Taiwan Legal Channel :: Types of Companies under Taiwan law

Types of Companies under Taiwan law

If you decide to set up a company, two most common choices are limited company and company limited by shares. A company limited by shares can be further set up as a closely-held company limited by shares. The table below summarizes the main differences among each other.

	limited company	company limited by shares	closely-held company limited by shares
Shareholder Requirements	Shareholders can be corporations or natural persons, local or foreign.
Minimum capital required	No minimum capital requirement
Shareholders have limited liabilities?	Yes
Minimum number of shareholders	1	2 (Note 1)	2(Note 1)
Maximum number of shareholders	No restrictions	No restrictions	50
Minimum number of key personnel	1 director	1 director, 1 supervisor (Note 2)	1 director, 1 supervisor (Note 2)
Maximum number of key personnel	3 directors	No restrictions	No restrictions
Allowed to issue shares?	No	Yes	Yes
Allowed to prohibit share transfer under the constitutional documents?	No. But a shareholder must obtain consent from 1/2 or 2/3 of the other shareholders before he can transfer his capital contribution	No	Yes. It’s a compulsory requirement for a closely-held company limited by shares to provide share transfer restrictions in the constitutional documents.
Having the shareholders’ meeting as a governing body?	No	Yes	Yes
Having the shareholders’ meeting as a governing body?	No	Yes	Yes
	Allowed to have only 1 shareholder	Easy to understand because its structure is similar to a corporation under Delaware law. Suitable for a company which may have many shareholders	Allowed to impose share transfer restrictions under the constitutional documents.

Note 1: A company limited by shares is allowed to have only 1 shareholder if the shareholder is a company, corporation or any other form of legal person.
Note 2: A company limited by shares is allowed to have only 1 director and sets up no position of supervisor if the company has a sole company shareholder.

Company laws in Taiwan are sometimes complicated and investing into Taiwan requires approval from the Taiwan government. Please consult independent advice before you seek to apply the information above. If you require further assistance, please contact aliciahsulawyer@gmail.com. (August 2020)