US Company Formation from Taiwan (2026): US LLC or C-Corp, Taiwan's Minimum Tax on Overseas Income, No Treaty Yet, and the Arizona Supply Chain

Taiwanese companies have been building in the USA for years. The movement became a wave once TSMC's Arizona fabs drew its suppliers after it. Engineering and parts companies from Hsinchu, Taichung and Tainan now need US subsidiaries to hire, lease and invoice locally. Alongside them, a newer group of Taiwanese founders want a US company for other reasons: Shopify and Amazon sellers, SaaS teams and freelance developers who want dollar payments and US customers.

US company formation from Taiwan is done remotely and quickly. What sets Taiwan apart is its tax system. Taiwan's regular income tax for individuals is largely territorial, and foreign income reaches Taiwanese tax mainly through the basic income tax (最低稅負制, the alternative minimum tax). There is still no tax treaty in force between the USA and Taiwan, although Congress has been working on a law to provide treaty-like relief. Both facts shape whether a Taiwanese founder should choose an LLC or a C-Corporation.

In short: a resident or citizen of Taiwan can own 100% of a US LLC or C-Corporation, formed remotely. For an individual, overseas income is left out of Taiwan's regular income tax. It counts towards the basic income tax only once the household's overseas income reaches NT$1 million a year. Basic tax is 20% of basic income above NT$7.5 million, and is payable only where it exceeds the regular tax. Taiwan's CFC rules apply to low-tax jurisdictions, which generally does not include the USA. With no treaty in force, US dividends to Taiwan are withheld at 30%. Work you do *in Taiwan* can still be Taiwan-source income, whoever invoices for it. With UCB, a Wyoming LLC with EIN is $249 and a Delaware corporation with EIN is $358, all-in.

Who can set up a US company from Taiwan

US states impose no nationality or residence requirement on owners, managers or directors. A Taiwanese citizen living in Taipei, a foreign professional with a Taiwan Gold Card, a Taiwanese citizen living abroad, and a Taiwanese company can all own a US company outright. No US visa, SSN or US address is required, and nobody needs to travel. The company needs a registered agent in its state, which is included for the first year in every UCB formation (see registered agent explained). The IRS issues the company's EIN without an SSN or ITIN (see EIN for non-residents).

For identity, use your passport, with its romanised name spelled exactly as printed, on every document. For proof of address, a recent utility or bank statement in English works best. A household registration transcript (戶籍謄本) with a translation is accepted by some providers.

How Taiwan taxes income from a US company

Individuals: regular tax versus basic tax

Taiwan's regular individual income tax applies to Taiwan-source income. Income from outside Taiwan is excluded from it. Overseas income instead enters the basic income tax calculation, under the Income Basic Tax Act:

• If the whole household's overseas income for the year is below NT$1 million, it is not counted at all.
• Once it reaches NT$1 million, all of it is counted, not just the excess.
• Basic income (regular net income plus overseas income and certain other items) is reduced by a deduction of NT$7.5 million for 2026. The rest is taxed at 20%.
• You pay the basic tax only to the extent it exceeds your regular income tax. Foreign tax paid on the overseas income can be credited, within limits.

For many Taiwanese founders, this means dividends or distributions from a US company add little or no Taiwan tax until household income gets large. A family whose regular net income is NT$2 million and whose US distributions are NT$4.8 million has basic income of NT$6.8 million, below the NT$7.5 million deduction, so it owes no basic tax.

The catch: work done in Taiwan

The exclusion is for income from outside Taiwan. Under Taiwan's Income Tax Act, pay for services performed in Taiwan is Taiwan-source income, regardless of who pays it or where the money lands. A developer sitting in Taipei writing code for American clients is performing services in Taiwan. Putting a US LLC between the developer and the clients does not move the work abroad.

Taiwan generally treats a US LLC as a foreign company (外國營利事業). How Taiwan taxes its owner then depends on the facts:

• whether the LLC's income is treated as Taiwan-source because the work happens in Taiwan;
• whether the LLC has a fixed place of business or business agent in Taiwan;
• what you take out, and in what form.

This is the question to put to your Taiwanese accountant (會計師) before you form. A product business, such as software sold as a subscription, a Shopify brand shipping from a US warehouse, or a US-based service team, has a far stronger claim to foreign-source profits than a solo consultant billing hours worked in Taiwan.

