Taiwan
YOUR GATEWAY TO ASIA
Taiwan External Trade Development Council
Business Alliance Section
Strategic Marketing Department
1
Outline

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Economic Development Vision for 2015
Taiwan’s competitiveness
Investment & trade figures
Why invest in Taiwan
Investment cost analysis
 tax structure
 Investment incentives
 Commercial offices costs
 Human resources (Hi-tech & working labor by sector)
Procedures of setting up companies
Site selections
TAITRA’s business alliance services
Related Contact windows
Industrial investment opportunities
2
Economic
Development Vision
for 2015
3
Economic Development Vision For 2015
Targets to be Achieved
GDP growth: 5% in 2015
GDP per capita:
US$15,000 in 2005  US$20,000 in 2009
 US$30,000 in 2015
CPI less than 2%
Unemployment rate below 4%
 Income gaps below six-fold
4
Economic Development Vision For 2015
Five Master Plans
Industrial
Development
Financial
Market
Public
Construction
Industrial
Manpower
Social
Welfare
5
Economic Development Vision For 2015
Industrial Development
Project Structure
Improve Investment
Climate
Develop & Upgrade
Industries
6
Economic Development Vision For 2015
Improve Investment Climate
1
Provide land incentives
2
Sufficient supply of manpower
3
Offer financing assistence
4
Improve the EVP inspection flow
5
Build mechanism to drive FDI inward
7
Economic Development Vision For 2015
Develop and Upgrade Industries
Strategic Industries
WLAN& ICT, digital home, healthcare & medical
devices, green industries, autotronics
Upgrading
Create brand, marketing value and innovation
Balancing
Assisting SME (small & medium size companies)
Develop local industries
8
Economic Development Vision For 2015
Industrial Manpower
A
Integrate the sources of incubation
centers/universities/industries
B
Recruit international talents
C
Train skilled and professional talents for strategic and
services industries
9
TAIWAN’S
COMPETITIVENESS
10
Taiwan’s Competitiveness
Overall
Ranking
Asian
Ranking
WEF Global Competitiveness Report
2006-2007 (among 125 countries)
13th
4th
Global Competitiveness Index: Basic Requirements
21st
4th
Global Competitiveness Index: Efficiency Enhancers
14th
3rd
Global Competitiveness Index: Innovation Factors
9th
2nd
Business Competitiveness Index
21st
5th
WEF: Global Information Technology
Report 2005-2006 (among 115 countries)
7th
2nd
11
Taiwan’s Competitiveness
IMD: 2005 World Competitiveness
Ranking
18th
EIU: 2006 Business Environment
Ranking (among 82 countries)
19th
BERI: Investment Environment
Risk Assessment Report 2006
6th
ACGA Corporate Governance
Watch 2006 Ranking
(4th in Asia)
(3rd in Asia)
(3rd in Asia)
5th
12
Investment &
Trade Figures
13
Investment & Trade Figures
Basic Statistics
TAIWAN
Taipei
Location
East Asia
Land
35, 980 km2
Population
22,876,527 (Dec. 2006)
Labor Force
10,616,000 (Nov. 2006)
Literacy
96.1%
T A IWA N
Capital
臺
灣
14
Investment & Trade Figures
Basic Statistics
Fact Book
Ranking
(2007
forecast)
23
Real Growth Rate
4.14%
(2007
forecast)
18
GDP (PPP)
US$ 719 Billion
(2007
forecast)
16
Per Capita
US$ 30,874
(2007
forecast)
20
Industrial
Production
4.1%
(Est. 2005)
82
Reserves
US$ 265.14
Billion
(Nov.2006)
3
GDP
GDP (PPP)
Growth Rate
of
Foreign Exchange
T A IWA N
US$ 370.18
Billion
GDP
臺
灣
15
Investment & Trade Figures
Basic Statistics
2007 Economic Growth Forecast
2007 Forecast
World
3.8%
3.2%
USA
3.2%
2.2%
EU
2.5%
2.2%
Japan
2.5%
1.7%
China
10.2%
8.9%
India
7.7%
7.9%
Taiwan
4.1%
4.2%
South Korea
5.0%
4.3%
Singapore
7.0%
5.5%
Source: UN “World Economic Situation and Prospects 2007” annual briefing
T A IWA N
2006 Estimates
臺
灣
16
BASIC STATISTICS
Taiwan's External Trade Value 1994-2006
(in Billion USD)
240
220
200
180
Export
160
Import
140
120
100
80
60
40
20
0
1994
1996
1998
2000
2002
2004
2006
Source: Bureau of Foreign Trade (BOFT), MOEA 17
BASIC STATISTICS
Taiwan's External Trade in 2006
(Exports and Imports/By Country)
Japan
14.67%
Others
27.23%
Australia
1.89%
China
17.95%
Saudi Arabia
2.41%
U.S.A.
12.90%
Malaysia
2.58%
Singapore
3.37%
Germany
2.61%
S. Korea
5.19%
Hong Kong
9.20%
Source: Bureau of Foreign Trade (BOFT), MOEA
18
Investment & Trade Figures
Basic Statistics
Approved Overseas Taiwanese and Foreign Investments
1994-2006 (in Million USD)
12000
10000
8000
6000
4000
2000
0
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Source: Investment Commission, MOEA 19
Investment & Trade Figures
Basic Statistics
Approved Overseas Taiwanese and Foreign
Investments in 2006 (By Industry)
Others
3.82%
Finance &
Insurance
34.88%
Precision
Machinery
1.63%
Electrical &
Electronic Mfg.
44.91%
Transportation
0.31%
Chemical Mfg.
1.19%
Construction
0.40%
Other Service
6.84%
Trade, Wholesale
& Retail
6.02%
Source: Investment Commission, MOEA 20
WHY INVEST IN
TAIWAN
21
Why Invest in Taiwan
Strengths of TAIWAN

