How to Set up an Association in Taiwan - A Case Study
If one of your entrepreneurial goals in Taiwan is to set up an entity resembling a non-profit organization (NGO), a charity, or a non-profit social enterprise, one option is to form an association. One of the main reasons to open an association is to accept donations from corporate partners and reduce the obstacles to working with governmental organizations and other NGOs. If you’re interested in learning what it takes to create an Association, this article is for you.
The Right Accountant is Crucial
It can take over a year to finalize an association if you choose the wrong accountant, when it really shouldn’t take longer than six months. It really comes down to the accountant you choose, so pick one who comes highly recommended by friends who have already opened their own companies. Unfortunately, a lot of accountants don’t have any actual experience in setting up an association, but may tell you that they can do it. Instead of wasting your time, find someone with a proven track record of establishing an association.
Choose a Home for Your Organization
The accountant will ask if you want to incorporate in all of Taiwan or just Taipei.
Incorporating as a city-based association in Taipei is a much easier process, and is the recommended option. By setting up in Taipei, you only need to prove that you have members in the Taipei area.
To incorporate as a nationwide association, you need to prove that you have members all over Taiwan. If you’re considering founding an association, it is strongly recommended that you talk to people who have done it before to get an understanding of the membership workloads, because they are considerable.
Bring Your Crew
Once you have established a location for your organization, the next step is to gather the signatures of your members. To be efficient, decide to gather close friends and your close network with an aligned mission. This is critically important.
In order to legally establish an association in Taipei, you need to have at least 30 members willing to sign membership forms and who are in one of the following situations:
- Taiwanese with their household registration in Taipei,
- Foreigners with an ARC (Alien Resident Certificate) that shows that they live in Taipei, or
- Taiwanese or Foreigners who don’t live in Taipei but work there (which can be proven with a letter from their employer).
If a member lives in Taipei or has their household registration in Taipei, things are pretty easy; their address is printed on their Taiwanese ID, so that can be shown as proof of residence. However, if a member only works in Taipei, then they need to ask their employer to sign a letter affirming their employment within Taipei. Each member also has to sign a membership form and provide photos of their ID cards.
On top of collecting the paperwork above, you need to require these members to attend two official meetings and sign-in at each meeting.
For example, you can cater two events where your plans and vision for the association can be shared with new members and at the same time, collect their signatures. At least 50% of the members needs to attend each meeting, so it can become a little troublesome to get busy professionals in Taipei to adjust their schedules.
Another key issue is that after its initial founding, a Taipei association needs to continue to hold two general member meetings every six months.
In addition to compiling the association membership, the organization must select a group of board members and a group of audit committee members. The board is meant to be an advisory committee that can offer guidance and decision-making support to the organization and its initiatives, while the audit committee supervises the board and ensures the organization and its finances are in good standing.
If all of this sounds a bit complicated, you can peruse the relevant documentation in Chinese , or ask your accountant to help you get set up.
Pay the Man
With government filings in order, it is finally time to pay your hard-working accountant, which amounts to around NTD$120,000 for the set up and registration process. One other fee to consider is your mailing address. To set up an organization, you need to register a mailing address. If you have an office, you’re already set. However, if your organization is fully remote, you can elect to pay around NT $3,000 / month to rent an office space from a co-working space or business center.
Monthly accounting services will probably cost around NT $ 3,000 – NT $ 4,000 per month.
All in all, expenses should be around NTD$120,000 + NTD$36,000 = NTD$156,000 for a first year of administration, but of course fees will vary according to each organization.
Adventures in Taiwanese Banking
The next logical step entails opening a bank account. There’s no legal requirement regulating which bank an association must choose, but E. Sun Bank has an English-friendly website, and is the only bank that Paypal funds can be transferred to in Taiwan. With newly-minted association documents and chop seals in hand, you can go to your bank of choice and open the association bank account. The bank account MUST be opened at the bank branch closest to your association office address. Please note that this is a fairly minor consideration, as later you can bank at any branch, but when setting up your accounts, be prepared to visit the branch nearest your registered address.
Welcome to the Goody Room
Now that your association is legally established, you can apply for deals that are only available to non-profit organizations. A lot of deals with foreign tech companies can be found via TechSoup Taiwan . Create a profile, upload your association founding documents, and after verification by TechSoup Taiwan, you can register to get Slack Pro, Google Workspace, and other services for free for your org, while also gaining access to discount offers from Zoom and other services. While this should not be a motivation for setting up the association, it is certainly nice to get some goodies back for all the effort.
This article was reviewed by the accountants at Del Sol CPA & Associates 德碩會計師事務所.
Written by Daniel Miller, co-founder of All Hands Taiwan and Taiwan Manager for Pagoda Projects.