Transcript Taiwan Investment Environment Department of Investment Services Ministry of Economic Affairs June 2015

Taiwan Investment Environment
Department of Investment Services
Ministry of Economic Affairs
June 2015
Index
I. Economic Development
II. Foreign Investment
III. Investment Environment
IV. Investment Incentives
V. Industrial Development and
Investment Opportunities
VI. Investment Services
1
I. Economic Development
Major Economic Indicators
2
Land
36,192 km
Population
23,462,517 (2014/12)
GDP
US$535.5 billion (2014)
Per-capita
Income
US$22,823 (2014)
Economic
Growth Rate
3.74% (2014);
3.78% (2015/est.)
Unemployment
Rate
3.62% (2015/5)
Inflation
1.20% (2014)
Forex Reserves
US$418.96 billion (2015/05)
2
II. Foreign Investment in Taiwan
Foreign Investment in the Past 10 Years
18
3,577
Amount (US$billion)
16
15.36
Cases
14
2,283
2,267
10
1,846
1,078
3.58
1,149
1,131
3.95
4.23
2,500
2,042
1,845
8.23
8
4
3,000
2,738
12
6
3,500
3,206
13.97
4,000
2,000
1,711
4.96
4.80
5.77
5.56
1,500
4.93
1,000
3.81
2
500
0
0
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Source: Investment Commission, MOEA
3
Foreign Investment by Country, 1952~2014
Country
Amount
(US$100mil)
Ratio%
Cases
Ratio%
British Possessions in the
Caribbean
242.22
18.33
5,656
14.24
United States
234.99
17.78
5,586
14.07
Holland
207.03
15.67
565
1.42
Japan
182.69
13.82
8,616
21.70
Singapore
77.48
5.86
1,957
4.93
UK
72.12
5.46
791
1.99
Hong Kong
69.03
5.22
4,907
12.36
Samoa
35.61
2.69
1,792
4.51
Malaysia
27.64
2.09
1,456
3.67
Germany
26.02
1.97
686
1.73
Bermuda
21.41
1.62
114
0.29
Australia
17.19
1.30
403
1.01
Source: Investment Commission, MOEA
4
Foreign Investment by Industry
1952~2014
2014
Industry
Approved Percentage
Amount
of Total (%)
(US$100m
illion)
Finance and
insurance
15.71
27.23
Electronic parts
and components
8.27
14.33
Wholesale and
retail sales
7.85
13.60
Real estate
4.89
Support services
2.93
Industry
Approved
Amount
(US$100
million)
Percentage
of Total (%)
Finance and
insurance
367.61
27.82
Electronic parts
and
Components
188.53
14.27
Wholesale and
retail sales
134.15
10.15
8.48
Computers,
electronic and
optical products
66.27
5.01
5.09
Information and
Communication
62.44
4.73
Source: Investment Commission, MOEA
5
Stock of FDI, 2001 ~ 2014
Unit: US$billion
80
70
64.2
60
34.75
37.26
43.18
59.36
55.76
50.21
50
40
65.79
68.64
56.15
48.64 45.46
38.28
30
30.07
20
10
0
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Source: UNCTAD and Central Bank of the Republic of China (Taiwan)
6
III. Investment Environment
International Ranking
Business
Environment
WB: 16 (2014)
EIU: 14 (2013-17)
Competitiveness
IMD: 11 (2015)
WEF: 14 (2014)
Economic Freedom
Heritage Foundation: 17 (2014)
Cato Institute: 18 (2014)
Investment Environment
Risk
BERI: 5 (2015.I)
Country Credit Rating
S&P’s: AA- (2014)
Moody’s: Aa3 (2014)
Fitch: AA (2014)
7
Investment Environment Advantages
Strategic
Position
Tax
Incentives
Extensive
Infrastructure
Soft
Power
Excellent
Talent
Comprehensive
IP Protection
Investment
6 Major
Environment
Emerging
Advantages
Industries
SME
Strength
R&D
Capacity
Industry
clusters
Supply
Chain
System
8
Strategic Position ─
Critical Transportation Hub
Direct Cross-Strait
Air & Sea Transport:
Average flying time to 4 mai
n cities (Beijing, Seoul,
Tokyo, HK) in Asia is
2 hours & 55 minutes
■Direct Transportation Ports
67 ports
■Air Flights828 flights/week
■Cargo Charter Flights
68 flights/week
■Sea ShipmentTaiwan
13 ports, China 72ports
Average sailing time to 5 main
ports (HK, Manila, Shanghai, Tokyo,
Singapore) in Asia is merely
53 hours
9
Taiwan: An Asian Economic Hub
Direct Cross-Strait
Links
Cross-Strait
Tariff Reductions
Removal of
Non-Tariff Barriers
Full-Function Logistics Centers
Transshipment Trade
Goods Distribution
Final Processing
10
Excellent Talent and
Intellectual Property Protection
Talent
 45.4% of the work force is
college/university educated.