Industry clusters & complete supply chain

Strong R&D capabilities

An emerging capital market

Abundant resource of skilled talents

Efficient logistics operation

Gateway to China and the ASEAN markets

Sourcing and marketing through Taiwanese
22
Why Invest in Taiwan
Distribution Map of
Industry Clusters
Automobile & Motorcycle
Hat
Automobile Parts
Hosiery
Bicycle
Machinery
Ceramics & China
Optoelectronics
Clothing/Fabrics
Petrochemical
Dye Industry
Saxophone
Fabrics/Cloths
Faucet
Fishnet
Floriculture
Screw
Semiconductor
Shipbuilding & Steel
Synthetic fiber & Yarn
Foods
Towel
Glass
Wood-carving
23
Why Invest in Taiwan
Complete supply chains of ICT products
Source: IDB, Taiwan (2006)
Provider of
LCD Monitors
Market Share: 68%
Worth: $96.87 BILLION#1
Provider of
Chip Foundry Service
Market Share: 69.2%
Worth: $11.6 BILLION #1
Provider of
Cable Modems
Market Share: 73%
Worth: $838 MILLION #1
Provider of
Notebook PCs
Market Share: 78.3%
Worth: $30.3 BILLION #1
Provider of Wireless
LAN Equipments
Market Share: 88%
Worth: $1.9 BILLION
#1
Provider of
ADSL Modems
Market Share: 78%
Worth: $1.1 BILLION
#1
#2
Semiconductor
Packaging
Market Share: 44.8%
Worth: $5.5 BILLION
#1
Provider of
Mask ROMs
Market Share: 91.2%
Worth: $280 MILLION
Provider of
Analog Modems
Market Share: 86%
Worth: $227 MILLION
#1
#1
24
Why Invest in Taiwan
Strong R&D Capabilities

Research institutions & incubation centers

R&D expenditures from 2.4% of GDP in 2004 to targeted 3% of GDP in 2008

In 2005, Taiwan ranks 4th in number of patents filed and granted with the U.S.
Patent and Trademark Office (USPTO)

In 2005, Taiwan filed 3000+ patent applications to JPO and 679 applications to EPO

27 multinational companies establishing 30 R&D centers in Taiwan:
Source: Directorate-General of Budget, Accounting and Statistics, USPTO, and Intellectual Property Office
25
Why Invest in Taiwan
An Emerging Capital Market
(Dec 2006)
Taiwan Stock Exchange
Listed Companies
691
Market Capitalization
US$572.8 Billion
Over-the-Counter／Venture Capital
Listed Companies of OTC Market
Listed Companies of OTC- Emerging Market
Listed Venture Capital Companies
(Dec. 2006)
534
223
219
Source: Taiwan Stock Exchange Corp., GreTai Securities Market, Taiwan Venture Capital Association
26
Why Invest in Taiwan
An Emerging Capital Market
(Dec 2006)
Banks
Domestic Banks／Branch Offices
43／3,276
Foreign Banks／Branch Offices
33／65
Citibank, Bank of America, Societe Generale, ABN AMRO, Deutch Bank, American
Express, JP Morgan Chase, BNP, UBS, ING, MUFG, SMBC, HSBC, Bangkok Bank, etc.
Major International Bank Alliances
Foreign bank
Domestic bank
Shinsei Bank
Jih Sun Financial Holdings Co.
Standard Chartered Bank
Hsinchu International Bank
AIG
Taiwan Central Insurance
HSBC
Far Eastern International Bank
GE Consumer Finance
Cosmos Bank
Source: FSC, Executive Yuan
27
Why Invest in Taiwan
An Abundant Resource of Skilled Talents
In 2005, graduates of higher education in Taiwan:
> 210,763 with Bachelor’s Degree
> 42,334 with Master’s Degree
> 2,165 with Ph.D. or Doctorate Degree
HiRecruit
http://hirecruit.gov.tw
Recruiting overseas hi-tech talents to
work in Taiwan
HiRecruit
Number of Recruits (2003-2005)
750
656
667
2003
599
2004
600
2005
450
2003
Source: Department of Statistics of Executive Yuan
2004
2005
28
Why Invest in Taiwan
Efficient Logistics Operation
Advantageous geographic location in Asia-Pacific region
Average Flying Time to
8 major Asia-Pacific cities
Average Maritime Navigation to
6 major Asia-Pacific harbors
Tokyo 4h 15m
Seoul 4h
Hong Kong 3h 05m
Shanghai 3h 25m
Taipei 2h 55m
Manila 3h 30m
Singapore 4h 55m
Tokyo 110h
Shanghai 78h
Hong Kong 54h
Kaohsiung 53h
Manila 68h
Singapore 124h
Sydney 6h 15m
29
Why Invest in Taiwan
Efficient Logistics Operation
Unit: 10,000 TEU
World Port Handling Capacity Ranking
Ranking
Harbor
2005
2004
1
2
Singapore
2
1
3
Country
Capacity
Growth
Rate
2005
2004
Singapore
2,319
2,133
8.7%
Hong Kong
China
2,260
2,198
2.8%
3
Shanghai
China
1,808
1,456
24.2%
4
4
Shenzhen
China
1,620
1,365
18.7%
5
5
Busan
South Korea
1,184
1,149
3.1%
6
6
Kaohsiung
Taiwan
947
971
-2.5%
7
7
Rotterdam
The Netherlands
929
829
12.0%
8
9
Hamburg
Germany
805
700
14.9%
9
10
Dubai
UAE
762
643
18.5%
10
8
Los Angeles
USA
748
732
2.2%
Source: Ministry of Transport and Communications 30
Why Invest in Taiwan
Efficient Logistics Operation
Almanac (2006):
2004 Air Cargo Volume Ranking
1
Memphis-MEM (U.S.)
2
Hong Kong-HKG (China)
3
Tokyo-NRT (Japan)
4
Anchorage-ANC (U.S.)
5
Seoul-ICN (Korea)
6
Los Angeles-LAX (U.S.)
7
Frankfurt-FRA (Germany)
8
Singapore-SIN (Singapore)
9
Miami-MIA (U.S.)
10
Louisville-AIZ (U.S.)
11
Taipei-TPE (Taiwan)
12
New York-JFK (U.S.)
13
Chicago-ORD (U.S.)
14
Shanghai-SHA (China)
15
Paris-CDG (France)
Source: CAA, MOTT 31
Why Invest in Taiwan
Efficient Logistics Operation

