【Business Law】Essential Capital Concepts for Private Company Limited by Shares in Taiwan
1. Introduction
When you form a private company limited by shares in Taiwan, you immediately face foundational decisions about your company’s capital and shares. In simple terms, capital is the financial lifeblood you and your fellow shareholders inject into the company, while shares constitute the divisible units of that capital. In Taiwan, Article 156 of the Company Act (公司法; the “Act”) mandates that a company limited by shares must divide its capital into shares, with each share representing both a fractional ownership interest and the contributed amount. These initial capital decisions profoundly influence how you raise funds, attract investors, and manage your company for years to come. Getting this right from day one determines your immediate financial capacity and your future agility in the face of new opportunities and challenges. This essay introduces some essential concepts underlying Taiwan’s corporate capital rules for private companies limited by shares. Our goal here is to demystify these rules and help you make informed, strategic decisions from the very start. We will explore the bedrock principles that ensure financial integrity, introduce the modern tools available for flexible financing, and address the practical business realities you will face when capitalizing your venture.
2. The Bedrock Principles
Taiwan’s corporate capital regime incorporates three traditional principles that govern the ascertainment, maintenance, and immutability of capital, which operate in concert to safeguard the financial structure of companies. These principles establish a logical sequence that governs your company’s financial foundation. First, you must clearly establish and verify your capital (ascertainment). Second, you must preserve that capital throughout your company’s existence (maintenance). Third, you can only change that capital by following strict legal procedures (immutability). This system reassures creditors that a financial cushion exists and tells investors their equity will not be arbitrarily diluted or diminished.
2.1 Ascertaining Your Capital Base
The ascertainment principle demands that you establish and verify your company’s capital through legally defined procedures. In the past, Taiwan required companies limited by shares to meet minimum capital requirements and fully pay in their issued capital at the time of incorporation. However, a 2009 amendment to the Act eliminated general minimum capital requirements, granting companies limited by shares greater flexibility in their initial capitalization. Today, Taiwan operates under an authorized capital system that allows companies to set a maximum authorized capital ceiling in their articles of incorporation and then issue shares as needed. This empowers you to launch with minimal initial capital and later raise more through board resolutions within the authorized capital ceiling, avoiding the need to amend your articles of incorporation for every funding round within that ceiling.
Despite this flexibility, the Act maintains stringent verification requirements to ensure capital integrity. Article 7 of the Act mandates that a certified public accountant (“CPA”) must verify the capital amount stated in your company’s registration application for establishment and must also audit any changes to registered capital amounts. The law imposes severe consequences for sham capital arrangements. Under Article 9, if shareholders fail to actually pay for their shares but the company falsely declares payment, or if the funds are paid in but then illicitly refunded to shareholders after incorporation, the company’s responsible persons face both civil liability for any resulting damages and severe criminal penalties, including imprisonment of up to five years, detention, or a substantial fine ranging from NT$500,000 to NT$2,500,000.
2.2 Maintaining Your Capital Integrity
The maintenance principle requires your company to preserve assets equivalent to its stated capital throughout its existence. This principle prevents the erosion of your company’s financial foundation. A prime example is Article 167 of the Act, which prohibits a company from acquiring its own shares as security for debts and restricts share repurchases except as specifically permitted by law. The legislature recognized that an absolute ban would hinder legitimate business needs. Therefore, the Act carves out specific exceptions that strike a balance between capital preservation and commercial reality. For instance, you can repurchase shares in specific situations, such as redeeming special shares (Article 158), implementing employee stock plans (Article 167-1), awarding employee compensation (Article 235-1), or buying shares from dissenting shareholders who exercise appraisal rights during major corporate changes like a merger (Article 317) or other key transactions (Article 186).
2.3 Changing Your Capital Structure
The immutability principle dictates that once your company’s capital is registered, you cannot alter it without following strict statutory procedures. This principle elevates capital from a simple accounting figure to a legal commitment, protecting both creditors from surprise reductions and shareholders from unauthorized dilution. The Act enforces this principle through detailed rules for capital increases and reductions.
You can increase capital in several ways. For instance, a cash capital increase (現金增資) by selling new shares, a capitalization of retained earnings (盈餘轉增資) by converting profits into capital, or a capitalization of capital reserve (資本公積轉增資) by turning share premiums or other contributions into new shares. Each method serves a distinct purpose and has its own specific requirements. To simplify, a critical matter is the required approval level, which depends on whether you are issuing shares within your authorized capital ceiling. A board resolution is sufficient if you stay within the authorized ceiling. But to raise the ceiling itself, you must amend the articles of incorporation, which requires a special resolution at a shareholders’ meeting.