Taiwan's CFC rules and the USA

Taiwan's CFC rules have applied since 1 January 2023, both to companies and to individuals (the latter through the basic income tax). They reach a foreign company that is:

• in a low-tax jurisdiction, meaning one whose corporate tax rate is below 70% of Taiwan's 20% rate (below 14%), or which taxes only domestic-source income; and
• held 10% or more (with family members) or controlled by Taiwanese residents.

The USA's federal corporate rate is 21%, so the USA is generally not a low-tax jurisdiction for this test. That is a real difference from Japan or Korea, whose rules look at the tax the company actually pays. Confirm the position of your specific entity, especially a disregarded LLC, with your accountant.

Taiwan also enacted a place of effective management rule (實際管理處所) in 2016, which would treat a foreign company managed from Taiwan as Taiwanese. It has not yet been brought into force. Keep an eye on it if your US company is run entirely from Taiwan.

No treaty in force, and the bill that would change it

The USA has no income tax treaty with Taiwan. Until relief arrives, the US domestic rates apply:

• 30% on dividends from a US corporation to a Taiwanese shareholder.
• 30% on royalties.
• 30% on related-party interest, which does not qualify for the portfolio interest exemption.

The United States–Taiwan Expedited Double-Tax Relief Act (H.R. 33) passed the House 423–1 in January 2025. It would provide treaty-like rates for qualifying Taiwanese residents, including reduced withholding on dividends, interest and royalties, once Taiwan grants reciprocal treatment. At the time of writing, the Senate version is still before the Finance Committee and no reduced rate is in effect. Plan on 30% until it passes, and design structures that work either way.

US LLC formation from Taiwan

A single-member LLC owned by a non-resident is disregarded for US federal income tax. Without a US office, US staff or agents who conclude contracts in the USA, its income is usually not effectively connected with a US trade or business, so no federal income tax is due (see effectively connected income explained). It must file Form 5472 with a pro forma Form 1120 every year, and missing it carries a $25,000 penalty (see Form 5472 explained).

There is no corporate layer, so money the LLC passes to you carries no US dividend withholding. With no treaty, that matters more for a Taiwanese owner than for most others.

An NT$ example

These are illustrative figures, not a client case, at NT$32 to the dollar.

Wei-Lun runs a small SaaS product from Taipei: scheduling software sold by subscription to American dental clinics. He forms a Wyoming LLC that holds the Stripe account and the customer contracts. Hosting is in the USA, and a US contractor handles support calls. In 2026 the LLC's profit is US$150,000, about NT$4.8 million, which he moves to his Taiwan account.

In the USA, the LLC files Form 5472 and a pro forma 1120. No federal income tax is due, because nothing the LLC does amounts to a US trade or business carried on through a US office or agent.

In Taiwan, his accountant treats the profit as overseas income, given that it comes from software licences used by customers in the USA. With the household's regular net income at NT$2 million, basic income is NT$6.8 million, under the NT$7.5 million deduction, so no basic tax is due. The household's overseas income is over NT$1 million, so it is reported in the basic income tax return.

Now change one fact. If Wei-Lun were instead a consultant billing US clients for hours worked in Taipei, the accountant would look hard at whether the income is Taiwan-source pay for services performed in Taiwan. If it is, regular income tax at progressive rates applies, and the basic tax calculation no longer shelters it.

US C-Corp formation from Taiwan

A C-Corporation pays 21% federal tax on its profits, plus state tax where it does business, and files Form 1120 and Form 5472 each year (see the 21% corporate tax explained and the C-Corp guide for non-residents). With no treaty, its dividends to Taiwan are withheld at 30%.

A corporation is the right structure when:

• a Taiwanese company needs a US operating subsidiary;
• investors expect a Delaware corporation (see raising US investment as a foreign founder);
• profits will be reinvested in the USA rather than paid out.

A Taiwanese supplier's subsidiary in Arizona

Take an illustrative case: a Hsinchu precision-parts maker that supplies a chip plant forms a US corporation with a service team and small warehouse near Phoenix. Arizona is a natural choice of state because the people and the lease are there (see Arizona LLC for non-residents).

Suppose the subsidiary makes US$500,000 profit in a year. Federal tax at 21% is US$105,000, and Arizona's 4.9% corporate tax is about US$24,500, leaving about US$370,500. If it paid all of that to its Taiwan parent today, 30% withholding would take another US$111,150.

In Taiwan, a company is taxed on worldwide income at 20%, with a foreign tax credit capped at the Taiwan tax on that income. The US$370,500 dividend bears Taiwan tax of about US$74,100, which the US$111,150 withheld fully covers, so no further Taiwan tax is due. But the excess US withholding is lost. Total tax on the US$500,000 is about US$240,650, roughly 48%.