Transportation hubs to Southeast Asian countries, Europe
and USA
(Weekly)
582 Freighter Flights + 2,582 Passenger Flights
34 cities in Asia
11 cities in Europe
3 cities in Oceania
Source: CAA, MOTT
14 cities in America
2 cities in Middle East Asia
32
Why Invest in Taiwan
Efficient Logistics Operation

Global Distribution Centers in Taiwan

13 multinational companies set up global distribution centers
Keelung Harbor
C.K.S. Int’l Airport
Taichung Harbor
Central Int’l Airport
Kaohsiung Harbor
Kaohsiung Int’l Airport
Source: IDB, MOEA
33
Why Invest in Taiwan
Gateway to China and the ASEAN Markets
Taiwanese Investors in China
(Approved by MOEA, Taiwan)
2,500
2004
1837
7000
2,000
1297
6000
1490
5000
1262
4000
2000
237
264
1,500
1186
934
3000
1000
1090
490 383
728 641
840
488
0
1,000
500
0
Source: DOIS, MOEA
34
Number of Applicants
8000
~1
99
1
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
Investment (Million US$)
9000
n
Gu gsu
Pr
an
o
gd
on vi nc
g
Pr e
Sh o vin
an
ce
gh
a
Fu
ji a i Cit
n
y
P
Zh
eji r ovi
nc
an
g
e
Pr
ov
in
Ti
an ce
j in
Be Cit
Sh
y
an iji ng
do
ng Ci ty
P
Hu rov
in
b
Sz ei P ce
ec
r
hw ovi
nc
an
e
Li
P
ro
ao
v
ni
ng i nce
Jia Pro
v
ng
xi ince
P
He rov
in
Gu
b
an ei P ce
r
gx
i Z o vin
c
hu
an e
Ch
gA
on
gq .R.
Ot ing
he
Ci
ty
rp
ro
vin
ce
s
Jia
Investment (Million US$)
18,000
16,000
8,000
11,631
14,000
12,000
10,000
10,000
8,000
5,305
4,8815,085
4,000
2,000
Source: DOIS, MOEA
6,000
6,000
4,000
1,840
858 1,056 869
1,688
498 358 496 192 285 218 175
0
Number of Cases
Why Invest in Taiwan
Gateway to China and the ASEAN Markets
Taiwanese Investors in China
14,000
12,000
2,000
0
Investment Amount
Approved Cases
35
Why Invest in Taiwan
Gateway to China and the ASEAN markets
Overseas Taiwanese Investors in the ASEAN Countries
2,000
Malaysia
1,500
Thailand
Vietnam
1,000
Indonesia
Philippines
500
Singapore
Cambodia
0
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
Number of Investments
2,500
Sources: DOIS, MOEA 36
Why Invest in Taiwan
Gateway to China and the ASEAN markets
Taiwanese Investors in Major ASEAN Countries
(up
to November 2006)
Unit: Million US$
1st in Vietnam
3rd in Cambodia
Source: DOIS, MOEA
US$8,050.06
US$524.00
3rd in Thailand
US$11,852.64
3rd in Malaysia
US$9,719.83
6th in Indonesia
US$13,844.37
6th in Philippines
US$1,343.89
7th in China
US$53,657.19
37
Why Invest in Taiwan
$14,000
Overseas Taiwanese Investors in the ASEAN Countries
$12,000
$10,000
Malaysia
$8,000
Thailand
$6,000
Vietnam
Indonesia
$4,000
Philippines
20
06
20
05
20
04
20
03
20
02
20
01
20
00
19
99
19
98
19
97
19
96
19
95
19
94
19
93
Cambodia
19
92
$19
91
Singapore
19
90
$2,000
19
89
Accumulated Investments (Million US$)
Gateway to China and the ASEAN markets
Sources: DOIS, MOEA
38
Why Invest in Taiwan
Sourcing & Marketing through Taiwanese
Based in
TAIWAN
Access
ASEAN
Markets
Sourcing with TAIWANESE
investors all over
ASIA
Access
CHINA
Market
39
Why Invest in Taiwan
Sourcing and Marketing Through Taiwanese
2006—Top 20 IPOs
Total Procurement in Taiwan
IPO 2006 Procurement Breakdown
US, CJK and European Estimates of total
Unit: US$B
Procurement in Taiwan 2005-2006
TOP 9
US IPO's
US
Other
3.2%
TOP 20
TOP 8
CJK IPOs
60.2%
96.8%
CJK
Top 3
European
IPOs
TOP 20
IPOs &
Growth
2005
41.0
19.3
3.7
64.0
2006 Est.
44.1
22.43
4.4
70.93
7.6%
16.2%
18.9%
10.83%
30.6%
Europe
6.0%
2006/2005
Growth (%)
Total IPO procurement in 2006—US$73.3 billion
Top 20 IPO procurement in 2006—US$70.93 billion, a 10.83% increase from 2005
Source: Respective companies’ IPOs in Taiwan, OCIID/MOEA, MIC/III, Survey of IPO Purchasing in Taiwan in 2006, December
40
2006
Why Invest in Taiwan
Sourcing and Marketing Through Taiwanese
2006—Top 20 IPOs in Taiwan
United States
China, Japan,
Korea
European
companies
Source: Industrial Development Bureau, MOEA
41
Investment Cost
Analysis
42
Investment Cost Analysis
Enticing Incentives for Investments
 Tax structure
 Investment incentives
 Commercial offices costs
 Human resources (Hi-tech & working
labor by sector)
 Site Sections
43
Investment Cost Analysis
Tax Structure (6-1)
 Classification of taxes and collection Authority
NTA/National Taxes
City/County Tax