Capital reduction is subject to even stricter procedures because it directly affects the asset cushion for creditors. You must obtain shareholder approval and formally notify all known creditors, providing them with a minimum of thirty days to object. If any creditors object, you must either pay their claim in full or provide adequate security before you proceed with the capital reduction. These stringent procedures underscore the gravity of altering the company’s capital, reinforcing its status as a cornerstone of financial stability.
The ascertainment principle demands that you establish and verify your company’s capital through legally defined procedures. In the past, Taiwan required companies limited by shares to meet minimum capital requirements and fully pay in their issued capital at the time of incorporation. However, a 2009 amendment to the Act eliminated general minimum capital requirements, granting companies limited by shares greater flexibility in their initial capitalization. Today, Taiwan operates under an authorized capital system that allows companies to set a maximum authorized capital ceiling in their articles of incorporation and then issue shares as needed. This empowers you to launch with minimal initial capital and later raise more through board resolutions within the authorized capital ceiling, avoiding the need to amend your articles of incorporation for every funding round within that ceiling.
Despite this flexibility, the Act maintains stringent verification requirements to ensure capital integrity. Article 7 of the Act mandates that a certified public accountant (“CPA”) must verify the capital amount stated in your company’s registration application for establishment and must also audit any changes to registered capital amounts. The law imposes severe consequences for sham capital arrangements. Under Article 9, if shareholders fail to actually pay for their shares but the company falsely declares payment, or if the funds are paid in but then illicitly refunded to shareholders after incorporation, the company’s responsible persons face both civil liability for any resulting damages and severe criminal penalties, including imprisonment of up to five years, detention, or a substantial fine ranging from NT$500,000 to NT$2,500,000.
2.2 Maintaining Your Capital Integrity
The maintenance principle requires your company to preserve assets equivalent to its stated capital throughout its existence. This principle prevents the erosion of your company’s financial foundation. A prime example is Article 167 of the Act, which prohibits a company from acquiring its own shares as security for debts and restricts share repurchases except as specifically permitted by law. The legislature recognized that an absolute ban would hinder legitimate business needs. Therefore, the Act carves out specific exceptions that strike a balance between capital preservation and commercial reality. For instance, you can repurchase shares in specific situations, such as redeeming special shares (Article 158), implementing employee stock plans (Article 167-1), awarding employee compensation (Article 235-1), or buying shares from dissenting shareholders who exercise appraisal rights during major corporate changes like a merger (Article 317) or other key transactions (Article 186).
2.3 Changing Your Capital Structure
The immutability principle dictates that once your company’s capital is registered, you cannot alter it without following strict statutory procedures. This principle elevates capital from a simple accounting figure to a legal commitment, protecting both creditors from surprise reductions and shareholders from unauthorized dilution. The Act enforces this principle through detailed rules for capital increases and reductions.
You can increase capital in several ways. For instance, a cash capital increase (現金增資) by selling new shares, a capitalization of retained earnings (盈餘轉增資) by converting profits into capital, or a capitalization of capital reserve (資本公積轉增資) by turning share premiums or other contributions into new shares. Each method serves a distinct purpose and has its own specific requirements. To simplify, a critical matter is the required approval level, which depends on whether you are issuing shares within your authorized capital ceiling. A board resolution is sufficient if you stay within the authorized ceiling. But to raise the ceiling itself, you must amend the articles of incorporation, which requires a special resolution at a shareholders’ meeting.
Capital reduction is subject to even stricter procedures because it directly affects the asset cushion for creditors. You must obtain shareholder approval and formally notify all known creditors, providing them with a minimum of thirty days to object. If any creditors object, you must either pay their claim in full or provide adequate security before you proceed with the capital reduction. These stringent procedures underscore the gravity of altering the company’s capital, reinforcing its status as a cornerstone of financial stability.
3. Modern Tools for Structuring Your Capital
While the foundational principles provide essential protections, the Act also offers sophisticated tools for modern financing needs. These tools enable you to construct flexible, strategic capital structures that strike a balance between traditional creditor protection and the demands of a dynamic business environment. Here, we explore three of these tools at your disposal.
