Doing Business In Taiwan

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Why Taiwan?

Taiwan, formally known as the Republic of China, is strategically located at the heart of the Asia-Pacific region. Over the last three decades, it has transformed itself from an authoritarian one-party state, with an agrarian economy based on rice and sugar, into a thriving capitalist economy with a democratically elected government. Taiwan is now the 16th-largest trading nation in the world, according to the World Trade Organisation, with an economy founded on high-tech and creative industries.

Taiwan's economy grew by 10.8 per cent in 2010, the strongest annual growth since 1987. As the rest of the world slowly emerges from the economic downturn, domestic demand in Taiwan is booming and the latest figures indicate that it is entering a thriving period of growth. Over the last three decades, Taiwan has averaged annual GDP growth of around 8 per cent. The country's economic success was, initially, based on the manufacture of low-technology goods. However, these labour-intensive industries have, increasingly, relocated to areas with a lower cost base, primarily China, and Taiwan has successfully moved into higher value-added manufacturing and exports, mainly in electronics and computers.

Taiwan leads the world in the manufacture of computer-related products and semiconductors. Before the global recession, high-tech products made up around 51.6 per cent of the country's exports, compared to 29 per cent in South Korea and 20 per cent in Japan. Accounting for 17 per cent of the global market, Taiwan's photonics industry is estimated to be worth US$90 billion in 2011. It ranks as the leader in the world for production volumes and second in terms of production value.

Taiwan has also become a global centre for R&D and a growing number of multinational companies (such as Intel, Microsoft, Sony and HP) are choosing it as the focal point for R&D in the Asia-Pacific region. The World Economic Forum's World Competitiveness Report ranks Taiwan eighth in the world for R&D.

It has developed one of the most advanced telecommunications networks in Asia and wireless penetration has almost reached saturation levels, thanks to a comprehensive infrastructure of Wi-Fi, WiFly, WiMAX and 3.5G. The country aims to become the first in the world that is entirely wireless, with broadband access ports located throughout the island. Almost half of the top 100 IT companies in Asia have a presence in Taiwan.

According to the International Monetary Fund, Taiwan's economy is now the 26th-largest in the world. In 2010, it was ranked 13th in global competitiveness rankings (World Economic Forum).

The Country at a Glance

Full name: Republic of China (Taiwan)
Capital: Taipei
Other main cities: Taichung, Kaohsiung
Area: 36,188 sq. km/13,972 sq. miles (roughly the size of Wales)
Population: 23.03 million (2010)
Major languages: Mandarin Chinese (official language), Min Nan Chinese
(Taiwanese) and Hakka. English and Japanese are also widely spoken
Ethnicities: Han Chinese and indigenous minority of Taiwanese aborigines
Life expectancy: 73 years (men), 79 years (women)
Major religions: Taoism, Buddhism, Christianity
Monetary unit: New Taiwan dollar (NT$)
Nominal GDP: US$427 billion
GDP per capita: US$19,155
World Bank ease of doing business ranking: 33

A leading choice for investors

Taiwan's strategic location is one of its most significant advantages for international investors. It is ideally situated adjacent to China and within easy reach of major commercial centres and ports in the ASEAN (Association of Southeast Asian Nations) region. For example, the sailing time from Taiwan's largest port, Kaohsiung, to five of the largest Asia-Pacific ports (Hong Kong, Manila, Shanghai, Tokyo and Singapore) is just over two days. This makes Taiwan a favoured choice for headquarters in the Asia‑Pacific region, as well as R&D facilities.

With direct flights having been introduced in 2008, travellers can now fly from Taiwan to major cities in China with a journey time of just one to two hours.

The continuing liberalisation of links across the Taiwan Strait means that foreign companies are increasingly choosing Taiwan both as a market in its own right and as a stepping stone into China. Taiwan signed the Economic Cooperation Framework Agreement (ECFA) with China in 2010 to reduce tariffs and commercial barriers between the two markets. This is expected to boost bilateral trade significantly.

Taiwan's pro-investment policies and incentives are another major pull for investors. Free competition is encouraged and there are price controls only on basic necessities. Qualified foreign companies can obtain listings on the Taiwan stock market by listing their shares or issuing Taiwan depositary receipts. The Taiwanese government encourages mergers and acquisitions that serve the public interest and protection is provided to foreign patents, trademarks and copyrights.