Office/Municipal Taxes
Income Tax
Land Tax
Estate and Gift Tax
Building Tax
Business Tax (VAT and Non-VAT)
Deed Tax
Commodity Tax
Amusement Tax
Tobacco and Wine Tax
Stamp Tax
Securities Transaction Tax
Vehicle License Tax
Mining Lot Tax
Source: Deloitte& Touche Taiwan Compile
44
Investment Cost Analysis
Tax Structure (6-2)
 Profit-seeking enterprise income tax rates
Taxable Income Bracket (NT$) Tax Rate
Under $50,000
None
$50,000-$100,000
15% of total taxable income
but the income tax liability
shall not exceed 50% of the
portion of taxable income
over $50,000
Over $100,000
25% on the portion of taxable
income over $100,000
Source: Deloitte& Touche Taiwan Compile
45
Investment Cost Analysis
Tax Structure (6-3)
 Taiwan Double Taxation Agreements (Comprehensive)-1
Country
Date of Signing
Effective Date
Australia
5/29/1996
10/11/1996
Gambia
7/4/1998
11/4/1998
Indonesia
3/1/1995
1/12/1996
Macedonia
6/9/1999
6/9/1999
Malaysia
7/23/1996
2/26/1999
New Zealand
11/11/1996
12/5/1997
The Netherlands
2/27/2001
5/16/2001
Singapore
12/30/1981
1/1/1982
South Africa
2/14/1994
9/12/1996
Source: Taxation Agency, Ministry of Finance
46
Investment Cost Analysis
Tax Structure (6-4)
 Taiwan Double Taxation Agreements (Comprehensive)-2
Country
Date of Signing
Effective Date
Vietnam
4/6/1998
5/6/1998
Swaziland
9/7/1998
2/9/1999
UK
4/8/2002
12/23/2002
Paraguay
4/28/1994
-
Senegal
1/20/2000
9/10/2004
Thailand
7/9/1999
-
Sweden
6/8/2001
11/24/2004
Philippines
5/29/2002
-
Belgium
10/13/2004 initialed
-
Source: Taxation Agency, Ministry of Finance
47
Investment Cost Analysis
Tax Structure (6-5)
 Taiwan Double Taxation Agreements (Shipping or Air Transport)
Country
S: Shipping
A: Air Transport
Date of Signing
Effective Date
Canada
A
7/10/1995
Date of signing
EU
S
8/1/1990
Date of signing
Germany
S
8/23/1988
Date of signing
Israel
S
6/30/1998
Date of signing
Japan
S&A
9/4/1990
Date of signing
Korea
S&A
12/10/1991
Date of signing
Luxembourg
A
3/4/1985
Date of signing
Macau
A
12/18/1998
2/26/1999
The Netherlands
S
6/7/1989
1/1/1988
Norway
S
6/7/1991
Date of signing
Thailand
A
6/30/1984
Date of signing
S&A
5/31/1988
Date of signing
United States
Source: Taxation Agency, Ministry of Finance 48
Investment Cost Analysis
Investment Incentives
Tax Incentives
Non-Tax
Incentives
Government
Participation
in Investment
Low-Interest
Loans
Web
Information
Source: Industrial Development Bureau & Department of Industrial Technology, MOEA
49
Investment Cost Analysis
Tax Incentives
 Company
 Emerging, Important, and Strategic
Industries
 Private Participation in infrastructure
Projects
 Establishment of Logistics and Distribution
Centers
 Free Trade Port
 Establishment of Operation Headquarters
 Indirect Tax Incentives for Science-Base
Industrial Park/Economic Processing Zones
 And more
50
Investment Cost Analysis
Tax Incentives
Company
1
Incentive for Research & Development
2
Incentive for Personnel Training
3
Incentive for New Equipment or Technology
51
Investment Cost Analysis
Tax Incentives
 Incentives for New Equipment or Technology (Tax Reduction Rates)
Industry
For Automation, Greenhouse Gas Emissions Reduction,
and Promotion of an Enterprise’s Digital Efficiency
New
Equipment
Telecommunication,
manufacturing,
technical services
New Technology Minimum Investment
11%
10%
NT$600,000
Construction
8%
5%
NT$2,000,000
Communication,
movie production,
agriculture, waste
recycling,
wholesale and
retail
8%
5%
NT$600,000
52
Investment Cost Analysis
Tax Incentives
Emerging, Important, and Strategic Industries
Incentive
Investment Tax Credit for Shareholders
Incentive
Five-Year Tax Holiday for Companies
53
Investment Cost Analysis
Tax Incentives
Emerging, Important, and Strategic Industries
Information
Industry
Biotechnology
Industry
For more information
Please go to
www.moeaidb.gov.tw
Aerospace
Industry
Telecommunications
Industry
Digital
Content
Industry
54
Source: Industrial Development Bureau
Investment Cost Analysis
Tax Incentives
Five-Year Tax
Holiday for a
Private Institution
Indirect Tax
Incentives
Private Participation in
Infrastructure Projects
New Equipment or
Technology or
Research &
Development or
Personnel Training