3.1 Using Authorized Capital for Strategic Growth
The authorized capital system is a powerful mechanism for managing growth and expansion. You can establish a total authorized capital amount in your articles of incorporation, but issue shares and collect funds as needed. For instance, you could establish a company with an authorized capital of NT$30 million. You might initially issue only NT$12 million in shares for immediate operational needs. The remaining NT$18 million authorization is a deployable reserve, ready to be issued through a board resolution when a new opportunity arises. Later, you can swiftly issue shares up to the remaining NT$18 million to fund a new product launch, acquire another business, or secure a major contract, all without the delays and costs associated with convening shareholder meetings to amend your articles of incorporation. This structure provides strategic advantages, especially for high-growth ventures where future capital needs are unpredictable but likely to escalate rapidly.
3.2 Choosing Between Par and No-Par Value Shares
The 2018 amendment to the Act introduced the option for private companies limited by shares to choose between par value and no-par value shares when structuring their equity. This choice has profound effects on your financing flexibility and accounting. Par value shares have a fixed face value (e.g., NT$10). When you issue par value shares above par, the par value amount is recorded as paid-in capital, and the excess amount (the premium) goes into capital reserve (資本公積). For instance, issuing 100,000 shares with a par value of NT$10 at a price of NT$50 per share results in NT$1 million of paid-in capital (100,000 × NT$10) and NT$4 million of capital reserve (100,000 × NT$40 premium). No-par value shares eliminate this distinction. The entire issue price becomes paid-in capital. Using the same example, issuing 100,000 no-par shares at NT$50 each creates NT$5 million of paid-in capital. The no-par option provides advantages for startups whose valuations may fluctuate significantly between funding rounds. It allows you to price shares based on current market conditions without being constrained by an arbitrary par value or dealing with the accounting complexity of premiums. However, Article 156-1, Paragraph 6, of the Act makes the choice to adopt no-par value shares irreversible. Once you adopt a no-par value system, you cannot switch back to a par value system.
3.3 Designing Equity with Common and Special Shares
The Act provides a versatile toolkit for designing equity structures that cater to different investors and strategic goals. Common shares carry standard rights to vote, receive dividends, and share in residual assets upon liquidation. Your creative power comes from designing special shares (特別股) under Article 157, which allows you to customize equity instruments to meet specific investor demands or protect your own strategic interests. You must define the features of any special shares in your articles of incorporation. The design possibilities are extensive. For instance, you can issue (1) special shares with fixed, preferential dividends to attract conservative investors seeking predictable returns, (2) special shares with multiple voting rights per share, allowing founders to retain control even after significant dilution from multiple funding rounds, (3) special shares with veto power over specific matters (such as the sale of the company or major asset dispositions), giving key investors enhanced governance rights, or (4) non-voting special shares for purely financial investors who prioritize returns over control. This versatility enables you to build sophisticated capital structures that evolve with your company. Note that while private companies limited by shares enjoy this broad flexibility, Article 157, Paragraph 3, of the Act prohibits public companies limited by shares from issuing certain types of special shares, including those with multiple voting rights, veto power over specific matters, transfer restrictions, or rights to convert into multiple common shares.
The authorized capital system is a powerful mechanism for managing growth and expansion. You can establish a total authorized capital amount in your articles of incorporation, but issue shares and collect funds as needed. For instance, you could establish a company with an authorized capital of NT$30 million. You might initially issue only NT$12 million in shares for immediate operational needs. The remaining NT$18 million authorization is a deployable reserve, ready to be issued through a board resolution when a new opportunity arises. Later, you can swiftly issue shares up to the remaining NT$18 million to fund a new product launch, acquire another business, or secure a major contract, all without the delays and costs associated with convening shareholder meetings to amend your articles of incorporation. This structure provides strategic advantages, especially for high-growth ventures where future capital needs are unpredictable but likely to escalate rapidly.
