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Taiwan External Trade Development CouncilTaiwan External Trade Development Council
Business Alliance SectionBusiness Alliance SectionStrategic Marketing DepartmentStrategic Marketing Department
YOUR GATEWAY TO ASIAYOUR GATEWAY TO ASIA
TaiwanTaiwan
2
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
Outline
3
Economic Development Vision
for 2015
4
GDP growth: 5% in 2015GDP 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
Targets to be AchievedTargets to be Achieved
Economic Development Vision For 2015
5
IndustrialDevelopment
Public
Construction
Financial Market
Industrial Manpower
SocialWelfare
Five Master PlansFive Master Plans
Economic Development Vision For 2015
6
Develop & Upgrade Industries
Improve InvestmentClimate
Project Structure
Industrial DevelopmentIndustrial Development
Economic Development Vision For 2015
7
11 Provide land incentivesProvide land incentives
22 Sufficient supply of manpowerSufficient supply of manpower
33 Offer financing assistence Offer financing assistence
44 Improve the EVP inspection flowImprove the EVP inspection flow
55 Build mechanism to drive FDI inwardBuild mechanism to drive FDI inward
Improve Investment ClimateImprove Investment Climate
Economic Development Vision For 2015
8
WLAN& ICT, digital home, healthcare & medical devices, green industries, autotronics WLAN& ICT, digital home, healthcare & medical devices, green industries, autotronics
Strategic IndustriesStrategic Industries
Create brand, marketing value and innovation Create brand, marketing value and innovation UpgradingUpgrading
Assisting SME (small & medium size companies)Develop local industriesAssisting SME (small & medium size companies)Develop local industries
BalancingBalancing
Develop and Upgrade IndustriesDevelop and Upgrade Industries
Economic Development Vision For 2015
9
Integrate the sources of incubation centers/universities/industriesIntegrate the sources of incubation centers/universities/industries
AA
Recruit international talentsRecruit international talentsBB
Train skilled and professional talents for strategic and services industries Train skilled and professional talents for strategic and services industries
CC
Industrial ManpowerIndustrial ManpowerEconomic Development Vision For 2015
10
TAIWAN’S COMPETITIVENESS
11
Taiwan’s Competitiveness
Overall
Ranking
Asian
Ranking
WEF Global Competitiveness Report2006-2007 (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
12
ACGA Corporate Governance
Watch 2006 Ranking55th th
BERI: Investment Environment Risk Assessment Report 2006 66th th (3(3rdrd in Asia) in Asia)
IMD: 2005 World Competitiveness Ranking
1818thth(4th in Asia)(4th in Asia)
EIU: 2006 Business Environment Ranking (among 82 countries)
1919thth (3(3rdrd in Asia) in Asia)
Taiwan’s Competitiveness
13
Investment & Trade Figures
14
TAIWANTAIWANCapital Taipei
Location East Asia
Land 35, 980 km2
Population 22,876,527 (Dec. 2006)
Labor Force 10,616,000 (Nov. 2006)
Literacy 96.1%
臺灣
臺灣
TA
IWA
NT
AIW
AN
Basic StatisticsBasic Statistics
Investment & Trade Figures
15
Fact BookFact Book RankingRanking
GDP US$ 370.18 Billion
(2007 forecast) 23
GDP Real Growth Rate 4.14% (2007 forecast) 18
GDP (PPP) US$ 719 Billion (2007 forecast) 16
GDP (PPP)Per Capita US$ 30,874 (2007 forecast) 20
Industrial ProductionGrowth Rate
4.1% (Est. 2005) 82
Reserves of Foreign Exchange
US$ 265.14 Billion
(Nov.2006) 3
臺灣
臺灣
TA
IWA
NT
AIW
AN
Basic StatisticsBasic Statistics
Investment & Trade Figures
16
2007 Economic Growth Forecast2007 Economic Growth Forecast2006 Estimates 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%
臺灣
臺灣
TA
IWA
NT
AIW
AN
Basic StatisticsBasic Statistics
Investment & Trade Figures
Source: UN “World Economic Situation and Prospects 2007” annual briefing
17
Taiwan's External Trade Value 1994-2006 Taiwan's External Trade Value 1994-2006 (in Billion USD)(in Billion USD)
0
20
40
60
80
100
120
140
160
180
200
220
240
1994 1996 1998 2000 2002 2004 2006
Export
Import
Source: Bureau of Foreign Trade (BOFT), MOEA
BASIC STATISTICS
18
S. Korea5.19%Singapore
3.37%
Japan14.67%
China17.95%
U.S.A.12.90%
Hong Kong9.20%
Others27.23%
Australia1.89%
Saudi Arabia2.41%
Germany2.61%
Malaysia2.58%
Source: Bureau of Foreign Trade (BOFT), MOEA
BASIC STATISTICS
Taiwan's External Trade in 2006Taiwan's External Trade in 2006(Exports and Imports/By Country)(Exports and Imports/By Country)
19
Approved Overseas Taiwanese and Foreign InvestmentsApproved Overseas Taiwanese and Foreign Investments
1994-2006 1994-2006 (in Million USD)(in Million USD)
0
2000
4000
6000
8000
10000
12000
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Source: Investment Commission, MOEA
Basic StatisticsBasic Statistics
Investment & Trade Figures
20
Approved Overseas Taiwanese and Foreign Approved Overseas Taiwanese and Foreign Investments in 2006 Investments in 2006 (By Industry)(By Industry)
Others3.82%
Electrical &Electronic Mfg.