Investment Tax
Credit for
Shareholders
55
Investment Cost Analysis
Tax Incentives
Establishment of Logistics and Distribution Centers
A confirmation letter from the IDB & Tax return
1. reviewed by the CPA
The sales of products stored shall be over USD6,060,5610
2. for distribution
The export sales is over US$3,030,300 or 10%
3. of the total sales
Please go to
4. www.moeaidb.gov.tw/portal/english/regulation.jsp
for detailed information
56
Investment Cost Analysis
Tax Incentives
Free Trade Zone
Customs territory, bonded zone
In-depth value-added
processing area
Area for simple processing,
warehousing, and transshipping
Ship or airplane
arrival
Free Trade Zone
Business
Service
center
The breakthroughs:
1.Exemption from
customs clearance
2.Tax exemption
3.Granting selective
landing visa for
foreign business
personnel
4.Autonomous
management
Movement of imported or exported goods
Movement of people
57
Investment Cost Analysis
Tax Incentives
The incentives for attracting businesses to free trade zones
Facilitating business
activities
Allowing in-depth
(streamlining procedures
value-added
Free Trade Zones
for granting entry and
processing
issuing landing visas to
business personnel;
providing exhibition
facilities and services)
(e.g. assembling,
packaging,
manufacturing)
Relaxing hiring ratio
for foreign workers
Rooting deeply in Taiwan
while deploying globally
Duty & tax exemption
(exempt from customs duties,
commodity tax, sales tax,
tobacco and wine excise tax)
Source: CEDI, CEPT, Executive Yuan
Ease of financial
operations
(permitting setup of
holding companies for
offshore investment,
and allowing OBUs to
handle foreign-currency
transactions)
Within physical territory, but
outside the customs territory
(autonomous management; exempted
from customs checking and inspection,
as well as cargo tracking and escort)
58
Investment Cost Analysis
Tax Incentives
Tax exempted
Taxation measures for Free Trade Zones
In compliance
with regulations
for bonded goods
Tax exemption for
transshipping goods and
facilities used by the
businesses
Gate
FTZ
enterprise
Exempted taxes：
FTZ
enterprise
0 Sales Tax
Customs duties,
commodity tax, sales tax,
tobacco and wine excise tax, public
health and welfare dues on tobacco
products, trade promotion service
fees, and harbor service dues
Gate
Free
Trade
Zone
Other
free trade zones
Bonded zones,
EPZs,
Science parks
In compliance with regulations
for exported goods
1. In compliance with
regulations for imported
goods
2. Special regulations for
goods processed within FP
and transported back to FP
Customs
territory
59
Investment Cost Analysis
Tax Incentives
Establishment of Operation Headquarters
1
2
A confirmation letter from the IDB &
Tax return reviewed by the CPA
Incentives for Provision of Talent
Please go to
3
www.moeaidb.gov.tw/portal/english/regulation.jsp
for detailed information
60
Investment Cost Analysis
Tax Incentives
Acquisition of Related Technologies on Operation and Production
A
Tax Exemption on the Payment of Royalty
B
Deferment on the Payment of Income Taxes
on Stock Acquired in Exchange
C
Stock Options on Stock Acquired in Exchange
61
Investment Cost Analysis
Tax Incentives
 Indirect Tax Incentives for Science-Based Industrial Park/Economic-Processing
Fee/Bonded warehouse
Indirect Tax Incentives
Economic Processing
Zone
Science-Based
Industrial Park
Bonded Factory/
Warehouse
Import of raw materials,
fuel, supplies,
semi-finished material
from foreign country
Duty-Free/ VAT-Free
Duty-Free/ VAT-Free
Duty-Free/ VAT-Free
Import of machinery
Duty-Free/ VAT-Free
Duty-Free/ VAT-Free
Dutiable 5% VAT
(refundable)
Export of its
product/service to
foreign country
0% VAT
0% VAT
0% VAT
Purchase of raw
materials, fuel, supplies,
semi-finished material,
machinery from ROC tax
area
0% VAT
0% VAT
0% VAT
Source: Deloitte& Touche Taiwan 62
Investment Cost Analysis
Non-Tax Incentives
A
Measures for Encouraging the Development
of Leading New Products
B
Corporate Participation in the Development
of Technology
63
Investment Cost Analysis
Non-Tax Incentives
Industrial Technology Development
A Program (ITDP)
B Industrial Technology Development
Alliance Program (ITDAP)