3.2 Choosing Between Par and No-Par Value Shares
The 2018 amendment to the Act introduced the option for private companies limited by shares to choose between par value and no-par value shares when structuring their equity. This choice has profound effects on your financing flexibility and accounting. Par value shares have a fixed face value (e.g., NT$10). When you issue par value shares above par, the par value amount is recorded as paid-in capital, and the excess amount (the premium) goes into capital reserve (資本公積). For instance, issuing 100,000 shares with a par value of NT$10 at a price of NT$50 per share results in NT$1 million of paid-in capital (100,000 × NT$10) and NT$4 million of capital reserve (100,000 × NT$40 premium). No-par value shares eliminate this distinction. The entire issue price becomes paid-in capital. Using the same example, issuing 100,000 no-par shares at NT$50 each creates NT$5 million of paid-in capital. The no-par option provides advantages for startups whose valuations may fluctuate significantly between funding rounds. It allows you to price shares based on current market conditions without being constrained by an arbitrary par value or dealing with the accounting complexity of premiums. However, Article 156-1, Paragraph 6, of the Act makes the choice to adopt no-par value shares irreversible. Once you adopt a no-par value system, you cannot switch back to a par value system.
3.3 Designing Equity with Common and Special Shares
The Act provides a versatile toolkit for designing equity structures that cater to different investors and strategic goals. Common shares carry standard rights to vote, receive dividends, and share in residual assets upon liquidation. Your creative power comes from designing special shares (特別股) under Article 157, which allows you to customize equity instruments to meet specific investor demands or protect your own strategic interests. You must define the features of any special shares in your articles of incorporation. The design possibilities are extensive. For instance, you can issue (1) special shares with fixed, preferential dividends to attract conservative investors seeking predictable returns, (2) special shares with multiple voting rights per share, allowing founders to retain control even after significant dilution from multiple funding rounds, (3) special shares with veto power over specific matters (such as the sale of the company or major asset dispositions), giving key investors enhanced governance rights, or (4) non-voting special shares for purely financial investors who prioritize returns over control. This versatility enables you to build sophisticated capital structures that evolve with your company. Note that while private companies limited by shares enjoy this broad flexibility, Article 157, Paragraph 3, of the Act prohibits public companies limited by shares from issuing certain types of special shares, including those with multiple voting rights, veto power over specific matters, transfer restrictions, or rights to convert into multiple common shares.
4. Practical Considerations in Capital Planning
Understanding the legal framework is merely the first step. Successful capital planning integrates legal knowledge with sound business strategy and market awareness. We will now address some practical realities that go beyond the letter of the law.
4.1 The Business Necessity of Sufficient Capital
Although a 2009 amendment to the Act removed the general minimum capital requirement, certain regulated industries remain subject to minimum capital requirements under sector-specific regulations. The business concept of “sufficient capital” is as important as ever. While you can register a company with a very small amount, your capital must be realistic and sufficient to cover your formation costs (e.g., registration and CPA verification fees) and initial operating expenses (e.g., office rent, inventory, and working capital). Market credibility is another crucial factor. Banks, government agencies, and potential partners will look at your paid-in capital as a measure of your company’s financial seriousness. For instance, a company with only NT$100,000 in capital, seeking to win a multi-million-dollar government contract, will likely not be seen as credible, regardless of its team’s talent. Setting your initial capital is a matter of business judgment. When determining your initial capital, consider what level of funding will provide sufficient operational runway and demonstrate financial credibility to key stakeholders (e.g., financial institutions, vendors, or important clients). Furthermore, remember the prohibition on sham capital arrangements under Article 9 of the Act, which carries severe consequences. You must ensure your capital is genuine and remains in the business.
4.2 Capital Requirements for Hiring Foreign Talent
If you plan to hire foreign nationals, you must meet additional capital requirements stipulated by the Employment Service Act (就業服務法; the “ESA”) and the Qualifications and Criteria Standards for Foreigners Undertaking the Jobs Specified Under Subparagraphs 1 to 6 of Paragraph 1 of Article 46 of the Employment Service Act (外國人從事就業服務法第四十六條第一項第一款至第六款工作資格及審查標準; the “QCS”). These regulations effectively reimpose minimum capital thresholds for companies seeking to employ foreign talent. As these requirements are subject to regular updates, you must always check the latest requirements before proceeding. We will cover two common scenarios below.