44.91%
PrecisionMachinery
1.63%
Trade, Wholesale& Retail6.02%
Other Service6.84%
Chemical Mfg.1.19%
Construction0.40%
Finance &Insurance
34.88%
Transportation0.31%
Source: Investment Commission, MOEA
Basic StatisticsBasic Statistics
Investment & Trade Figures
21
WHY INVEST IN TAIWAN
22
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
Why Invest in TaiwanWhy Invest in Taiwan
Strengths of TAIWANStrengths of TAIWAN
23
Distribution Map of Distribution Map of Industry ClustersIndustry Clusters
Automobile & Motorcycle
Automobile Parts
Faucet
Bicycle
Ceramics & China
Clothing/Fabrics
Dye Industry
Fabrics/Cloths
Fishnet
Floriculture
Foods
Glass
Hat
Hosiery
Machinery
Optoelectronics
Petrochemical
Saxophone
Screw
Semiconductor
Shipbuilding & Steel
Synthetic fiber & Yarn
Towel
Wood-carving
Why Invest in TaiwanWhy Invest in Taiwan
24
Complete supply chains of ICT productsComplete supply chains of ICT products
Provider of LCD MonitorsMarket Share: 68%Worth: $96.87 BILLION #1#1
Provider of Chip Foundry ServiceMarket Share: 69.2%Worth: $11.6 BILLION #1#1
Provider of Notebook PCsMarket Share: 78.3%Worth: $30.3 BILLION
Provider of Cable ModemsMarket Share: 73%Worth: $838 MILLION #1#1
Semiconductor PackagingMarket Share: 44.8%Worth: $5.5 BILLION
#1#1
Provider of Mask ROMsMarket Share: 91.2%Worth: $280 MILLION
Provider of Wireless LAN EquipmentsMarket Share: 88%Worth: $1.9 BILLION #1#1
Provider of ADSL ModemsMarket Share: 78%Worth: $1.1 BILLION #2#2
Provider of Analog ModemsMarket Share: 86%Worth: $227 MILLION
Source: IDB, Taiwan (2006)
#1#1
#1#1
#1#1
#1#1
Why Invest in Taiwan
25
Strong R&D CapabilitiesStrong 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
Why Invest in TaiwanWhy Invest in Taiwan
26
An Emerging Capital MarketAn Emerging Capital Market
Taiwan Stock Exchange (Dec 2006)
Listed Companies 691Market Capitalization US$572.8 Billion
Over-the-Counter / Venture Capital (Dec. 2006)
Listed Companies of OTC Market 534Listed Companies of OTC- Emerging Market 223Listed Venture Capital Companies 219
Source: Taiwan Stock Exchange Corp., GreTai Securities Market, Taiwan Venture Capital Association
Why Invest in TaiwanWhy Invest in Taiwan
27
An Emerging Capital MarketAn Emerging Capital Market
Banks (Dec 2006)
Domestic Banks / Branch Offices 43 / 3,276Foreign Banks / Branch Offices 33 / 65Citibank, Bank of America, Societe Generale, ABN AMRO, Deutch Bank, American Express, JP Morgan Chase, BNP, UBS, ING, MUFG, SMBC, HSBC, Bangkok Bank, etc.
