How to Import Organic Japanese Tea to Taiwan
Taiwan is known as a paradise for tea lovers. The country has a huge tea market where only good quality tea can survive. The people of Taiwan have a sense of differentiating good tea from the bad one because of a good amount of experience. So, if you’re looking forward to opening up your own business in this tea market, make sure you have the highest quality tea that will drop everyone’s jaws. In that case, you can also consider organic Japanese tea as an option because it will give tough competition to all those tea kings that rule Taiwan as of now.
How can Japanese tea give tough competition to the Taiwan tea market?
As you already know, the Taiwanese tea market is booming, and only high-quality tea products will be able to hold their ground. Japanese tea is an excellent quality tea that has made its mark in the world because of its taste and flavor. Many teas lose their flavor, beauty, and taste after some time, but Japanese tea is the opposite of all of them. The main reason behind this profound success is its manufacturing process. The tea leaves are put through an oxidation process which helps them to retain their flavor and color. In this way, the tea leaves not only maintain their beauty but their taste as well.
About 72.3% of the Japanese people drink Japanese tea on a daily basis, while about 90% of the people drink Japanese tea once or twice a week. That is why Japanese tea is considered one of the most consumed beverages in the entire world. Seeing this massive success of Japanese tea, there’s no doubt that it’s going to be on a high roll in the Taiwanese tea market.
How to import organic Japanese tea to Taiwan?
Whenever you want to import something to Taiwan, you’ll have to follow a particular procedure. First, the business must be registered with the Bureau of Foreign Trade (BOFT). Once it is registered, it can apply for the import permit. This import permit will enable you to import any quantity of organic Japanese tea to Taiwan freely. Since organic Japanese tea is a food product, you’ll need to do prior product registration with the Taiwan Food and Drug Administration (TFDA). Only the local entity of Taiwan can import such registered products. The process of filing the application and completing all the necessary work can take about 16-22 months for healthy foods.
In the case of food products, it is important that the importer must apply for the food inspection because only then will the importer be able to distribute or sell those products in the Taiwanese market. The importer will also have to provide all the relevant information (please see in the FAQ section) to the inspection authorities to inspect the contents of imported products thoroughly. Once your products get approved by the regulatory authorities, your imports can enter the premises of the country.
Custom or Import Duty Tax in Taiwan
The custom or import duty tax is applicable on the entire cost of your imported items, shipment costs, and insurance costs. The below-mentioned table will provide you with an overview of the import tax on tea in Taiwan.
Business Number Registration
A business number is a unique number that is given to each company in Taiwan. This business number is considered proof that a certain business is a legal entity and is legitimately working under the Taiwanese government. A business number will also help you in importing or exporting goods. However, when it comes to business number registration, there are certain things that you’ll need to keep in mind.
The first and foremost thing that you’ll need to do is to select the name of your company. Make sure that the name you choose is in the Chinese language as the official language of Taiwan is Chinese. Also, you can’t select the name that is already taken by another company.
The next thing you need to focus on is the structure of your company. In Taiwan, you can choose among:
- Company Limited by Shares or Public Limited Company
- Limited Liability Company
- Branch Office
- Representative Office
Each one of these business types is capable of doing a variety of activities. However, if you just want to sell products in the country, it is better if you go with making your company a Branch Office. It will help you to avoid that unnecessary expense of paying 21% withholding tax on profits.
What relevant information do you need to provide to the inspection authorities of Taiwan?
Apart from the food inspection certificate, the importer will have to provide:
- Commercial invoice
- Bill of Lading
- Airway Bill
- Packing List
- Certificate of Origin
How can you calculate the import tax on organic Japanese tea in Taiwan?
If you want to calculate the import tax on organic Japanese tea, you need to know its HS-CODE. The HS-CODE for tea is 63-2-93-0-1.
Now, imagine you import organic Japanese tea in bulk. Say, the cost of goods comes out to be TWD 15,000 with the insurance costs of TWD 7,000. The total amount becomes TWD 22,000. Since the value is bigger than the duty rate threshold value and trade promotion tax value, both – the duty rate and the trade promotion tax – will be applied. Now, for tea, the general duty rate is 12%. The value becomes 0.12 x 22,000 = TWD 2,640. Taiwan has an average duty rate as well, which is 6.25%. This value is about 0.0625 x 22,000 = TWD 1,375. The trade promotion tax is 4% which means that the figure becomes 0.04 x 22,000 = TWD 880. Now, the total value of the goods becomes 22,000 + 2,640 + 1,375 + 880 = TWD 26,895. This is the amount that you’ll pay to the Taiwanese government. There’s also 5% VAT applicable on the total value of the goods.
What are the requirements to register a company in Taiwan?
There are six main requirements to register a company in Taiwan. These are:
- Investor agent
- Minimum paid-in capital
- Local office registered address
- Articles of incorporation
First of all, according to the Taiwan Company Act, there should be at least one shareholder who can either be a national individual or a corporate entity. Moreover, according to the same Act, there should be at least one director of the company. If a company has more than one director, only one can be named as a chairman. There’s no restriction on the director to be a resident of the country.
Talking about the investor agent, this agent will act as the legitimate attorney and will speak on behalf of the company with respect to its formation and registration. The investor agent must know all about the Taiwan Companies Act, and they must be a resident of Taiwan. The fourth requirement is that you must provide a local office registered address. You will need to present the office lease to the authorities during the process of application.
Next, you have to provide the minimum paid-in capital, and this capital must be presented in cash forms. However, there is no minimum capital requirement. Still, you should be able to provide an amount that will be sufficient enough to support your company for the first four to six months after it’s been incorporated. This amount needs to be verified by the CPA and deposited in the bank account before the incorporation. The last thing that you’ll need to provide is incorporation articles which are also one of the important things for a startup.
Once you’ve submitted all the required information and documents, they will be sent to the Taiwanese government. After approval, you will get your business registration number along with a tax number.
Taiwan, also known as the hub of tea lovers, has numerous successful tea houses. Thus, if you want to make your mark in such a competitive market, you’ll need something solid and the highest of qualities. Organic Japanese tea may be the thing that you’re looking for. The richness of its flavor, the freshness of its beauty, and the mesmerizing taste will leave everyone enchanted. Therefore, you need to start importing organic Japanese tea to Taiwan, but make sure you know all its import regulations and requirements.
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