Strategic Service Oriented Research
A & Development Program (SRD)
B Industrial Technology Innovation
Center Program (MNCD)
Corporate
Participation in
the Development
of Technology
A Multinational Innovative R&D
Centers in Taiwan (MNCF)
Small Business Innovation Research
B Program (SBIR)
Source: DOIT http://innovation.tdp.org.tw
64
Investment Cost Analysis
Low Interest Loan
Loan-Tern Loans
for promoting private
participation in
infrastructure
projects
Loans for
improving the
industrial structure
or upgrading
industries
And more…..
Loans for entire
economical
development
Loans for
environmental
protection and
energy
conservation
Loans for
strengthening
R&D & financing
economic
development
plans
Source: Development Fund, Executive Yuan
65
Investment Cost Analysis
Low Interest Loan
Website Information
Development Fund of the Executive Yuan
http://www.df.gov.tw/english/index3.html
Council for Economic Planning and development (CEPD),
Executive Yuan
http://www.cepd.gov.tw/encontent/index.jsp
Small and Medium Enterprise Administration,
Ministry of Economic Affairs
http://www.moeasmea.gov.tw/eng/index.asp
Industrial Development Bureau,
Ministry of Economic Affairs
http://www.moeaidb.gov.tw/portal/english/index.jsp
Source: Development Fund, Executive Yuan
66
Investment Cost Analysis
Government Participation in Investment
Principles
Priority-3
Currently on
strengthening venture
capital investment in
innovative industries.
Not exceed 49% of
the total equity of
the invested
enterprise
Priority-2
Priority-1
Historically focused on
Industries such as
petrochemicals
& semiconductors
Lately focused on 10
emerging industries
such as information,
telecommunications,
aerospace, digital
contents & biotech
Source: Development Fund, Executive Yuan
67
Investment Cost Analysis
Website Information
Authorities
Website
Development Fund,
Executive Yuan
http://www.df.gov.tw/english/index.html
Industrial Development Bureau
http://www.moeaidb.gov.tw/idy/english/index.htm
Department of Investment
Services
http://investintaiwan.nat.gov.tw/en/
Council for Economic Planning
and Development, Executive
Yuan
http://www.cepd.gov.tw/encontent/index.jsp
Small and Medium Enterprise
Administration, Ministry of
Economic Affairs
http://www.moeasmea.gov.tw/eng/index.asp
68
Investment Cost Analysis
Rent (ping/month)
Major Asian City Property Rate
10,000
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0 Hong Kong
Seoul
Tokyo
2005 Q2
Singapore
Shanghai
Taipei
Beijing
Jakarta
Bangkok
Kuala Lumpur
2006 Q2
*1 ping = 3.305 m²
*Currency: NT$
Source: Jones Lang LaSalle Research
69
Investment Cost Analysis
2006 Grade A Office Market
Rent
Area
Occupancy rate
Hsin Yi District
77.0%
$2,490
Min Sheng/
Tun Hwa North District
87.1%
$2,270
Tun Hwa South
District
94.0%
$2,320
Non-core Business
District
90.5%
$2,110
Taipei City
85.4%
$2,330
(1 ping = NT$/month)
*1 ping = 3.305 m²
Source: Jones Lang LaSalle Research 70
Investment Cost Analysis
Rent (ping/month)
Market Trend for Business Properties in Taipei City
$3,000
28%
$2,800
24%
20%
$2,600
16%
$2,400
12%
$2,200
8%
$2,000
4%
$1,800
0%
1992
1994
1996
Actual Contract Rate
1998
2000
2002
2004
2006
2008 F
Vacancy Rate
*1 ping = 3.305 m²
*Currency: NT$
Source: Jones Lang LaSalle Research 71
Investment Cost Analysis
Office Rates and More…
According to studies conducted by Jones Lang LaSalle
Research, grade A business offices in central and
southern Taiwan offer very competitive prices.
Top office prices range from NT$400~800/ping per month,
an average lease of NT$500~600/ping per month.
Please contact Jones Lang LaSalle Research in Taiwan for additional information:
Jones Lang LaSalle
www.joneslanglasalle.com.tw
Tel: 886-2-8758-9898
Fax: 886-2-8757-9899
20F-1, Taipei 101 Tower,
No. 7, Xinyi Rd., Sec. 5,
Taipei 11049, Taiwan
Source: Jones Lang LaSalle Research 72
Investment Cost Analysis
Key Labor Indicators
2005
2006
Economic Growth
3.63%
Rate (based on GDP)
4.32 %
GNP Per Capita
US$ 15,455
US$ 16,024
Minimum Wage
NT$ 15,840 (US$465)
NT$15,840 (US$ 465)
Average Wage
NT$ 26,074 (average worker)
NT$ 50,469 (executive-level)
NT$ 26,266 (average worker)
NT$ 47,630 (executive-level)
