{"id":18040,"date":"2023-03-03T10:25:10","date_gmt":"2023-03-03T02:25:10","guid":{"rendered":"https:\/\/www.www.reanda.tw\/regulations-related-to-technology-investment-and-equity-participation-in-startup-businesses\/"},"modified":"2023-09-19T18:13:27","modified_gmt":"2023-09-19T10:13:27","slug":"regulations-related-to-technology-investment-and-equity-participation-in-startup-businesses","status":"publish","type":"post","link":"https:\/\/www.reanda.tw\/en\/regulations-related-to-technology-investment-and-equity-participation-in-startup-businesses\/","title":{"rendered":"Regulations related to technology investment and equity participation in startup businesses"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"18040\" class=\"elementor elementor-18040 elementor-17037\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-cbe7438 elementor-section-boxed elementor-section-height-default elementor-section-height-default wpr-particle-no wpr-jarallax-no wpr-parallax-no wpr-sticky-section-no wpr-equal-height-no\" data-id=\"cbe7438\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-2f5d1bf\" data-id=\"2f5d1bf\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-d209442 elementor-widget elementor-widget-text-editor\" data-id=\"d209442\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t<style>\/*! elementor - v3.21.0 - 08-05-2024 *\/\n.elementor-widget-text-editor.elementor-drop-cap-view-stacked .elementor-drop-cap{background-color:#69727d;color:#fff}.elementor-widget-text-editor.elementor-drop-cap-view-framed .elementor-drop-cap{color:#69727d;border:3px solid;background-color:transparent}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap{margin-top:8px}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap-letter{width:1em;height:1em}.elementor-widget-text-editor .elementor-drop-cap{float:left;text-align:center;line-height:1;font-size:50px}.elementor-widget-text-editor .elementor-drop-cap-letter{display:inline-block}<\/style>\t\t\t\t<p>Regulations related to technology investment and equity participation in startup businesses<\/p>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-9c12e75 elementor-section-boxed elementor-section-height-default elementor-section-height-default wpr-particle-no wpr-jarallax-no wpr-parallax-no wpr-sticky-section-no wpr-equal-height-no\" data-id=\"9c12e75\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-c1f8b40\" data-id=\"c1f8b40\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-8b20436 elementor-widget elementor-widget-text-editor\" data-id=\"8b20436\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<p>30 March 2023<\/p>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-b5ec3b0 elementor-section-boxed elementor-section-height-default elementor-section-height-default wpr-particle-no wpr-jarallax-no wpr-parallax-no wpr-sticky-section-no wpr-equal-height-no\" data-id=\"b5ec3b0\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-60c9328\" data-id=\"60c9328\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-71433df elementor-widget elementor-widget-image\" data-id=\"71433df\" data-element_type=\"widget\" data-widget_type=\"image.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t<style>\/*! elementor - v3.21.0 - 08-05-2024 *\/\n.elementor-widget-image{text-align:center}.elementor-widget-image a{display:inline-block}.elementor-widget-image a img[src$=\".svg\"]{width:48px}.elementor-widget-image img{vertical-align:middle;display:inline-block}<\/style>\t\t\t\t\t\t\t\t\t\t<img fetchpriority=\"high\" decoding=\"async\" width=\"1536\" height=\"1021\" src=\"https:\/\/www.reanda.tw\/wp-content\/uploads\/2023\/03\/pexels-paul-loh-233698-1536x1021.jpg\" class=\"attachment-1536x1536 size-1536x1536 wp-image-17599\" alt=\"\" title=\"\">\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-52a27a6 elementor-section-boxed elementor-section-height-default elementor-section-height-default wpr-particle-no wpr-jarallax-no wpr-parallax-no wpr-sticky-section-no wpr-equal-height-no\" data-id=\"52a27a6\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-2c0fba0\" data-id=\"2c0fba0\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-f4864b3 elementor-widget elementor-widget-text-editor\" data-id=\"f4864b3\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<p>The success of a startup company depends on three key factors: technology, talent, and funding. The company&#8217;s future profitability and growth potential stem from leading industry research and development technologies. To attract technical talent, technology investment and equity participation have become popular methods for motivating and retaining employees in startup companies. The Industrial Innovation Act, Small and Medium Enterprise Development Act, and Biotech and New Pharmaceutical Industry Development Act contain provisions regarding deferred taxation for technology transferors. Individuals considering technology investment should prioritize the tax incentives provided by the applicable Industrial Innovation Act.