Taiwan: Investing

FDI in Figures

Taiwan is an important destination for Foreign Direct Investment (FDI). According to the UNCTAD 2011 World Investment Report, the island ranks fifteenth in terms of FDI attractiveness for 2011-2012. The island enjoys strong growth sustained by the dynamism of the entire region, a population with high purchasing power and economy with high technological focus. After FDI declined due to the world economic crisis, growth resumed in 2011 and should be maintained despite the unfavorable global economic situation.

Foreign Direct Investment	2008	2009	2010
FDI Inward Flow (million USD)	5,432	2,805	2,492
FDI Stock (million USD)	45,458	55,811	64,288
Performance Index*, Ranking on 141 Economies	116	122	-
Potential Index**, Ranking on 141 Economies	22	-	-
Number of Greenfield Investments***	87	87	-
FDI Inwards (in % of GFCF****)	6.4	6.2	-
FDI Stock (in % of GDP)	11.3	12.7	-

Source: UNCTAD - Last Available Data.

Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field Investments Are a Form of Foreign Direct Investment Where a Parent Company Starts a New Venture in a Foreign Country By Constructing New Operational Facilities From the Ground Up. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.

FDI Inflows By Countries and Industry

Main Investing Countries	2011, in %
USA	19.3
The Carribean	17.1
The Netherlands	16.2
Japan	14.6
UK	6.0
Singapore	5.9
Hong Kong	4.9

Main Invested Sectors	2011, in %
Finance and Insurance	36.8
Manufacturing sector	29.5
Whole sale and retail trade	15.1
Real Estate	4.9

Source: Invest in Taiwan - Last Available Data.

Form of Company Preferred By Foreign Investors: Public limited company.
Form of Establishment Preferred By Foreign Investors: Joint venture in the case of a partnership.
Main Foreign Companies: Alstom, Daewoo International, Dassault Aviation, Intel Microelectronics Asia Ltd, Levi Strauss USA LLC, American Express Bank Ltd, etc.
Sources of Statistics: National statistics

Why You Should Choose to Invest in Taiwan

Strong Points: The country's strong points are:
- A consideralble industrial and logistical fabric;
- An abundance of a skilled labor force;
- Strong R&D capabilities;
- An emerging capital market;
- Efficient logistics operations;
- A strategic geographical location, the country is an entryway to China and the ASEAN markets.
Weak Points: The country's weak points are:
- The lack of a direct communication path with China;
- A limited domestic market.
Government Measures to Motivate or Restrict FDI: New regulations provide preferential tax incentives to foreign professionals employed in Taiwan, and are aimed at improving the overall environment for recruiting and attracting professionals from other countries. The regulations, which address a general shortage of professional talent, are expected to benefit up to 3,000 foreign professionals in Taiwan.
More information can be obtained on the website of Invest in Taiwan.

Protection of Foreign Investment

Bilateral Investment Conventions Signed By Taiwan: With Argentina, Belize, Burkina Faso, Costa Rica, Dominica, El Salvador, Guatemala, Honduras, India, Indonesia, Liberia, Malaysia, Macedonia, the Marshall Islands, Nicaragua, Nigeria, Panama, Paraguay, the Philippines, Saudi Arabia, Senegal, Singapore, Swaziland, Thailand, Malawi, and Vietnam.
International Controversies Registered By UNCTAD: With EU on recordable compact discs.
Member of the Multilateral Investment Guarantee Agency: No.

Country Comparison For the Protection of Investors

	Taiwan	East Asia & Pacific	United States	Germany
Index of Transaction Transparency*	7.0	5.2	7.0	5.0
Index of Manager’s Responsibility**	4.0	4.5	9.0	5.0
Index of Shareholders’ Power***	5.0	6.3	9.0	5.0
Index of Investor Protection****	5.3	5.3	8.3	5.0

Source: Doing Business - Last Available Data.

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.

Procedures Relative to Foreign Investment

Freedom of Establishment: Taiwan no longer has a list of permitted investments, but maintains a "negative" list of industries closed to foreign investment to maintain security and environmental protection. Liberalization has reduced that list to less than one percent of manufacturing categories and less than five percent of service industries. More information on US department website.
Acquisition of Holdings: A majority holding interest in the capital of a Taiwanese company is legal.
Competent Organization For the Declaration: Investment Commission MOEA

Office Real Estate and Land Ownership

Possible Temporary Solutions: Information available on Invest in Taiwan (investment guide).
The Possibility of Buying Land and Industrial and Commercial Buildings: Information available on Invest in Taiwan (investment guide).
Risk of Expropriation: No foreign-invested firm has ever been nationalized or expropriated in Taiwan. Under Taiwan law no venture with 45% or more foreign investment can be nationalized for a period of 20 years after the venture is established. Expropriation can be justified only for national defense needs and "reasonable" compensation must be given.

Investment Aid

Forms of Aid: "Industrial Technology Development Program"
Privileged Domains: Manufacturing, IT, electronics.
Privileged Geographical Zones: The first free trade/free port zone began operation at Keelung, Taiwan's northern port, in November 2004. Since the, another four have been established. These four are located at Taoyuan International Airport and the international harbors in Kaohsiung, Taichung, and Taipei. Taiwan authorities have relaxed restrictions on movement of merchandise, capital and personnel into and out of such zones.
Taiwan has also over 70 industry clusters devoted to manufacturing products like Hsin Chu, Tainam.
Free Zones: Kaohsiung Harbor, Taichung Harbor, Taipei Harbor, Keelung Harbor, and Taoyuan International Airport.
Organizations Which Finance: Visit the website Invest in Taiwan.

Investment Opportunities

The Key Sectors of the National Economy: IT sector, IC sector, Electrical sector, etc.
High Potential Sectors: Tourism.
Tenders, Projects and Public Procurement: Tenders Info, Tenders in Taiwan Province of China
Asian Development Bank, Procurement Plans in Asia
DgMarket, Tenders Worldwide

Sectors Where Investment Opportunities Are Fewer

Monopolistic Sectors: Energy.
Sectors in Decline: Agri-food and cheap textiles (competition from the Chinese workforce).

Finding Assistance For Further Information

Investment Aid Agency: Invest in Taiwan.
Other Useful Resources: MOEA
Doing Business Guides: Invest in Taiwan (investment guide).
Taiwan Commercial Guide 2010 - Buy USA

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