Since Taiwan joined the World Trade Organisation in 2002, it has opened up its domestic market to international investment and there are now very few industries that are closed to foreign investors (talk to UKTI Taiwan for more details). Around 300 UK companies already have a significant presence in Taiwan, including HSBC, Standard Chartered Bank, Barclays, Arup and Mott Macdonald. UK retailers have been well-received, with fashion labels such as Burberry, Vivienne Westwood, Paul Smith, Dunhill, Aquascutum, Ted Baker, Gieves & Hawkes, Oasis and French Connection all gaining a foothold in the marketplace. Smaller, specialist UK companies have also invested in Taiwan, including suppliers to the vast semiconductor industry and specialist chemical company, Epichem.

The Taiwanese government is actively promoting the development of six emerging industries: biotechnology; green energy; culture and creativity; medicine and healthcare; tourism and high-end agriculture. It is also focusing on four "intelligent" industries: smart electric vehicles; smart green buildings; cloud computing and patent commercialisation. There are incentives available to attract foreign and domestic investors in these priority sectors.

You can find more information on the Taiwanese government's Invest in Taiwan website at

Specific details of key investment opportunities in Taiwan are listed on page 10, under 'Opportunities in Taiwan for UK companies'.

Strong bilateral trade

Most of the world, including the UK, does not recognise Taiwan as a sovereign entity separate from China, due to the political disagreement between the two. This has led to diplomatic isolation for Taiwan, but, despite this, the country enjoys a strong trade and investment relationship with the UK.


Taiwan is the UK's 44th-largest export market. Only two other countries in Europe export more to Taiwan. In 2010, UK exports to the country were worth £1.05 billion, up 40 per cent on 2009. The UK's principal exports to Taiwan are: electrical machinery; beverages; industrial machinery and equipment; metalliferous ores and metal scrap; medicine and pharmaceuticals.


Imports from Taiwan to the UK were worth £2.9 billion in 2010, up 38 per cent on the previous year. Taiwan is the 32nd-largest supplier of goods to the UK. The UK's principal Taiwanese imports are: office machinery and automatic data processing systems; telecoms and sound recording/reproducing equipment; electrical machinery and miscellaneous manufactured articles.

Inward investment

There are currently around 180 Taiwanese companies with an active presence in the UK. In 2009/10, 13 more Taiwanese firms established a presence in the UK, including specialists in ICT, biotechnology and healthcare. This helped to create and safeguard over 200 jobs. Seventy per cent of all Taiwanese investment in Europe comes to the UK and nine of Taiwan's leading financial institutions are represented here, including the Bank of Taiwan, the Central Bank, the Financial Supervisory Commission, Chang Hwa Commercial Bank and SinoPac Securities.

UK Trade (Good Only) With Taiwan 2003 - 2010 (£ Millions)

Logo Spacer Small 2003 2004 2005 2006 2007 2008 2009 2010
UK exports 903,977 952,909 944,892 912,853 938,618 836,298 750,472 1,048,840
UK imports 2,395,505 2,254,791 2,267,258 2,390,453 2,421,774 2,482,862 2,095,982 2,892,369

Top Ten UK Imports of Goods To Taiwan in 2010 (£ Millions)

Item 2010
Telecoms and sound recording and reproducing equipment 597
Electrical machinery and appliances 313
Office machines and adp machines 272
Road vehicles (including air cushion vehicles) 271
Miscellaneous manufactured articles 251
Manufactures of metal 230
General industrial machinery and equipment 97
Power-generating machinery and equipment 77
Professional, scientific and controlling instruments 67
Furniture and parts thereof; bedding, mattresses etc 59

Top Ten UK Exports of Goods to Taiwan in 2010 (£ Millions)

Item 2010
Metalliferous ores and metal scrap 123
Beverages 110
Power-generating machinery and equipment 95
Medicinal and pharmaceutical products 90
General industrial machinery and equipment 64
Machinery specialised for particular industries 58
Electrical machinery and appliances 57
Miscellaneous manufactured articles 43
Professional, scientific and controlling instruments 38
Iron and steel 36

