Open an E-Commerce Company in Taiwan
Updated on Wednesday 11th September 2019
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The e-commerce sector in Taiwan is rapidly expanding, a trend that is known to happen in other jurisdictions as well. It is estimated that in the near future, online platforms selling goods in Taiwan will overtake the physical stores operating in this country and this is why it can be a great idea to start an e-commerce company here.
Businessmen who want to open a company in Taiwan in the e-commerce industry must also know that the local consumer market is represented by sophisticated shoppers, who are familiarized with the formalities of purchasing online; besides this, the country has one of the largest penetration rates when referring to the e-commerce activities.
In order to start a business in this sector, businessmen must follow the standard registration procedures that are available for traditional companies, but additional procedures will also be required; in this sense, our team of consultants in company registration in Taiwan can assist both local and foreign investors.
What are the top products that are sold online in Taiwan?
Online platforms that provide e-commerce services in Taiwan sell a wide range of products. In this country, the local consumer market purchases online goods such as: accessories, household products, footwear, food, beauty products, skin care products, products designed for babies and children, groceries, computers, video games, travel packages and others. The online environment is also used for booking flights and hotel accommodation.
What is the law on e-commerce in Taiwan?
The e-commerce industry in Taiwan is regulated by a set of rules of law. Besides the commercial legislation that is applicable to legal entities developing taxable activities in Taiwan, the country also applies specific procedures that have to be implemented by online businesses. Thus, e-commerce platforms have to comply with the regulations of the Electronic Signatures Act, which can be presented by our team of consultants in company formation in Taiwan.
Besides this, e-commerce businesses must also comply with the Consumer Protection Act, which provides the right to local consumers to return the products they have bought in a period of seven days, in the case in which they are not satisfied with the quality of the goods. A newer piece of legislation was implemented in 2015 – the Act Governing Electronic Payment Institutions, and, since 2017, foreign e-commerce companies operating in Taiwan have to comply with specific value added tax (VAT) regulations.
Those who want to open a company in Taiwan should know that the VAT rules stipulate, starting with 1st of May 2017, that foreign e-commerce businesses have to register with the local tax authorities and pay a VAT of 5% for the revenues obtained in this country that have a value above NT$480,000 per year.
What is the data on e-commerce in Taiwan?
Most of the e-commerce activities carried out in Taiwan are divided between domestic e-commerce and cross-border e-commerce. However, the country is well represented on the business-to-business e-commerce market segment. The country has an internet penetration rate of 85,1% (in a country with 23,78 million citizens), measured at the level of 2017. Those interested in starting the procedure of company formation in Taiwan in the e-commerce sector should take into consideration the following:
- most of the internet users in Taiwan use mobile phones to connect to various online services (73,3%);
- the personal computer is the second most preferred option (68,8%);
- the notebook is used by 52,1% of the internet users, while the tablet is used by 45% of the Taiwanese online users;
- most of the domestic e-commerce businesses in Taiwan use e-commerce shopping platforms (81,6%);
- the top online purchases are represented by clothing and accessories (20,5%);
- when referring to cross-border e-commerce, the Taiwanese shoppers prefer websites from China (72,7%);
- other cross-border e-commerce websites used by the shoppers in Taiwan are from Japan (40,4%), the United States of America (22,9%) or South Korea (12,8%).
As an online business, it is also crucial to take the necessary measures to ensure that the company’s clients can pay online through a secured method or that they can use other modern means of payment. As a general rule, online shopping payments in Taiwan are done through credit cards (the preferred option of 75,7% of the online shoppers in Taiwan in 2016).
However, companies can also provide the option to pay at a convenience store pickup, or to pay on delivery. The online banking payment is also an option in this case, but companies can also accept payments concluded by using the mobile phone. For more details on the required steps that have to be concluded for opening an e-commerce business here, please contact our team of specialists in company formation in Taiwan.