Source: FSC, Executive Yuan
Major International Bank AlliancesForeign 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
Why Invest in TaiwanWhy Invest in Taiwan
28
An Abundant Resource of Skilled TalentsAn Abundant Resource of Skilled Talents
> 42,334 with Master’s Degree
> 2,165 with Ph.D. or Doctorate Degree
> 210,763 with Bachelor’s Degree
In 2005, graduates of higher education in Taiwan:
Recruiting overseas hi-tech talents to work in Taiwan
HiRecruit HiRecruitNumber of Recruits (2003-2005)
599
656 667
450
600
750
2003 2004 2005
2003
2004
2005
Source: Department of Statistics of Executive Yuan
Hi-tech +
Recruitment
Hire +
Recruit
HumanResource
http://hirecruit.gov.tw
Why Invest in TaiwanWhy Invest in Taiwan
29
Efficient Logistics OperationEfficient Logistics Operation
Advantageous geographic location in Asia-Pacific region
TaipeiTaipei 2h 55m2h 55m
SeoulSeoul 4h4h
TokyoTokyo 4h 15m4h 15m
ShanghaiShanghai 3h 25m3h 25m
Hong KongHong Kong 3h 05m3h 05m
ManilaManila 3h 30m3h 30m
SingaporeSingapore 4h 55m4h 55m
SydneySydney 6h 15m6h 15m
Average Average Flying TimeFlying Time to to8 major Asia-Pacific cities8 major Asia-Pacific cities
Average Average Maritime Navigation Maritime Navigation to to 6 major Asia-Pacific harbors6 major Asia-Pacific harbors
Tokyo Tokyo 110h110h
Shanghai Shanghai 78h78h
Hong KongHong Kong 54h54h
KaohsiungKaohsiung 53h53h
SingaporeSingapore 124h124h
ManilaManila 68h68h
Why Invest in TaiwanWhy Invest in Taiwan
30
Why Invest in TaiwanWhy Invest in Taiwan
Efficient Logistics OperationEfficient Logistics Operation
Ranking Harbor Country Capacity Growth Rate2005 2004 2005 2004
1 2 Singapore Singapore 2,319 2,133 8.7%
2 1 Hong Kong China 2,260 2,198 2.8%
3 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%
Unit: 10,000 TEUWorld Port Handling Capacity Ranking
Source: Ministry of Transport and Communications
31
Efficient Logistics OperationEfficient 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
Why Invest in TaiwanWhy Invest in Taiwan
32
Efficient Logistics OperationEfficient Logistics Operation
Transportation hubs to Southeast Asian countries, Europe and USA
34 cities in Asia 11 cities in Europe 14 cities in America
(Weekly) 582 Freighter Flights + 2,582 Passenger Flights
Source: CAA, MOTT
3 cities in Oceania 2 cities in Middle East Asia
Why Invest in TaiwanWhy Invest in Taiwan
33
Taichung Harbor
Kaohsiung Harbor
Keelung Harbor
C.K.S. Int’l AirportC.K.S. Int’l Airport
Central Int’l AirportCentral Int’l Airport
Kaohsiung Int’l AirportKaohsiung Int’l Airport
Efficient Logistics OperationEfficient Logistics Operation
Global Distribution Centers in Taiwan 13 multinational companies set up global distribution centers
Source: IDB, MOEA
Why Invest in TaiwanWhy Invest in Taiwan
34
Gateway to China and the ASEAN MarketsGateway to China and the ASEAN Markets
Taiwanese Investors in China(Approved by MOEA, Taiwan)
1090
1297
20041837
1490
1186
840
488641728
383490
934
1262
264237
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
~199
119
9219
9319
9419
9519
9619
9719
9819
9920
0020
0120
0220
0320
0420
0520
06
Inve
stm
ent
(Mill
ion
US
$)
0
500
1,000
1,500
2,000
2,500
Num
ber o
f A
pplic
ants
Source: DOIS, MOEA
Why Invest in Taiwan
35
Gateway to China and the ASEAN MarketsGateway to China and the ASEAN Markets
Source: DOIS, MOEA
Taiwanese Investors in China
5,305
11,631
4,8815,085
1,840858 1,056 869 498 358 496 192 285 218 175
1,688
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
Inve
stm
ent
(Mill
ion
US
$)
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Nu
mb
er o
f Cas
es
Investment Amount
Approved Cases
Why Invest in Taiwan
36
Gateway to China and the ASEAN marketsGateway to China and the ASEAN markets
Overseas Taiwanese Investors in the ASEAN Countries
0
500
1,000
1,500
2,000
2,500
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Nu
mb
er o
f In
vest
men
ts
Malaysia
Thailand
Vietnam
Indonesia
Philippines
Singapore
Cambodia
Sources: DOIS, MOEA
Why Invest in Taiwan
37
Why Invest in TaiwanWhy Invest in Taiwan
Gateway to China and the ASEAN markets Gateway to China and the ASEAN markets
Taiwanese Investors in Major ASEAN Countries Taiwanese Investors in Major ASEAN Countries (up to November 2006)(up to November 2006)
Source: DOIS, MOEA
1st in Vietnam US$8,050.06
3rd in Cambodia 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$53,657.19
Unit: Million US$
38
Overseas Taiwanese Investors in the ASEAN Countries
$-
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Ac
cu
mu
late
d I
nv
es
tme
nts
(M
illi
on
US
$)
Malaysia
Thailand
Vietnam
Indonesia
Philippines
Singapore
Cambodia
Why Invest in TaiwanWhy Invest in Taiwan
Gateway to China and the ASEAN marketsGateway to China and the ASEAN markets
Sources: DOIS, MOEA
39
Why Invest in Taiwan
Sourcing & Marketing through Taiwanese Sourcing & Marketing through Taiwanese
Based in
TAIWAN
Sourcing with TAIWANESE investors all over
ASIA
AccessEUROPEANMarkets
AccessASEAN