<\/p>\n<\/p>\n<h5><span style=\"color: #008080;\"><strong>I<\/strong>. Taxation Regulations for Technology Investment:<strong><\/strong><\/span><\/h5>\n<p>To incentivize collaboration between individuals, companies, or limited partnerships and to enhance research and development capabilities, according to Sections 12-1 and 12-2 of the <a href=\"http:\/\/www.angle.com.tw\/accounting\/SE.aspx?cx=007993891472084798786%3Afy3xdp41lbc&amp;cof=FORID%3A11&amp;ie=utf-8&amp;q=%E7%94%A2%E6%A5%AD%E5%89%B5%E6%96%B0%E6%A2%9D%E4%BE%8B\" target=\"_blank\" rel=\"noopener\">Industrial Innovation Act<\/a>, individuals, companies, or research institutions (such as educational researchers) who make technology investments or are allocated shares may choose to defer income tax until the <strong>actual transfer of share<\/strong>s after <strong>holding the shares<\/strong> for at least two years. The taxable amount is determined based on either the stock acquisition price or the actual transfer price, whichever is <strong>lower<\/strong>. For unlisted stocks, if the actual transfer price of the deferred stocks exceeds the difference from the acquisition price, the lowest tax liability provision applies.<\/p>\n<p>According to the Ministry of Finance Order No. 09404571980, individuals who make technology investments based on specialized technologies are subject to <strong>comprehensive income taxation<\/strong>. If they cannot provide proof of costs and expenses, the cost and necessary expenses of the specialized technology may be calculated by deducting 30% of the investment capital from the valuation.<\/p>\n<p>Example: Mr. A invested in A start-up company with technology and obtained 50,000 new sha<strong>res of<\/strong> it at $10 each. Assuming that Mr. A is unable to prove the cost of expenses, the property transaction can be 500,000 * (1-30<strong>%)<\/strong> = 350,000 and included in the income tax return fo<strong>r th<\/strong>e year. If Mr. A claims to apply for a deferral under the Industrial Innovati<strong>on Ordinance, he will be exempt from taxation for the current year, and<\/strong> when the actual transfer is made at $50 per share, the property transaction gain at $10 per share at the time of acquisition is still 50,000 * 10 * (1-30%) = 350,000. As for the difference, if it is an unlisted stock with a visa, it will be taxed according to the minimum tax system.<\/p>\n<\/p>\n<h5><span style=\"color: #008080;\"><strong>II. Technology Equity Ratio:<\/strong><\/span><\/h5>\n<p>Although there are no specific restrictions on the proportion of technology shares according to the Company Law, according to Section 156 of the Company Law, shareholders can contribute assets other than cash, such as monetary claims or required technology, to the company. The amount of such contributions must be approved by the board of directors. Therefore, the amount of funds that can be contributed through technology should be determined by an appraisal company and approved by the board of directors before determining the proportion of shares held by technology equity. In the case of technology investment in a closed company, the consent of all shareholders is required.<\/p>\n<\/p>\n<h5><span style=\"color: #008080;\"><strong>III. Considerations for Technology Investment:<\/strong><\/span><\/h5>\n<ol>\n<li><strong>Appraisal by experts for technology valuation<\/strong>: As it is required for capital certification by accountants, the company should provide a technology investment appraisal report. In the case of technology investment in a closed company, as the consent of all shareholders has already been obtained in the process, an appraisal report is not required for capital certification.<\/li>\n<li>Investment with <strong>unregistered<\/strong> <strong>patents<\/strong>: Specialized technology <strong>without<\/strong> patented rights cannot be recognized as amortization expenses.<\/li>\n<li><strong>Application for deferral<\/strong>: Deferral for technology investment requires application and approval by the competent authority to be applicable.