TAIPEI (Taiwan News) — Texas is emerging as a preferred destination for Taiwanese companies, offering a business-friendly tax system and strengthened corporate legal framework, KPMG Taiwan said Tuesday.
Traditionally, Delaware has been the top choice for Taiwanese firms because of its specialized Court of Chancery and extensive case law, which provide legal predictability, per CNA.
However, Ting Ying-tai (丁英泰), a CPA in KPMG Taiwan’s Tax and Investment Department, said Delaware’s broad judicial interpretations can sometimes create uncertainty. He cited a 2018 case in which a NT$1.7 trillion (US$56.8 billion) CEO stock option plan was invalidated over procedural issues, per UDN.
Texas has strengthened its corporate legal system in recent years, establishing a Business Court in 2023 that began operations in 2024 with judges experienced in business law and no jury trials to improve efficiency. The state also passed SB 29 last year, raising thresholds for shareholder lawsuits and granting directors immunity for good-faith decisions, reducing litigation risks.
On taxes, Liao Yueh-po (廖月波), associate director in KPMG Taiwan’s Tax and Investment Department, said Delaware charges franchise taxes based on company capital, while Texas applies franchise taxes on net revenue margins.
Delaware corporations not operating in the state avoid state corporate income tax but must still pay franchise tax, he noted. Texas’s lack of corporate income tax has attracted more Taiwanese firms despite Delaware’s historic dominance.
KPMG advised companies to carefully evaluate the legal and tax frameworks of each state before investing and to seek professional guidance.