Labor Force
10.3 Million
10.6 Million
Participation Rate
57.63%
58.15% (November 2006)
Unemployment Rate 4.12%
3.86% (November 2006)
73
Investment Cost Analysis
Start-up Salary
Graduate school
degree
University degree
Commercial
College degree
High school degree
(and below)
Administration
NT$32,104
NT$28,238
NT$26,286
NT$22,463
Finance
Accounting
NT$33,345
NT$29,334
NT$26,335
NT$22,652
Production
Quality control
NT$34,531
NT$29,575
NT$27,144
NT$25,409
R&D
NT$36,504
NT$30,352
NT$27,097
NT$22,925
Sales
NT$33,371
NT$30,143
NT$27,589
NT$23,932
Marketing
Customer
Relations
NT$34,534
NT$29,799
NT$27,324
NT$22,970
Operations
NT$33,271
NT$25,374
NT$23,371
NT$20,895
Average
NT$33,951
NT$28,974
NT$26,449
NT$23,035
Source: Hrfun Management Consultant
74
Investment Cost Analysis
Major Industries Monthly Income
NT$0~19,999
NT$20,000
~29,999
NT$30,000
~39,999
NT$40,000
~59,999
NT$60,000
and above
Average
monthly income
Agriculture, fishing & animal husbandry
47.01
32.7
13.8
5.39
1.12
NT$21,604
Goods-producing industries
9.96
35.58
31.19
17.82
Mining & quarrying
Manufacturing
1.78
11.12
21.69
37.72
41.67
29.48
20.13
16.09
5.45
14.73
5.58
NT$32,622
NT$38,671
NT$32,099
Electricity, gas & water
3.68
11.07
14.67
35.35
35.24
NT$51,564
Construction
6.16
29.21
38.08
23.14
3.41
NT$33,504
Services-producing industries
11.52
28.51
26.57
23.61
9.8
NT$35,912
Trade
13.16
39.36
29.48
14.27
3.72
NT$30,278
Accommodation & food
31.43
42.62
17.72
7.63
0.6
NT$24,219
Transport, storage & communication
3.08
22.4
29.37
33.98
11.17
NT$39,268
Finance & insurance
3.03
16.14
33.67
29.95
17.21
NT$44,518
Real estate & rental & leasing
8.21
35.79
24.51
26.27
5.22
NT$33,431
Professional, scientific & technical services
4.3
22.85
31.81
27.3
13.73
NT$40,451
Education services
10.13
18.53
18.19
34.18
18.97
NT$41,939
Healthcare & social welfare services
6.69
25.65
26.02
30.37
11.27
NT$41,382
Cultural, sporting & recreational services
9.61
31.87
27.85
20.23
10.43
NT$35,507
Other services
21.46
39.91
29
8.69
0.94
NT$26,714
Public administration
5.89
7.88
20.63
44.78
20.82
NT$45,909
Item
unit: %
Source: Directorate-General of Budget, Accounting and Statistics
75
Investment Cost Analysis
Application Procedure
76
WHERE TO INVEST
IN TAIWAN
77
WHERE TO INVEST IN TAIWAN
• Science & Industrial Parks
• Biotech Parks
• Free Trade Zones
• Export Processing Zones (EPZ)
• Environmental Science & Technology Parks
(ESTP)
• Software Parks
78
Where to Invest in Taiwan
【6-1】 Science & Industrial Parks
Keelung Harbor
C.K.S. Int’l Airport
Hsinchu Science Park
(632 ha.)
Optoelectronics, Biotechnology, IC,
PC/Peripherals, Machinery, Telecom
http://www.sipa.gov.tw
Taichung Harbor
Central Int’l Airport
Central Taiwan Science Park
(509 ha.)
Optoelectronics, IC, PC/Peripherals, Telecom,
Machinery, Biotechnology
http://www.ctsp.gov.tw
Southern Taiwan Science Park
Kaohsiung Harbor
Kaohsiung Int’l Airport
(1,038 ha.)
Optoelectronics, Telecom, IC,
PC/Peripherals, Biotechnology
http://www.stsipa.gov.tw
http://www.nsc.gov.tw
79
Where to Invest in Taiwan
【6-2】 Biotech Parks
Keelung Harbor
Ilan
Hsinchu
Changhua
Oceanic Biotechnology Park
Biomedical Science Park
Flower Plantation Park
Chiayi
Spice and Herb Biological Technology Park
Tainan
Orchid Plantation Park
Kaohsiung
Pingtung
Biotechnology Park (STSP)
Agricultural Biotechnology Park
http://www.coa.gov.tw
80
Where to Invest in Taiwan
【6-3】 Free Trade Zones
Keelung Harbor
http://www.klhb.gov.tw
Taipei Harbor
http://www.tpport.gov.tw
C.K.S. Airport
http://www.cksairport.gov.tw
Taichung Harbor
http://www.tchb.gov.tw
Kaohsiung Harbor
http://www.khb.gov.tw
http://www.cepd.gov.tw
81
Where to Invest in Taiwan
【6-4】 Export Processing Zones
Taichung EPZ (26.2 ha.)
Keelung Harbor
C.K.S. Int’l Airport
Chungkang EPZ (177 ha.)
Nantze EPZ (97.8 ha.)
Taichung Harbor
Central Int’l Airport
Kaohsiung EPZ (72.3 ha.)
Linkuang EPZ (9.0 ha.)
Chengkung Logistics Park
(40.3 ha.)
Kaohsiung Software-based
Technology Park (54.5 ha.)
Kaohsiung Harbor
Kaohsiung Int’l Airport
Pingtung EPZ (124.1 ha.)
http://www.epza.gov.tw
82
Where to Invest in Taiwan
【6-5】 Environmental Science & Technology Parks (ESTP)
Taoyuan ESTP