Source: BIS analysis of HM Revenue & Customs data

Opportunities in Taiwan for UK companies

UK Trade & Investment (UKTI) has identified significant opportunities in the following sectors in Taiwan:

• Aerospace - Taiwanese authorities plan to increase aviation-related investment to £666 million by 2013, with the total value of annual aerospace production expected to reach £2 billion by that year. Taiwan's Ministry of Transportation and Communications (MOTC) is keen to develop the aerospace industry and upgrade the capability for local manufacturers to carry out Original Equipment Manufacturing (OEM) work for international aerospace companies.

• Agriculture - The Taiwanese government is investing £500 million in agriculture and rural development by 2012 as part of its High-End Agriculture and Health Excellence Programme. This will concentrate on food safety and traceability, genetic technology, leisure and floral exports. There are opportunities for UK companies in: marketing and consultancy; food safety and traceability; genetics and animal welfare; and orchid‑growing joint ventures.

• Clothing and accessories - Italian and French designer labels dominate the Taiwanese market, while the market for young girls' fashion is strongly influenced by Japanese and Korean styles and trends. Due to the increasing demand for quality products, there are opportunities for UK companies in contemporary men's and women's wear, premium accessories and sportswear.

• Telecommunications - Taiwan has one of the most advanced telecommunications sectors in Asia. The mobile and wireless communications market is dominated by three key players - Chunghua Telecom; Taiwan Mobile and FarEastone - which are keen to expand into telehealth, cloud computing and smart grid. The fourth player, VIBO Telecom, which entered the market after the other three, hopes to distinguish itself by developing innovative business models in the fields of voice and data transmission.

• Construction - The Taiwanese government has announced a number of large-scale public infrastructure projects, which will generate opportunities for UK companies over the next eight years. The main projects are: rapid transit networks in Taiwan's main cities; railway mainline upgrades; Kaohsiung Free Port and Eco‑Park; the Asia‑Pacific Maritime and Air Logistics Centre in Taichuang; Taoyuan International Air City; urban regeneration and rural revitalisation projects across the country; and an island‑wide sewage system.

• Creative industries - The expansion of the Cultural & Creative Industries (CCI) in Taiwan is a priority area and is one of the six key emerging sectors selected by Taiwanese authorities for national development. There are estimated to be over 49,450 CCI businesses in Taiwan, providing some 195,160 jobs. The Taiwanese government is investing more than £107.7 million under the Creative Taiwan framework. This is creating opportunities for UK companies in: product design, incorporating packaging design/industrial design and branding counselling services; architectural design and planning; creative education and training; and the experience economy, tied in with digital content development.

• Education and skills development - Due to its relatively small geographical area and short supply of natural resources, Taiwan's economic progress hinges largely on its ability to develop human resources. It is therefore strongly committed to the improvement of education and skills. Under the Intelligent Taiwan project, launched in 2009, a total budget of £6.64 billion will be allocated to this by 2016, covering 13 major individual project areas such as English-language learning, Continual Personal Development (CPD), IT education, digital learning, vocational training and teaching-quality improvement in higher education. This is creating outstanding opportunities for UK companies active in these areas.

• Electronics, semiconductors and display - Taiwan leads the world in the production of PCs, notebook PCs, Soho routers, cable modems, optical disk drives, modems, switches, hubs and WLAN, as well as being a key player in mobile handset production. Taiwanese ICT companies mainly use China as their manufacturing base, keeping their headquarters, R&D and sales departments in Taiwan. Taiwan has a worldwide share of over 90 per cent of the OEM/ODM (Original Design Manufacturer) market. It also dominates the semiconductor chip supply chain. There are opportunities for UK companies in cloud computing, e-health and mobile health, green IT, telematics, software applications on mobile devices and WiMAX.

• Environment - As one of the most densely populated islands in the world, Taiwan's usable land area is very limited. The Taiwanese government spends around £14 million a year on tackling soil and groundwater contamination and this is set to double over the next few years, adding to investments by the private sector. Taiwan is actively seeking international partners with expertise in this field. In addition, the Taiwan Environmental Protection Administration (EPA) focuses on five key areas: promoting sustainability; reducing carbon emissions; recycling; eliminating pollution and promoting healthy, sustainable lifestyles.

