.
- Gotten accepted to become part of an entrepreneurship park or an incubation center that is run by the government.
- Acquired overseas or domestic patents.
- Received awards from entrepreneur or design competitions.
This visa will let you live in Taiwan for a year, during which you will need to set up your business and get it going.
How to Obtain Taiwanese Citizenship
When it comes to investment immigration and residence programs, one of Taiwan’s lures is also the fact that foreigners can get Taiwanese citizenship after a set number of years. Taiwan extends foreigners the right to Taiwanese citizenship after five years of consecutive legal residency.
This also means that you must have been a tax resident for at least five years, so if you’ve applied and gotten your permanent residence status but have taken advantage of the no physical residence requirement, you won’t be accumulating the years needed to apply for citizenship.
Of course, it might not make sense to you, tax-wise. As with everything, you’ll need to weigh the pros and cons of Taiwanese citizenship.
Keep in mind that to obtain Taiwanese citizenship, you’ll also need to demonstrate that you have no criminal background, pass an exam of Mandarin Chinese and Taiwanese law, and prove that you’re able to support yourself financially.
Dual citizenship is permitted in Taiwan, so you won’t be pushed to renounce your original citizenship or citizenships as you acquire your Taiwanese citizenship and passport.
Another perk is that, regardless of Taiwan’s complicated international relations sphere, the passport ranks quite high – it’s the 32nd best passport in the world and you’d be able to visit 145+ countries with it visa-free.
Add to that the fact that you’d get access to the best healthcare system in the world (as ranked by the Health Care Index 2019), and Taiwanese citizenship might be a welcome addition to your passport portfolio indeed.
Also, if you’re a resident of Hong Kong or Macau, you will be able to obtain Taiwanese citizenship in just 18 months of being a resident of Taiwan.
Tax Implications of Taiwanese Visas and Citizenship
Every international move that you make will have repercussions for your bottom line. Making an investment in Taiwan in exchange for residence is no different.
There are many ways to structure your investment and residence that would lessen the burden of tax legally, but that requires a holistic tax plan that the Nomad Capitalist team can put together only after evaluating your individual situation.
But, here are the main tax implications that taking up residence in Taiwan will have.
If you have a domicile in Taiwan as an individual and spend at least 183 days in the country, you will be considered a tax-resident. Your permanent domicile won’t matter.
Note that you will automatically become a tax-resident if you apply for temporary residence, as one of the requirements is to spend at least 183 days in the country.
So, what will be the ‘damage’?
Luckily, Taiwan is a territorial tax country, which means only the income you generate in the country will be subject to local taxation.
All Taiwanese-source income is taxed, and the country has steep personal income taxes of up to 45%. You’d best avoid those.
Obviously, if you own a local business, you will need to pay yourself a salary or dividends, which are taxed at a rate of 20%.
Don’t forget that there is also an estate and gift tax that will be imposed on your worldwide assets if you are domiciled in Taiwan.
And what if you’ve gained permanent residence in Taiwan and are a non-resident in the country? You will need to pay tax on Taiwanese-sourced income, most likely.
If you have set up a company in Taiwan, you will need to account for sales tax (5%), and business profit tax (20%). The percentages are lower for lesser-earning companies.
The Pros and Cons of Taiwanese Visas
This article has gone into a lot of detail about Taiwanese visas and the country in general. But if you need a simple way to weigh up the pros and cons, this section will help you.
Multiple visa options. Having choices is great when it comes to residence by investment. In Taiwan, you can choose to invest in starting a company or one that already exists. You can also up the ante and put money in government bonds. Whichever is your preferred asset class, there is a way for you to become a resident of Taiwan.
World-class economy. Taiwan is a real powerhouse when it comes to its economy and the foreign direct investment environment. They’ve done it for decades and have been recognized by most of the global financial institutions as top-of-the-class.
No residence requirement. If you opt to make a larger investment and gain permanent residence right away, there won’t be a physical residence requirement to adhere to. This means that you’ll be free to come and go as you please, while still keeping your investment or company active in Taiwan.
Eventual Taiwanese citizenship. After five years of tax domicile, foreigners are able to apply for Taiwanese citizenship. Various requirements will need to be met, for example, you’d need to pass a Chinese Mandarin exam. The Taiwanese passport is ranked 32nd in the world.
Access to healthcare and education. If you bring your family along, rest assured that everyone will be taken care of. High-quality healthcare and education are available to every resident of Taiwan.