Keelung Harbor
31 hectares
C.K.S. Int’l Airport
Hualien ESTP
Taichung Harbor
Central Int’l Airport
22.01 hectares
Tainan ESTP
30 hectares
Kaohsiung Harbor
Kaohsiung Int’l Airport
Southern ESTP
40.11 hectares
http://ivy3.epa.gov.tw/H/ESTP/en/index.htm
83
Where to Invest in Taiwan
【6-6】 Software Parks
Keelung Harbor
C.K.S. Int’l Airport
Taichung Harbor
Central Int’l Airport
Nankang Software Park
Location: Taipei City
8.2 hectares
http://www.taipei.gov.tw
Kaohsiung Harbor
Kaohsiung Int’l Airport
Kaohsiung Software Tech Park
Location: Kaohsiung City
8.9 hectares
http://www.kaohsiung.gov.tw
84
TAITRA’s
Business Alliance Services
TAITRA Helps You Build Strategic Partnership
to Shape Tomorrow
85
TAITRA’s Business Alliance Services
TAITRA’s Roles and Functions
Partially supported by
the government and
commercial/industrial associations
Various trade-related
services tailor-made to
meet business people’s
needs
TAITRA
Comprehensive
database listing of
Taiwan manufacturers
and country information
Direct marketing channels through
45 branch offices around the world
86
TAITRA’s Business Alliance Services
TAITRA’s Roles and Functions
1 Information for setting up operations
2 Arranging fact-finding tours
3 Recommending strategic partners
4 Free CPA consultation for 1 hour
5 Evaluation for site selections
87
TAITRA’s Business Alliance Services
Positioning of FDI
88
TAITRA’s Business Alliance Services
Strategic Investments
M&A
Target: private equities &
industrial integration
In cooperation with:
Investment banking
CPA
JV
Target: Integration of
resources
In cooperation with:
TAITRA’s databases
Industrial associations
Technology Transfer
Others
In cooperation with:
ITRI
Incubation centers
Industrial promotion
entities
Int’l Distribution Center
Headquarters
R&D & Innovation
Center
89
TAITRA’s Business Alliance Services
Target Market
America
Europe
USA, Canada
UK, Germany,
Holland, France,
Italy
Asia
Oceania
Japan, HK, Korea, Australia
India
90
TAITRA’s Business Alliance Services
TWTC International Business Center (IBC)
Instant Furnished Office
•Good strategic location (located
beside TWTC and Taipei 101)
•Professional consultation on
investment and industrial
information
•Trade Data Library
•Efficient secretarial service
A one-stop service solution!
91
TAITRA’s Business Alliance Services
TWTC International Business Center (IBC)
Standard Office
Complete furnished office:
42 m2
Desks, chairs, cubicle dividers
Telephone
Table-top drinking water dispenser
Flame-retardant carpet
PC & printer
Lounge
123 m2
Conference space
92
TAITRA’s Business Alliance Services
In order to provide a better service that caters to
your business, we strongly recommend the
provision of a business plan upon contacting us
Suggested Contents:
•Brief description of the project
•Description of investor
•Site description
•Production plan
•Description of technology
•Investments
•Operation costs
•Profitability studies
•Customers profit and loss, balance
sheet, or any other useful information
93
TAITRA’s Business Alliance Services
Our Team Members
Contact Person
Area-in-Charge
Contact Information
Ms. Emilia Shih
Section Manager
Ext.: 1371
E-mail: emilia@taitra.org.tw
Ms. Sally Sha
France, Germany,
the Netherlands
Ext.: 1341
E-mail: sha720@taitra.org.tw
Ms. Jenyow Wang
Canada (Vancouver),
USA (San Francisco & Miami)
Ext.: 1340
E-mail: jenyow@taitra.org.tw
Ms. Angelica Hao
China, India, Korea, UAE
Ext.: 1320
E-mail: angelica@taitra.org.tw
Ms. Stella Lin
Italy, United Kingdom, Scandinavian
countries
Ext.: 1349
E-mail: stella@taitra.org.tw
Ms. Catherine Fan
Canada (Toronto)
USA (Chicago & New York)
Ext.: 1347
E-mail: princess@taitra.org.tw
Ms. Janet Hsu
Japan
Ext.: 1321
E-mail: janet_hsu@taitra.org.tw
Ms. Claudia Lee
Australia, Hong Kong, Southeast Asia
Ext,: 1389
E-mail: inong@taitra.org.tw
94
Contact Us
Taiwan External Trade Development Council
Business Alliance Section
Strategic Marketing Department
5th Fl., 333 Keelung Road, Sec. 1, Taipei 11012, Taiwan, R.O.C.
Tel: +886-2-27255200
Fax: +886-2-27576610
E-mail: mkting@taitra.org.tw
http://www.taiwanalliance.com.tw
http://www.taiwantrade.com.tw
95
THANK YOU
© ALL RIGHTS RESERVED.
96