How do Taiwanese government grants/subsidies work for start-ups?
The Taiwanese government has earmarked billions in USD to jumpstart Taiwanese start-ups. The money is parked at various government agencies and at the central and local (municipalities) level.
A good way to think about these programs is to think of them as subsidies. You cannot apply for a “blank check” grant based on a project and decide what you will spend the money on. Rather, the majority of the grants in Taiwan are subsidies, meaning you need to spend the money first and after you have shown proof that you have spent the money, then the government will give you the subsidy per your grant proposal.
The implication of this is that you will need to come up with your own initial funding to go down this path.
How can I get a grant?
Grants are given to companies and not individuals so the first step is to have a Taiwanese entity. If you are a foreign entrepreneur with a foreign company then what you need is to own a Taiwanese entity. Branch offices and representative offices are not allowed to apply for grants.
Other important considerations:
While your CPA may have told you that Taiwan no longer requires a minimum paid-in capital, the reality is that government grants are heavily tied to your paid-in capital. The easiest grant is a NTD 1,000,000 start-up grant offered by the Taipei City government grant but in order to receive that grant, you will need NTD 1,000,000 to start. In most situations, the grant you receive will be a discount to your paid-in capital.
Taiwanese accounting is based on what I term a “guilty until proven innocent” framework. Unless you have the proper evidence, the expense cannot be properly recognized. In the context of start-ups, what this means is that the money you spent on a SaaS subscription with your credit card to a company that is not registered in Taiwan is not considered a valid expense.
The bulk of any government grant that you receive will be earmarked for salary subsidies. Foreign workers may be eligible for subsidies but only if they have Taiwanese residency (ARC). Payments to a remote worker will not qualify for a subsidy.
[This article may be updated as we get more information regarding this topic.]