Markets
AccessCHINA
Market
Access
AMERICAN
Markets
40
96.8%
6.0%
30.6%
60.2%
3.2%
OtherTOP 20
US
CJ K
Europe
TOP 9
US IPO's
TOP 8
CJK IPOs
Top 3
European
IPOs
TOP 20
IPOs &
Growth
2005 41.0 19.3 3.7 64.0
2006 Est. 44.1 22.43 4.4 70.93
2006/2005
Growth (%)7.6% 16.2% 18.9% 10.83%
US, CJK and European Estimates of total Procurement in Taiwan 2005-2006
Source: Respective companies’ IPOs in Taiwan, OCIID/MOEA, MIC/III, Survey of IPO Purchasing in Taiwan in 2006, December 2006
IPO 2006 Procurement Breakdown
Why Invest in TaiwanWhy Invest in Taiwan
2006—Top 20 IPOs Total Procurement in Taiwan
Sourcing and Marketing Through TaiwaneseSourcing and Marketing Through Taiwanese
Unit: US$B
Total IPO procurement in 2006—US$73.3 billion
Top 20 IPO procurement in 2006—US$70.93 billion, a 10.83% increase from 2005
41
Why Invest in TaiwanWhy Invest in Taiwan
2006—Top 20 IPOs in Taiwan
Sourcing and Marketing Through TaiwaneseSourcing and Marketing Through Taiwanese
Source: Industrial Development Bureau, MOEA
United StatesChina, Japan,
KoreaEuropean
companies
42
Investment Cost Analysis
43
Tax structure Investment incentives Commercial offices costs Human resources (Hi-tech & working
labor by sector) Site Sections
Investment Cost AnalysisInvestment Cost Analysis
Enticing Incentives for InvestmentsEnticing Incentives for Investments
44
Classification of taxes and collection Authority
NTA/National Taxes City/County Tax Office/Municipal Taxes
Income Tax Land Tax
Estate and Gift Tax Building Tax
Business Tax (VAT and Non-VAT) Deed Tax
Commodity Tax Amusement Tax
Tobacco and Wine Tax Stamp Tax
Securities Transaction Tax Vehicle License Tax
Mining Lot Tax
Source: Deloitte& Touche Taiwan Compile
Investment Cost AnalysisInvestment Cost Analysis
Tax Structure (6-1) Tax Structure (6-1)
45
Profit-seeking enterprise income tax rates
Taxable Income Bracket (NT$) 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
Investment Cost AnalysisInvestment Cost Analysis
Tax Structure (6-2) Tax Structure (6-2)
46
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
Investment Cost AnalysisInvestment Cost Analysis
Tax Structure (6-3) Tax Structure (6-3)
47
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
Investment Cost AnalysisInvestment Cost Analysis
Tax Structure (6-4) Tax Structure (6-4)
48
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
United States S&A 5/31/1988 Date of signingSource: Taxation Agency, Ministry of Finance
Investment Cost AnalysisInvestment Cost Analysis
Tax Structure (6-5)Tax Structure (6-5)
Taiwan Double Taxation Agreements (Shipping or Air Transport)
49
Tax Incentives
Government Participation in Investment
Non-Tax Incentives
Low-Interest Loans
Web Information
Source: Industrial Development Bureau & Department of Industrial Technology, MOEA
Investment Cost AnalysisInvestment Cost Analysis
Investment Incentives Investment Incentives
50
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
Investment Cost AnalysisInvestment Cost Analysis
Tax Incentives Tax Incentives
51
11 Incentive for Research & DevelopmentIncentive for Research & Development
22 Incentive for Personnel TrainingIncentive for Personnel Training
33 Incentive for New Equipment or TechnologyIncentive for New Equipment or Technology
Company
Investment Cost AnalysisInvestment Cost Analysis
Tax Incentives Tax Incentives
52
Industry For Automation, Greenhouse Gas Emissions Reduction, and Promotion of an Enterprise’s Digital Efficiency
New Equipment
New Technology
Minimum Investment
Telecommunication, manufacturing, technical services
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
Incentives for New Equipment or Technology (Tax Reduction Rates)
Investment Cost AnalysisInvestment Cost Analysis
Tax Incentives Tax Incentives
53
Investment Tax Credit for ShareholdersInvestment Tax Credit for Shareholders
IncentiveIncentive
Five-Year Tax Holiday for CompaniesFive-Year Tax Holiday for Companies
IncentiveIncentive
Emerging, Important, and Strategic Industries
Investment Cost AnalysisInvestment Cost Analysis
Tax Incentives Tax Incentives
54
For more informationPlease go to
www.moeaidb.gov.tw
Information Industry
AerospaceIndustry
Biotechnology Industry
Digital Content
Industry
Emerging, Important, and Strategic Industries
Telecommu-nications Industry
Source: Industrial Development Bureau
Investment Cost AnalysisInvestment Cost Analysis
Tax Incentives Tax Incentives
55
Private Participation in Private Participation in Infrastructure ProjectsInfrastructure Projects
Private Participation in Private Participation in Infrastructure ProjectsInfrastructure Projects
Five-Year Tax Holiday for a Private Instituti
onIndirect Tax Incentiv
es
New Equipment or Technology or Research & Development or Personnel Training
Investment Tax Credit for Shareholders
Investment Cost AnalysisInvestment Cost Analysis
Tax Incentives Tax Incentives
56
A confirmation letter from the IDB & Tax return reviewed by the CPA1.