• Financial services - Taiwan's financial services industry, which accounts for 10 per cent of its GDP, has changed greatly in the past couple of decades, becoming international and liberalised. Currently, there are 15 financial holding companies and 37 domestic banks in Taiwan (3,264 branches in total). Thirty two foreign banks have been granted licences to date, and have established around 140 branches in Taiwan. Some 39 securities investment trust enterprises, 23 non-life insurance companies and 29 life insurance companies currently do business in Taiwan. UK financial services firms active there include: HSBC, Standard Chartered Bank, Barclays, Schroders, Aberdeen, PCL Life and First-Aviva (a joint venture between First Financial Holding and Aviva). High rates of savings and ongoing financial liberalisation make Taiwan an attractive market for capital. There are opportunities for UK companies in wealth management, foreign currency securities exchange, pension fund management, public private partnership and financial services training.

• Food and drink - Food and drink is the fifth-largest industry in Taiwan and one of its fastest-growing sectors. Some 40 per cent of goods consumed in Taiwan are imported. The continued expansion of 'upmarket' supermarkets on the island has prompted importers to look further afield for value-added products, particularly to European countries. Currently, over 80 per cent of the items offered by these supermarkets are imported, creating opportunities for UK companies in: ready-to-eat food and drinks; alcoholic beverages; confectionery; organic products and health foods.

• Healthcare - Taiwan imported around £1.1 billion of medical devices in 2010. There are many opportunities for UK companies supplying high-end pharmaceutical products and medical equipment. There are also opportunities in healthcare informatics/telecare services and long-term care provision for the elderly and disabled, as Taiwan is an ageing society.

Market Strengths

These are the essential facts that companies 
doing business in Taiwan need to know:

• Taiwan is the world's biggest manufacturer 
of computer-related products and 

• The World Economic Forum ranks Taiwan 
eighth in the world for R&D and 13th (of 133 
economies) for global competitiveness.

• Taiwan's economy grew by 10.8 per cent in 
2010 - the strongest annual growth for more 
than 20 years.

• Taiwan is strategically located at the heart of
the Asia Pacific, around 90 miles off the coast 
of mainland China and within easy reach of all
major ASEAN commercial centres.

• Since joining the World Trade Organisation 
in 2002, Taiwan has opened up its domestic 
market to international investment.

• Taiwan has a strong trade and investment 
relationship with the UK - only two other 
European countries export more to Taiwan 
than the UK. Imports to the UK from Taiwan 
were worth some £2.9 billion in 2010.

• Low carbon economy - Over the next five years, the Taiwanese government will invest more than £50 billion in promoting the green economy. Fifty pilot low carbon communities will be selected by the end of 2011 and six low carbon cities by 2014, as part of a plan to reduce carbon emissions and gradually  turn Taiwan into a low carbon nation. By 2020, the island will be divided into four low carbon living spheres in northern, central, southern and eastern Taiwan. There are opportunities for UK companies involved in: green energy, energy conservation installations and industry support (solar PV, LED PV lighting, wind power, biomass, hydrogen and fuel cell), energy communication and information and electric vehicles.

• Marine - Taiwan's yacht industry is export-oriented and imported hardware components and accessories are widely used in finished yachts. Potential opportunities for UK companies include: hardware components and accessories/auxiliaries; naval architecture/exterior and interior design; deck hardware; energy saving and green power; and innovative superyacht equipment and services.

• Power - Taiwan recognises the importance of developing more green‑energy projects and welcomes the input of UK renewable energy suppliers. There are opportunities for companies that specialise in offshore wind power, biomass and marine energy. There are also significant opportunities for consultants specialising in energy privatisation.

• Transport - The Taiwanese government has announced 12 prioritised public construction projects, with a total budget of £66.5 billion over the next eight years. The first priority is to build a fast and efficient island-wide transportation network. There are opportunities for UK companies in: consulting engineering, signalling, station design and rolling‑stock parts.

For more details on these and other commercial opportunities, talk to UKTI Taiwan.

Source - UKTI


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