If the double-tax relief act takes effect with a 10% rate for a parent company, withholding would fall to about US$37,050. Taiwan would then collect the remaining US$37,050 after the credit. The total would fall to about US$203,600, roughly 41%.

The practical lesson for most Taiwanese groups today is to reinvest US profits in the USA, and to price sales and services between parent and subsidiary at arm's length, documented for both tax authorities. See US subsidiary for a foreign company.

A Taiwanese company investing abroad may also need to report or apply to the Ministry of Economic Affairs' investment review department, depending on the amount and sector. Advanced semiconductor technology is a sensitive sector. Your Taiwanese lawyer will know which applies.

Moving money: Central Bank limits

Taiwan's foreign exchange rules let an individual convert and remit up to US$5 million a year, and a company up to US$50 million, through a bank without Central Bank approval. Remittances above a set amount require a declaration form at the bank. These limits are far above what a founder needs to capitalise a new US company.

Money coming back is converted the same way. Keep the invoices, distribution records and the US company's documents, because your bank and the National Taxation Bureau may ask what the income is.

Banking and payments

Taiwan is a low-risk country for US banks and fintechs, and Taiwanese residents are generally accepted for remote business accounts. Applications go wrong for avoidable reasons:

• A vague business description.
• A website only in Chinese.
• Romanised names that differ between the passport, EIN letter and application.
• The registered agent's address given as the business address.

See US business bank accounts for non-residents, why banks reject non-resident applications and Stripe for non-residents.

Which state

• Wyoming (or New Mexico, the cheapest) for an online business run from Taiwan.
• Delaware for a corporation raising investment.
• The state where the people and premises are for an operating subsidiary. Arizona and Texas are now common for Taiwanese suppliers, and California for tech companies.

See best state for non-residents, Texas LLC for non-residents and the state selector.

What it costs

State fees and the first-year registered agent are included. A US business address with your own suite number is $60 a year. See what a US LLC costs every year.

Visas

Taiwan is an E-1 and E-2 treaty partner for US visa purposes. A Taiwanese national who makes a substantial investment in a real US business can apply for an E-2 visa through it, and a manager moving to a US subsidiary may qualify for an L-1. Both need an immigration lawyer. Once you live in the USA, the company's profits become US taxable income for you.

Common mistakes

• Assuming income from a US company is always "overseas income" in Taiwan. Pay for work performed in Taiwan is Taiwan-source.
• Forgetting that the NT$1 million threshold is all-or-nothing. Once the household's overseas income reaches it, all of it is counted.
• Paying regular dividends from a US corporation to Taiwan at 30% withholding when the profits could be reinvested.
• Assuming the double-tax relief act is in force. It is not, at the time of writing.
• Skipping Form 5472 because the LLC owed no US tax.

Frequently asked questions

Is there a US–Taiwan tax treaty? Not in force. A bill to give treaty-like relief passed the House in January 2025 and is awaiting the Senate. Until then, US dividends, royalties and related-party interest to Taiwan are withheld at 30%.

Is income from my US LLC taxed in Taiwan? Overseas income goes into the basic income tax calculation once the household's overseas income reaches NT$1 million, taxed at 20% above NT$7.5 million of basic income where that exceeds regular tax. Income for work performed in Taiwan can be Taiwan-source and subject to regular income tax instead.

Do Taiwan's CFC rules apply to my US company? They target low-tax jurisdictions (a corporate rate below 14%, or territorial systems). The USA generally does not qualify, but confirm your entity with your accountant.

Will my US LLC pay US tax if I work from Taiwan? Usually not, without a US office, staff or agent. It still files Form 5472 and a pro forma 1120 each year.

LLC or C-Corp? An LLC suits most individual founders, because it avoids the 30% dividend withholding. A C-Corp suits operating subsidiaries of Taiwanese companies and anyone raising US investment.

Do I need an ITIN? Not to form the company or obtain its EIN. See what is an ITIN and who needs one.

How UCB can help

We handle US company formation from Taiwan remotely: the state filing, EIN, registered agent, US business address and bank application, then the yearly federal return through our US tax filing service. Your Taiwanese accountant handles the Taiwan return and the source-of-income question, and we provide the US documents they ask for. See our formation, EIN and bank account package ($348) and the country guide.

Setting up a US company from Taiwan? WhatsApp us at +1 315 961 2956 or email enquiries@ucbsolutions.com.