2.
3.
Please go to www.moeaidb.gov.tw/portal/english/regulation.jsp for detailed information
4.
Establishment of Logistics and Distribution Centers
The sales of products stored shall be over USD6,060,5610 for distribution
The export sales is over US$3,030,300 or 10% of the total sales
Investment Cost AnalysisInvestment Cost Analysis
Tax Incentives Tax Incentives
57
Free Trade Zone
Fre
e T
rad
e
Zon
e
Ship or airplane arrival
Area for simple processing, warehousing, and transshipping
Movement of imported or exported goods
Customs territory, bonded zone
In-depth value-addedprocessing area
BusinessService center
Movement of people
The breakthroughs:
1.Exemption from customs clearance
2.Tax exemption3.Granting selective
landing visa for foreign business personnel
4.Autonomous management
Investment Cost AnalysisInvestment Cost Analysis
Tax Incentives Tax Incentives
58
Facilitating business activities
(streamlining procedures for granting entry and issuing landing visas to business personnel; providing exhibition facilities and services)
Ease of financial operations
(permitting setup of holding companies for offshore investment, and allowing OBUs to handle foreign-currency transactions)
Rooting deeply in Taiwanwhile deploying globally
Within physical territory, but outside the customs territory
(autonomous management; exempted from customs checking and
inspection, as well as cargo tracking and escort)
Duty & tax exemption(exempt from customs duties,
commodity tax, sales tax, tobacco and wine excise tax)
Relaxing hiring ratiofor foreign workers
Allowing in-depth value-added processing
(e.g. assembling, packaging,
manufacturing)
Free Trade Zones
The incentives for attracting businesses to free trade zones
Investment Cost AnalysisInvestment Cost Analysis
Tax Incentives Tax Incentives
Source: CEDI, CEPT, Executive Yuan
59
Taxation measures for Free Trade Zones
Customsterritory
Other free trade zones
Gate
Bonded zones,EPZs,
Science parksFTZ
enterprise
FTZenterprise
Tax exemption for transshipping goods and facilities used by the businesses
In compliance with regulations for bonded goods
0 Sales TaxExempted taxes :
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
In compliance with regulations for exported goods
Gate
1. In compliance with regulations for imported goods
2. Special regulations for goods processed within FP and transported back to FP
Tax exempted
FreeTrade Zone
Investment Cost AnalysisInvestment Cost Analysis
Tax Incentives Tax Incentives
60
11
22
33
Establishment of Operation Headquarters
A confirmation letter from the IDB & Tax return reviewed by the CPA
Incentives for Provision of Talent
Please go to www.moeaidb.gov.tw/portal/english/regulation.jsp
for detailed information
Investment Cost AnalysisInvestment Cost Analysis
Tax Incentives Tax Incentives
61
Tax Exemption on the Payment of RoyaltyTax Exemption on the Payment of RoyaltyAA
Deferment on the Payment of Income Taxes on Stock Acquired in ExchangeDeferment on the Payment of Income Taxes on Stock Acquired in Exchange
BB
Stock Options on Stock Acquired in ExchangeStock Options on Stock Acquired in ExchangeCC
Acquisition of Related Technologies on Operation and Production
Investment Cost AnalysisInvestment Cost Analysis
Tax Incentives Tax Incentives
62
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
Investment Cost AnalysisInvestment Cost Analysis
Tax Incentives Tax Incentives
63
AA
BB
Measures for Encouraging the Development of Leading New Products
Corporate Participation in the Development of Technology
Investment Cost AnalysisInvestment Cost Analysis
Non-Tax Incentives Non-Tax Incentives
64
Industrial Technology DevelopmentProgram (ITDP)
Industrial Technology DevelopmentProgram (ITDP)A
B
A
B
A
B
Industrial Technology Development Alliance Program (ITDAP)
Strategic Service Oriented Research & Development Program (SRD)Industrial Technology InnovationCenter Program (MNCD)
Multinational Innovative R&D Centers in Taiwan (MNCF)Small Business Innovation ResearchProgram (SBIR)
Corporate Participation in the Developmentof Technology
Source: DOIT http://innovation.tdp.org.tw
Investment Cost AnalysisInvestment Cost Analysis
Non-Tax Incentives Non-Tax Incentives
65
And more…..