A democratic country. Sure, the political status of Taiwan isn’t fully settled, but it has experienced 70 years without any sort of military action or intervention from mainland China. Taiwan has successfully been trading with most of the world’s countries, despite threats from China.
High quality of life. Taiwan is extremely safe, modern, and highly livable too. The crime rates are at historical lows, and Taiwanese residents are a friendly bunch too. Expats consistently rank Taiwan as one of the best places to live.
Vibrant startup community. If you have an innovative business idea and would like to grow it in Taiwan, you’ll be glad to know that there are many avenues that give you access to funding. Internet entrepreneurs – rejoice.
The uncertain international status. Despite the fact that the country has been highly stable politically over the past 70 years, there is no denying that its international status remains convoluted. This could have potential repercussions to its sovereignty and economy at any moment, based on the whim of the Chinese government.
An economy based on a few industries. Since the Taiwanese economy is based on just a few pillars – manufacturing, IT, and financial services – it suffers from some of the effects of economic homogeneity.
The language barrier. If you decide you’d like to take up residence in Taiwan, you’ll have to deal with a language barrier, as most Taiwanese speak Mandarin Chinese, Min Nan Chinese (Taiwanese), or Hakka (an indigenous language). That said, the majority of younger people, especially in the capital Taipei, speak at least basic English.
Taiwanese Visas and Citizenship – FAQs
Although this article is a comprehensive guide to Taiwanese visas, you may still have some questions.
And if your question isn’t listed in this section, please leave a comment below and we’ll do our best to respond to you.
Is Taiwan part of China?
The political status of Taiwan remains unclear. Although China claims that Taiwan is a province of its own, Taiwan has a democratically elected government, a constitution, and it’s own army that’s 300,000 people strong. China has said that it would be willing to reclaim Taiwan by force in the future, if they wished so.
Is it safe to invest in Taiwan?
Every investment carries risks, but Taiwan isn’t a country we would recommend shying away from simply because of its historical and geographic ties with China. Its strong economy offers plenty of opportunities for entrepreneurs and investors alike.
How can I get a Taiwan permanent resident card?
You will need to invest at least $500,000 in business and create five full-time jobs for local people for at least three years. Alternatively, you can also invest in government bonds for a period of at least three years. The biggest perk of this route to residence in Taiwan is that you won’t be required to be physically present in Taiwan. That said, you won’t be able to get Taiwanese citizenship if you aren’t a tax resident either.
What is the minimum investment required to obtain a Taiwan permanent resident card?
The minimum amount is $500,00 for the Taiwan permanent resident card.
Can I invest in real estate or stocks?
No, only active income from companies would qualify you for residence in Taiwan as an investor. In other words, you won’t be able to invest in real estate or even publicly traded stocks. However, there is always the bond option for investors who want to lower their risk or take a hands-off approach.
Can I bring my family with me to Taiwan?
Yes, Taiwan allows its investors and entrepreneurs to bring their family along, including spouses and underaged children, under the same investment sum. Family members, however, will have to apply for their own visas and pay separate visa processing fees.
Don’t be thrown off by the official name; Taiwan, Republic of China is just another name for Taiwan.
Some consider it to be a breakaway Chinese province, others treat it as a fully sovereign and democratic state.
And even though China maintains that no country can have official ties with both China and Taiwan, many do and do so successfully.
Despite the many hurdles, Taiwan has managed to become one of the world’s most robust economies, without even being part of the United Nations or being allowed to foster open and friendly relationships with many of the world’s countries.
It’s complicated past and present with China still looms over Taiwan.
More than a quarter of Taiwanese would like Taiwan to strive for full and officially recognized independence. Meanwhile, 22% of the population wish to stick to the status quo – as a state in between China and independence.
No matter which way they choose to go, the long-standing status of Taiwan as the world’s top microchip manufacturer remains. With a solid economy built on the IT sector, Taiwan has also made a point of welcoming foreign direct investment and offering residence to its foreign investors and entrepreneurs.
Even though you can dodge the physical residence requirement by upping your investment sum, it’s not uncommon to meet expats in Taiwan who had initially arrived for a few months but stayed on for years.
That’s because Taiwan consistently ranks at the top of the charts when it comes to the quality of life, along with being the top-ranked health system in the world.
Could Taiwan fit in your investment plans? Could you plant one, or multiple flags in this Asian powerhouse of a country?
We can help you figure it all out – get in touch today.