4.2.1 For Specialized or Technical Work
Under Article 46 of the ESA, you may hire foreign nationals for specialized or technical work. Article 4 of the QCS defines “specialized or technical work” as certain designated work requiring specialized knowledge, expertise, or skills (e.g., civil engineering or building techniques, communications and transportation, tax and financial services, and others). Article 36 of the QCS establishes specific financial thresholds for employers seeking to hire foreign nationals for specialized or technical work. For companies established less than one year, you must meet one of the following criteria: (1) NT$5 million paid-in capital, (2) NT$10 million turnover, (3) US$1 million actual import and export revenue, or (4) US$400,000 agency commissions. For companies established for more than one year, you must demonstrate one of the following in the most recent year or three-year average: (1) NT$10 million annual turnover, (2) US$1 million annual import and export revenue, or (3) US$400,000 annual agency commissions. Certain exemptions exist, for instance, for government-approved research and development centers or corporate headquarters.
4.2.2 As Supervisors or Managers
Article 46 of the ESA permits businesses invested in or established by overseas compatriots or foreign nationals to hire foreign nationals as supervisors or managers. The financial thresholds for this category, outlined in Article 39 of the QCS, are lower. For companies established by overseas compatriots or foreign nationals and established less than one year, you must meet one of the following criteria: (1) NT$500,000 paid-in or working capital in Taiwan, (2) NT$3 million turnover, (3) US$500,000 actual import and export revenue, or (4) US$200,000 agency commissions. Companies established for more than one year must reach one of the following in the most recent year or three-year average: (1) NT$3 million annual turnover, (2) US$500,000 annual import and export revenue, or (3) US$200,000 annual agency commissions. Exemptions apply, for instance, for employers making substantial contributions or cases deemed special by competent authorities.
4.3 Navigating Industry-Specific Capital Rules
Beyond general corporate law and employment regulations, certain regulated industries (e.g., financial services,[1] insurance,[2] and cable radio and television system operators[3]) maintain substantial minimum capital requirements set by their specific governing authorities. You must conduct thorough regulatory due diligence for your specific sector before finalizing your capital structure. These industry-specific rules can dramatically affect your funding needs and business plan.
Although a 2009 amendment to the Act removed the general minimum capital requirement, certain regulated industries remain subject to minimum capital requirements under sector-specific regulations. The business concept of “sufficient capital” is as important as ever. While you can register a company with a very small amount, your capital must be realistic and sufficient to cover your formation costs (e.g., registration and CPA verification fees) and initial operating expenses (e.g., office rent, inventory, and working capital). Market credibility is another crucial factor. Banks, government agencies, and potential partners will look at your paid-in capital as a measure of your company’s financial seriousness. For instance, a company with only NT$100,000 in capital, seeking to win a multi-million-dollar government contract, will likely not be seen as credible, regardless of its team’s talent. Setting your initial capital is a matter of business judgment. When determining your initial capital, consider what level of funding will provide sufficient operational runway and demonstrate financial credibility to key stakeholders (e.g., financial institutions, vendors, or important clients). Furthermore, remember the prohibition on sham capital arrangements under Article 9 of the Act, which carries severe consequences. You must ensure your capital is genuine and remains in the business.
4.2 Capital Requirements for Hiring Foreign Talent
If you plan to hire foreign nationals, you must meet additional capital requirements stipulated by the Employment Service Act (就業服務法; the “ESA”) and the Qualifications and Criteria Standards for Foreigners Undertaking the Jobs Specified Under Subparagraphs 1 to 6 of Paragraph 1 of Article 46 of the Employment Service Act (外國人從事就業服務法第四十六條第一項第一款至第六款工作資格及審查標準; the “QCS”). These regulations effectively reimpose minimum capital thresholds for companies seeking to employ foreign talent. As these requirements are subject to regular updates, you must always check the latest requirements before proceeding. We will cover two common scenarios below.
4.2.1 For Specialized or Technical Work
Under Article 46 of the ESA, you may hire foreign nationals for specialized or technical work. Article 4 of the QCS defines “specialized or technical work” as certain designated work requiring specialized knowledge, expertise, or skills (e.g., civil engineering or building techniques, communications and transportation, tax and financial services, and others). Article 36 of the QCS establishes specific financial thresholds for employers seeking to hire foreign nationals for specialized or technical work. For companies established less than one year, you must meet one of the following criteria: (1) NT$5 million paid-in capital, (2) NT$10 million turnover, (3) US$1 million actual import and export revenue, or (4) US$400,000 agency commissions. For companies established for more than one year, you must demonstrate one of the following in the most recent year or three-year average: (1) NT$10 million annual turnover, (2) US$1 million annual import and export revenue, or (3) US$400,000 annual agency commissions. Certain exemptions exist, for instance, for government-approved research and development centers or corporate headquarters.