Loans for improving the
industrial structure or upgrading
industries
Loans for entire economical development
Loan-Tern Loans for promoting private
participation in infrastructure
projects
Loans for environmental protection and
energy conservation
Loans for strengthening
R&D & financing economic
development plans
Source: Development Fund, Executive Yuan
Investment Cost AnalysisInvestment Cost Analysis
Low Interest Loan Low Interest Loan
66
Development Fund of the Executive Yuanhttp://www.df.gov.tw/english/index3.html
Council for Economic Planning and development (CEPD), Executive Yuanhttp://www.cepd.gov.tw/encontent/index.jsp
Small and Medium Enterprise Administration, Ministry of Economic Affairshttp://www.moeasmea.gov.tw/eng/index.asp
Industrial Development Bureau, Ministry of Economic Affairshttp://www.moeaidb.gov.tw/portal/english/index.jsp
Website Information
Source: Development Fund, Executive Yuan
Investment Cost AnalysisInvestment Cost Analysis
Low Interest Loan Low Interest Loan
67
Not exceed 49% of the total equity of the investedenterprise
Not exceed 49% of the total equity of the investedenterprise
PrinciplesPrinciples
Historically focused on Industries such as petrochemicals & semiconductors
Historically focused on Industries such as petrochemicals & semiconductors
Priority-1Priority-1
Lately focused on 10 emerging industries such as information, telecommunications, aerospace, digital contents & biotech
Lately focused on 10 emerging industries such as information, telecommunications, aerospace, digital contents & biotech
Priority-2Priority-2
Currently on strengthening venture capital investment in innovative industries.
Currently on strengthening venture capital investment in innovative industries.
Priority-3Priority-3
Investment Cost AnalysisInvestment Cost Analysis
Government Participation in Investment Government Participation in Investment
Source: Development Fund, Executive Yuan
68
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
Investment Cost AnalysisInvestment Cost Analysis
Website Information Website Information
69
Major Asian City Property Rate
Investment Cost AnalysisInvestment Cost Analysis
01,000
2,0003,000
4,0005,000
6,0007,000
8,0009,000
10,000
Hong Kong
Tokyo
SeoulShanghai
Singapore
Beijing
Taipei
Bangkok
Jakart
a
Kuala Lumpur
2005 Q2 2006 Q2
Ren
t
(pin
g/m
on
th)
*Currency: NT$
*1 ping = 3.305 m²
Source: Jones Lang LaSalle Research
70
Area Occupancy rate Rent
(1 ping = NT$/month)
Hsin Yi District 77.0% $2,490
Min Sheng/
Tun Hwa North District87.1% $2,270
Tun Hwa South District
94.0% $2,320
Non-core Business District
90.5% $2,110
Taipei City 85.4% $2,330
2006 Grade A Office Market
*1 ping = 3.305 m²
Investment Cost AnalysisInvestment Cost Analysis
Source: Jones Lang LaSalle Research
71
Market Trend for Business Properties in Taipei City
Investment Cost AnalysisInvestment Cost Analysis
Source: Jones Lang LaSalle Research
$1,800
$2,000
$2,200
$2,400
$2,600
$2,800
$3,000
1992 1994 1996 1998 2000 2002 2004 2006 2008 F
Ren
t (p
ing
/mo
nth
)
0%
4%
8%
12%
16%
20%
24%
28%
Actual Contract Rate Vacancy Rate
*1 ping = 3.305 m²
*Currency: NT$
72
Investment Cost AnalysisInvestment 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$500~600/ping per month.
Please contact Jones Lang LaSalle Research in Taiwan for additional information:
Jones Lang LaSalle
www.joneslanglasalle.com.tw
Tel: 886-2-8758-9898Fax: 886-2-8757-9899
20F-1, Taipei 101 Tower, No. 7, Xinyi Rd., Sec. 5,
Taipei 11049, Taiwan
Source: Jones Lang LaSalle Research
73
Investment Cost AnalysisInvestment Cost Analysis
Key Labor Indicators
2005 2006 Economic Growth Rate (based on GDP)
3.63% 4.32 %
GNP Per Capita US$ 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)
74
Start-up SalaryStart-up Salary
Graduate school degree
University degreeCommercial
College degreeHigh school degree
(and below)
Administration NT$32,104 NT$28,238 NT$26,286 NT$22,463
Finance
AccountingNT$33,345 NT$29,334 NT$26,335 NT$22,652
Production
Quality controlNT$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
MarketingCustomer 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
Investment Cost AnalysisInvestment Cost Analysis
Source: Hrfun Management Consultant
75
Major Industries Monthly IncomeMajor Industries Monthly Income
Item unit: % NT$0~19,999NT$20,000
~29,999NT$30,000
~39,999NT$40,000
~59,999NT$60,000and above
Averagemonthly 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 5.45 NT$32,622Mining & quarrying 1.78 21.69 41.67 20.13 14.73 NT$38,671Manufacturing 11.12 37.72 29.48 16.09 5.58 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$45,909Source: Directorate-General of Budget, Accounting and Statistics
Investment Cost AnalysisInvestment Cost Analysis
76
Investment Cost AnalysisInvestment Cost Analysis
Application Procedure Application Procedure
77
WHERE TO INVEST IN TAIWAN
78
WHERE TO INVEST IN TAIWAN
• Science & Industrial Parks
• Biotech Parks
• Free Trade Zones
• Export Processing Zones (EPZ)
• Environmental Science & Technology Parks
(ESTP)
• Software Parks
79
Where to Invest in Taiwan
【 6-1 】 Science & Industrial ParksScience & Industrial Parks
Central Taiwan Science Park (509 ha.)