<\/li>\n<li><strong>Issuance of no-par or low-par value stocks<\/strong>: This can resolve the tax implications and difficulties in assessing the value of technology in technology investment. For example: issuing 300,000 shares with a face value (or denomination) of 1 NTD, the technology shareholders subscribe to the initial 300,000 shares using cash, establishing the company. Subsequently, other shareholders subscribe to 700,000 shares at 10 NTD per share (a premium of 9 NTD per share), with an investment amount of 7 million NTD, resulting in a shareholding ratio of 3:7.<\/li>\n<\/ol>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>Regulations related to technology investment and equity participation in startup businesses 30 March 2023 The success of a startup company depends on three key factors: technology, talent, and funding. The company&#8217;s future profitability and growth potential stem from leading industry research and development technologies. To attract technical talent, technology investment and equity participation have become popular methods for motivating and retaining employees in startup companies. The Industrial Innovation Act, Small and Medium Enterprise Development Act, and Biotech and New Pharmaceutical Industry Development Act contain provisions regarding deferred taxation for technology transferors. Individuals considering technology investment should prioritize the tax incentives provided by the applicable Industrial Innovation Act. I. Taxation Regulations for Technology Investment: To incentivize collaboration between individuals, companies, or limited partnerships and to enhance research and development capabilities, according to Sections 12-1 and 12-2 of the Industrial Innovation Act, individuals, companies, or research institutions (such as educational researchers) who make technology investments or are allocated shares may choose to defer income tax until the actual transfer of shares after holding the shares for at least two years. The taxable amount is determined based on either the stock acquisition price or the actual transfer price, whichever is lower. For unlisted stocks, if the actual transfer price of the deferred stocks exceeds the difference from the acquisition price, the lowest tax liability provision applies. According to the Ministry of Finance Order No. 09404571980, individuals who make technology investments based on specialized technologies are subject to comprehensive income taxation. If they cannot provide proof of costs and expenses, the cost and necessary expenses of the specialized technology may be calculated by deducting 30% of the investment capital from the valuation. Example: Mr. A invested in A start-up company with technology and obtained 50,000 new shares of it at $10 each. Assuming that Mr. A is unable to prove the cost of expenses, the property transaction can be 500,000 * (1-30%) = 350,000 and included in the income tax return for the year. If Mr. A claims to apply for a deferral under the Industrial Innovation Ordinance, he will be exempt from taxation for the current year, and when the actual transfer is made at $50 per share, the property transaction gain at $10 per share at the time of acquisition is still 50,000 * 10 * (1-30%) = 350,000. As for the difference, if it is an unlisted stock with a visa, it will be taxed according to the minimum tax system. II. Technology Equity Ratio: Although there are no specific restrictions on the proportion of technology shares according to the Company Law, according to Section 156 of the Company Law, shareholders can contribute assets other than cash, such as monetary claims or required technology, to the company. The amount of such contributions must be approved by the board of directors. Therefore, the amount of funds that can be contributed through technology should be determined by an appraisal company and approved by the board of directors before determining the proportion of shares held by technology equity. In the case of technology investment in a closed company, the consent of all shareholders is required. III. Considerations for Technology Investment: Appraisal by experts for technology valuation: As it is required for capital certification by accountants, the company should provide a technology investment appraisal report. In the case of technology investment in a closed company, as the consent of all shareholders has already been obtained in the process, an appraisal report is not required for capital certification. Investment with unregistered