4.2.2 As Supervisors or Managers
Article 46 of the ESA permits businesses invested in or established by overseas compatriots or foreign nationals to hire foreign nationals as supervisors or managers. The financial thresholds for this category, outlined in Article 39 of the QCS, are lower. For companies established by overseas compatriots or foreign nationals and established less than one year, you must meet one of the following criteria: (1) NT$500,000 paid-in or working capital in Taiwan, (2) NT$3 million turnover, (3) US$500,000 actual import and export revenue, or (4) US$200,000 agency commissions. Companies established for more than one year must reach one of the following in the most recent year or three-year average: (1) NT$3 million annual turnover, (2) US$500,000 annual import and export revenue, or (3) US$200,000 annual agency commissions. Exemptions apply, for instance, for employers making substantial contributions or cases deemed special by competent authorities.
4.3 Navigating Industry-Specific Capital Rules
Beyond general corporate law and employment regulations, certain regulated industries (e.g., financial services,[1] insurance,[2] and cable radio and television system operators[3]) maintain substantial minimum capital requirements set by their specific governing authorities. You must conduct thorough regulatory due diligence for your specific sector before finalizing your capital structure. These industry-specific rules can dramatically affect your funding needs and business plan.
5. Conclusion
Taiwan’s corporate capital framework strikes a sophisticated balance between protecting stakeholders and enabling business growth. The foundational principles provide an essential integrity, ensuring that companies are built on genuine financial substance. Within this stable framework, modern tools provide you with remarkable freedom to build a capital structure that aligns with your business vision. Your success hinges on seeing these principles and tools not as abstract rules, but as strategic instruments for achieving your goals. For instance, utilize the authorized capital system to remain agile, select between par and no-par value shares with a clear view of your future funding rounds, and design special shares to attract diverse investors while safeguarding founder control. Each tool can serve as a building block for a capital architecture that can evolve with your company. As you structure your company’s capital, consider both the immediate needs and the long-term implications strategically. By mastering both the traditional principles that ensure stability and the modern tools that grant flexibility, you can build an enterprise that is both legally sound and commercially formidable.
[1] For instance, commercial banks must maintain a minimum paid-in capital of NT$10,000,000,000, pursuant to Article 52 of the Banking Act (銀行法) and Article 2 of the Standards Governing the Establishment of Commercial Banks (商業銀行設立標準). Internet-only banks are subject to this same requirement under Article18-1 of the same standards. Financial holding companies face a significantly higher threshold of NT$60,000,000,000, as stipulated by Article 12 of the Financial Holding Company Act (金融控股公司法) and the Financial Supervisory Commission Order Jin-Guan-Yin-(6)-Zi No. 09660004580 (金管銀（六）字第09660004580號令). Securities firms also face substantial capital requirements. According to Article 3 of the Standards Governing the Establishment of Securities Firms (證券商設置標準), securities underwriters and dealers must maintain NT$400,000,000 in capital, while securities brokers must maintain NT$200,000,000.
[2] The minimum paid-in capital for an insurance company is NT$2,000,000,000, per Article 2 of the Regulations for Establishment and Administration of Insurance Enterprises (保險業設立許可及管理辦法). Digital insurance companies, however, face differentiated requirements under Article 29-3 of the same regulations. A digital life insurance company must have NT$1,000,000,000 in capital, while a digital non-life insurance company needs NT$500,000,000. Insurers must also comply with ongoing capital adequacy requirements under Article 143-4 of the Insurance Act and the Regulations Governing Capital Adequacy of Insurance Companies (保險業資本適足性管理辦法). The current standard mandates a 200% risk-based capital ratio, which will transition in 2026 to a 100% ratio under the Insurance Capital Standard (ICS) framework.
[3] Pursuant to Article 4 of the Enforcement Rules of the Cable Radio and Television Act (有線廣播電視法施行細則), the minimum paid-in capital for a cable radio and television system operator is NT$1,100,000,000 multiplied by its operating right factor. This operating right factor is the quotient of the total administrative households in the operator’s service area for the previous year (as announced by the Ministry of the Interior) divided by the total households in the Taiwan-Fujian area for the same year, rounded up to the fourth decimal place. The competent central authority announces this operating right factor every three years. If the resulting minimum capital amount is less than NT$2,000,000, it shall be deemed NT$2,000,000.