Optoelectronics, IC, PC/Peripherals, Telecom, Machinery, Biotechnology
Southern Taiwan Science Park(1,038 ha.)
Optoelectronics, Telecom, IC, PC/Peripherals, Biotechnology
Hsinchu Science Park(632 ha.)
Optoelectronics, Biotechnology, IC,PC/Peripherals, Machinery, Telecom
http://www.sipa.gov.tw
http://www.ctsp.gov.tw
http://www.stsipa.gov.tw
Taichung Harbor
Kaohsiung Harbor
Keelung Harbor
C.K.S. Int’l AirportC.K.S. Int’l Airport
Central Int’l AirportCentral Int’l Airport
Kaohsiung Int’l AirportKaohsiung Int’l Airport
http://www.nsc.gov.tw
80
Keelung Harbor
【 6-2 】 Biotech ParksBiotech Parks
Hsinchu Biomedical Science Park
Changhua Flower Plantation Park
Chiayi Spice and Herb Biological Technology Park
Tainan Orchid Plantation Park
Ilan Oceanic Biotechnology Park
Kaohsiung Biotechnology Park (STSP)
Pingtung Agricultural Biotechnology Park
http://www.coa.gov.tw
Where to Invest in Taiwan
81
【 6-3 】 Free Trade ZonesFree Trade Zones
http://www.cepd.gov.tw
Keelung Harborhttp://www.klhb.gov.tw
Taipei Harborhttp://www.tpport.gov.tw
Taichung Harborhttp://www.tchb.gov.tw
Kaohsiung Harborhttp://www.khb.gov.tw
C.K.S. Airporthttp://www.cksairport.gov.tw
Where to Invest in Taiwan
82
【 6-4 】 Export Processing Export Processing Zones Zones
Pingtung EPZ (124.1 ha.)
Linkuang EPZ (9.0 ha.)
Kaohsiung EPZ (72.3 ha.)
Nantze EPZ (97.8 ha.)
Chungkang EPZ (177 ha.)
Taichung EPZ (26.2 ha.)
http://www.epza.gov.tw
Chengkung Logistics Park (40.3 ha.)
Kaohsiung Software-based Technology Park (54.5 ha.)
Taichung Harbor
Kaohsiung Harbor
Keelung HarborC.K.S. Int’l AirportC.K.S. Int’l Airport
Central Int’l AirportCentral Int’l Airport
Kaohsiung Int’l AirportKaohsiung Int’l Airport
Where to Invest in Taiwan
83
Taichung Harbor
Kaohsiung Harbor
Keelung Harbor
C.K.S. Int’l AirportC.K.S. Int’l Airport
Central Int’l AirportCentral Int’l Airport
Kaohsiung Int’l AirportKaohsiung Int’l Airport
【 6-5 】 Environmental Science & Technology Parks (ESTP)Environmental Science & Technology Parks (ESTP)
Taoyuan ESTP31 hectares
Hualien ESTP22.01 hectares
Tainan ESTP30 hectares
Southern ESTP 40.11 hectares
http://ivy3.epa.gov.tw/H/ESTP/en/index.htm
Where to Invest in Taiwan
84
【 6-6 】 Software ParksSoftware Parks
Taichung Harbor
Kaohsiung Harbor
Keelung Harbor
C.K.S. Int’l AirportC.K.S. Int’l Airport
Central Int’l AirportCentral Int’l Airport
Kaohsiung Int’l AirportKaohsiung Int’l Airport
http://www.taipei.gov.tw
http://www.kaohsiung.gov.tw
Nankang Software ParkLocation: Taipei City
8.2 hectares
Kaohsiung Software Tech ParkLocation: Kaohsiung City
8.9 hectares
Where to Invest in Taiwan
85
TAITRA’sBusiness Alliance Services
TAITRA Helps You Build Strategic Partnership TAITRA Helps You Build Strategic Partnership
to Shape Tomorrowto Shape Tomorrow
86
TAITRA
Partially supported by the government and
commercial/industrial associations
Various trade-related services tailor-made to meet business people’s
needs
Comprehensivedatabase listing of
Taiwan manufacturersand country information
Direct marketing channels through45 branch offices around the world
TAITRA’s Business Alliance ServicesTAITRA’s Business Alliance Services
TAITRA’s Roles and Functions TAITRA’s Roles and Functions
87
11 Information for setting up operations Information for setting up operations
22 Arranging fact-finding tours Arranging fact-finding tours
33 Recommending strategic partnersRecommending strategic partners
44 Free CPA consultation for 1 hourFree CPA consultation for 1 hour
55 Evaluation for site selectionsEvaluation for site selections
TAITRA’s Business Alliance ServicesTAITRA’s Business Alliance Services
TAITRA’s Roles and Functions TAITRA’s Roles and Functions
88
STEP3