patents: Specialized technology without patented rights cannot be recognized as amortization expenses. Application for deferral: Deferral for technology investment requires application and approval by the competent authority to be applicable. Issuance of no-par or low-par value stocks: This can resolve the tax implications and difficulties in assessing the value of technology in technology investment. For example: issuing 300,000 shares with a face value (or denomination) of 1 NTD, the technology shareholders subscribe to the initial 300,000 shares using cash, establishing the company. Subsequently, other shareholders subscribe to 700,000 shares at 10 NTD per share (a premium of 9 NTD per share), with an investment amount of 7 million NTD, resulting in a shareholding ratio of 3:7.<\/p>\n","protected":false},"author":7,"featured_media":20841,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[100],"tags":[],"class_list":["post-18040","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-startups"],"rttpg_featured_image_url":{"full":["https:\/\/www.reanda.tw\/wp-content\/uploads\/2023\/03\/\u5229\u5b89\u9054LINE\u9078\u55ae-_20240513-scaled.jpg",2560,1447,false],"landscape":["https:\/\/www.reanda.tw\/wp-content\/uploads\/2023\/03\/\u5229\u5b89\u9054LINE\u9078\u55ae-_20240513-scaled.jpg",2560,1447,false],"portraits":["https:\/\/www.reanda.tw\/wp-content\/uploads\/2023\/03\/\u5229\u5b89\u9054LINE\u9078\u55ae-_20240513-scaled.jpg",2560,1447,false],"thumbnail":["https:\/\/www.reanda.tw\/wp-content\/uploads\/2023\/03\/\u5229\u5b89\u9054LINE\u9078\u55ae-_20240513-150x150.jpg",150,150,true],"medium":["https:\/\/www.reanda.tw\/wp-content\/uploads\/2023\/03\/\u5229\u5b89\u9054LINE\u9078\u55ae-_20240513-300x170.jpg",300,170,true],"large":["https:\/\/www.reanda.tw\/wp-content\/uploads\/2023\/03\/\u5229\u5b89\u9054LINE\u9078\u55ae-_20240513-1024x579.jpg",800,452,true],"1536x1536":["https:\/\/www.reanda.tw\/wp-content\/uploads\/2023\/03\/\u5229\u5b89\u9054LINE\u9078\u55ae-_20240513-1536x868.jpg",1536,868,true],"2048x2048":["https:\/\/www.reanda.tw\/wp-content\/uploads\/2023\/03\/\u5229\u5b89\u9054LINE\u9078\u55ae-_20240513-2048x1158.jpg",2048,1158,true],"slider-bg":["https:\/\/www.reanda.tw\/wp-content\/uploads\/2023\/03\/\u5229\u5b89\u9054LINE\u9078\u55ae-_20240513-1600x600.jpg",1600,600,true],"card-grid":["https:\/\/www.reanda.tw\/wp-content\/uploads\/2023\/03\/\u5229\u5b89\u9054LINE\u9078\u55ae-_20240513-600x900.jpg",600,900,true],"card-list":["https:\/\/www.reanda.tw\/wp-content\/uploads\/2023\/03\/\u5229\u5b89\u9054LINE\u9078\u55ae-_20240513-600x700.jpg",600,700,true],"tenweb_optimizer_mobile":["https:\/\/www.reanda.tw\/wp-content\/uploads\/2023\/03\/\u5229\u5b89\u9054LINE\u9078\u55ae-_20240513-scaled.jpg",600,339,false],"tenweb_optimizer_tablet":["https:\/\/www.reanda.tw\/wp-content\/uploads\/2023\/03\/\u5229\u5b89\u9054LINE\u9078\u55ae-_20240513-scaled.jpg",768,434,false]},"rttpg_author":{"display_name":"","author_link":"https:\/\/www.reanda.tw\/en\/author\/"},"rttpg_comment":0,"rttpg_category":"<a href=\"https:\/\/www.reanda.tw\/en\/category\/insights\/startups\/\" rel=\"category tag\">Startups<\/a>","rttpg_excerpt":"Regulations related to technology investment and equity participation in startup businesses 30 March 2023 The success of a startup company depends on three key factors: technology, talent, and funding. The company&#8217;s future profitability and growth potential stem from leading industry research and development technologies. To attract technical talent, technology investment and equity participation have become&hellip;","_links":{"self":[{"href":"https:\/\/www.reanda.tw\/en\/wp-json\/wp\/v2\/posts\/18040","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.reanda.tw\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.reanda.tw\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.reanda.tw\/en\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/www.reanda.tw\/en\/wp-json\/wp\/v2\/comments?post=18040"}],"version-history":[{"count":0,"href":"https:\/\/www.reanda.tw\/en\/wp-json\/wp\/v2\/posts\/18040\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.reanda.tw\/en\/wp-json\/wp\/v2\/media\/20841"}],"wp:attachment":[{"href":"https:\/\/www.reanda.tw\/en\/wp-json\/wp\/v2\/media?parent=18040"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.reanda.tw\/en\/wp-json\/wp\/v2\/categories?post=18040"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.reanda.tw\/en\/wp-json\/wp\/v2\/tags?post=18040"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}