Scenario: a Taiwanese logistics firm wants a representative in Taipei to work with partners, without forming an entity yet. In Taiwan, a foreign company’s representative office has no legal personality — creating a “liability gap” many investors never notice.
Taiwan: the representative office has no legal personality — the parent is directly liable
- Representative office: registered with the commerce authority — liaison, research and promotion only; no separate legal personality, the parent is directly liable for all its acts.
- Branch: may trade in Taiwan; branch registration required — the parent remains liable.
- Subsidiary: an independent Taiwanese legal person (limited/joint-stock company) — limited liability; foreign capital needs MOEA Investment Commission approval first.
- Joint venture: a subsidiary co-owned with a Taiwanese partner — typically for local networks.
Vietnam: ROs equally lack legal personality — but with a clearer licence “shell”
Under Decree 07/2016/ND-CP, a foreign trader’s RO in Vietnam also lacks legal personality — the parent trader is liable for the RO’s activities. The difference from Taiwan: Vietnam issues a dedicated RO establishment licence (5 years, renewable) stating the activity scope — a clearer legal “shell”.
When an independent person is needed:
- 100% foreign-owned subsidiary: IRC under Investment Law 143/2025/QH15 (effective 1 March 2026) + ERC under Enterprise Law 2020 (amended by Law 76/2025/QH15, effective 1 July 2025).
- Joint venture: co-owned with a Vietnamese partner — needed for capped sectors or distribution networks.
Compared: same “no personality”, different legal “shell”
| Criterion | Taiwan | Vietnam |
|---|---|---|
| RO legal personality | None — parent directly liable | None — parent liable |
| RO licence | Commerce-authority registration | Dedicated 5-year licence (Decree 07/2016) |
| Branch | May trade; parent liable | May trade per licence |
| Foreign subsidiary | MOEA approval first | IRC + ERC |
The lesson: “no personality” means “the parent carries everything”
1. Every RO risk flows to the parent. In both places the RO has no legal personality — disputes, debts and violations of the office are the parent’s. Never let the RO act beyond scope.
2. In Taiwan, MOEA approval is the mandatory gate for subsidiaries. There is no dodging it by opening an RO and trading — a trading RO is a violation, and no substitute for investment approval.
3. When to JV: local networks (distribution, government relations) or capped sectors. A JV needs a detailed shareholders’ agreement — JV disputes are the costliest kind.
Frequently Asked Questions
Does a Taiwanese representative office have legal personality?
None — the parent is directly liable for all acts of the representative office. The ‘liability gap’ many investors miss: damage caused by the RO means the parent compensates directly.
What may a Taiwanese RO do?
Liaison, research and promotion only — no profit-making business. Overstepping is both a violation and exposes the parent to direct liability for consequences.
Does a Vietnamese RO have legal personality?
Also none — the parent trader is liable for the RO’s activities. Unlike Taiwan, Vietnam issues a dedicated 5-year RO establishment licence stating the scope.
What does opening a foreign-owned subsidiary in Taiwan need?
MOEA Investment Commission approval is required before company registration — under the Statute for Investment by Foreign Nationals. No dodging this gate with an RO.
When should we choose a joint venture?
For local networks (distribution, relationships) or foreign-capped sectors. A detailed shareholders’ agreement on governance, exit and deadlock is essential — JV disputes are the costliest.
Can an RO litigate independently?
No — an RO without legal personality cannot sue or be sued independently; the parent is the liable subject. For risk ring-fencing, form a subsidiary.