R&D
Marketing &
Branding
STEP3
R&D
Marketing &
Branding
STEP2
LogisticsSTEP2
Logistics
STEP1
AssemblySTEP1
Assembly
Innovation
Innovation
Value Chain
Value Chain
TAITRA’s Business Alliance ServicesTAITRA’s Business Alliance Services
Positioning of FDI Positioning of FDI
89
Target: private equities &industrial integrationIn cooperation with:Investment bankingCPA
Target: private equities &industrial integrationIn cooperation with:Investment bankingCPA
M&AM&A
Int’l Distribution CenterHeadquartersR&D & Innovation Center
Int’l Distribution CenterHeadquartersR&D & Innovation Center
OthersOthers
In cooperation with:ITRIIncubation centersIndustrial promotion entities
In cooperation with:ITRIIncubation centersIndustrial promotion entities
Technology TransferTechnology Transfer
Target: Integration ofresourcesIn cooperation with:TAITRA’s databasesIndustrial associations
Target: Integration ofresourcesIn cooperation with:TAITRA’s databasesIndustrial associations
JVJV
TAITRA’s Business Alliance ServicesTAITRA’s Business Alliance Services
Strategic Investments Strategic Investments
90
AmericaUSA, Canada
EuropeUK, Germany, Holland, France, Italy
Asia Japan, HK, Korea, India
OceaniaAustralia
TAITRA’s Business Alliance ServicesTAITRA’s Business Alliance Services
Target Market Target Market
91
•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!A one-stop service solution!
TAITRA’s Business Alliance ServicesTAITRA’s Business Alliance Services
TWTC International Business Center (IBC) TWTC International Business Center (IBC)
Instant Furnished Office
92
Standard OfficeStandard Office
Complete furnished office:42 m2
Desks, chairs, cubicle dividersTelephoneTable-top drinking water dispenserFlame-retardant carpetPC & printer
LoungeLounge
123 m2
Conference space
TAITRA’s Business Alliance ServicesTAITRA’s Business Alliance Services
TWTC International Business Center (IBC) TWTC International Business Center (IBC)
93
TAITRA’s Business Alliance ServicesTAITRA’s Business Alliance Services
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
In order to provide a better service that caters to your business, we strongly recommend the
provision of a business plan upon contacting us
94
Contact Person Area-in-Charge Contact Information
Ms. Emilia Shih Section Manager Ext.: 1371E-mail: [email protected]
Ms. Sally Sha France, Germany, the Netherlands
Ext.: 1341E-mail: [email protected]
Ms. Jenyow Wang Canada (Vancouver), USA (San Francisco & Miami)
Ext.: 1340E-mail: [email protected]
Ms. Angelica Hao China, India, Korea, UAE Ext.: 1320E-mail: [email protected]
Ms. Stella Lin Italy, United Kingdom, Scandinavian countries
Ext.: 1349E-mail: [email protected]
Ms. Catherine Fan Canada (Toronto)USA (Chicago & New York)
Ext.: 1347E-mail: [email protected]
Ms. Janet Hsu Japan Ext.: 1321E-mail: [email protected]
Ms. Claudia Lee Australia, Hong Kong, Southeast Asia
Ext,: 1389E-mail: [email protected]
TAITRA’s Business Alliance ServicesTAITRA’s Business Alliance Services
Our Team Members Our Team Members
95
Contact Us
Taiwan External Trade Development CouncilTaiwan External Trade Development Council
5th Fl., 333 Keelung Road, Sec. 1, Taipei 11012, Taiwan, R.O.C.5th Fl., 333 Keelung Road, Sec. 1, Taipei 11012, Taiwan, R.O.C.Tel: +886-2-27255200 Tel: +886-2-27255200 Fax: +886-2-27576610Fax: +886-2-27576610E-mail: [email protected]: [email protected]://www.taiwanalliance.com.twhttp://www.taiwanalliance.com.twhttp://www.taiwantrade.com.tw http://www.taiwantrade.com.tw
Business Alliance SectionBusiness Alliance SectionStrategic Marketing DepartmentStrategic Marketing Department
96
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