320,000 college/university
graduates are produced every
year.
Intellectual Property
Protection
Intellectual Property Court
began operating in July
2008.
Intellectual Property
Rights Police Team
 Number of invention patents
per million population: Ranked
No. 1 in the world 2007-2014
(Statistics from Patent Office,
USA)
formed.
Mature trademark, patent,
and copyright laws.
11
Well-Developed Industry Clusters
Nankang Software Park
‧IC design
‧Digital content
‧Biotechnology
Changhua Coastal
Industrial Park
‧Metal products, metal
surface treatment
‧Recycling, green energy
Industrial Zones
Around Kaohsiung
‧ Petrochemicals, iron and steel industry
‧ Metal processing, precision machinery
‧ IC, optoelectronics, communications,
environmental technology
Hsinchu Science Park
and Nearby Industrial Zones
‧IC manufacturing
‧Optoelectronics
‧Biotechnology
Central Taiwan Science Park
and Nearby Industrial Zones
‧ Semiconductors,
optoelectronics
‧ Biotechnology
‧ Precision machinery
Southern Taiwan Science Park
and Nearby Industrial Zones
‧ Optoelectronics
‧ Environmental technology
‧ Automobile parts
‧ Precision machinery
12
Global Supply Chain Center
Semi-conductors
Monitors
Electronic
Components
Textiles
Automotive
Components
Metalworking
Machinery,
Medical Products
Wafer Foundry, IC Packaging, IC Testing, Mask ROMs, IC
Design, DRAMs
TFT-LCD Panels, OLED Panels, Portable Navigation
Devices, PNDs
Electrolytic Copper Foil, CD-ROMs, Motherboards, TFT-LCD
Panels, ABS, WLANs, IC Substrates, LEDs, PCBs
Glass Fabrics, Polyester Filament, PTA, PU Leather, Nylon
Fiber, Functional Textiles, Carbon Fiber
Lamps, Bumpers, Sheet Metal, Rearview Mirrors,
Rubber/Plastic Parts, Molds and Dies
Screws, Nuts, Tin Bars, Electric Scooters, Electric
Wheelchairs, Machine Tools, Plastic Machinery, Bloodglucose Meters, Contact Lenses, Bicycles
13
Abundant Innovation and R&D Capacity (1)
Diversified Industrial Consulting Organizations
DCB
ITRI
16 R&D Institutes
Provide Diversified R&D
Capacity
TTRI
ARTC
PIDC
III
MIRDC
CPC
14
Abundant Innovation and R&D Capacity (2)
208domestic R&D
centers
 65 international R&D centers
North: 137
Center: 33
South: 38
15
Abundant Innovation and R&D Capacity (3)
Patent Performance Shows
International Competitiveness
(Based on USPTO patents - the largest
technology market in the world)
Total Number
of Patents
Number of
Invention Patents
Number of
Design Patents
Number of
Invention Patents/Mil. People
1999-2007, 4th
2008-2014, 5th
2000-2006, 4th
2007-2014, 5th
2010-2011, 3rd
2012-2013, 4th
2014, 5th
2000-2006, 3rd
2007-2014, 1st
All Patents-2014
Rank
Nation
1
USA
2
Invention Patents-2014
Cases
Design Patents-2014
Rank
Nation
Cases
Rank
Nation
159,085
1
USA
144,975
1
USA
Japan
56,401
2
Japan
54,245
2
3
S. Korea
18,224
3
Germany
16,580
4
Germany
17,626
4
S. Korea
5
Taiwan
12,261
5
6
China
7,973
6
Sources: USPTO, Calculated by TIER, 2015
Cases
Invention Patents Per
Mil. People-2014
Rank
Nation
13,403
1
Taiwan
484
Japan
1,974
2
USA
455
3
S. Korea
1,628
3
Israel
432
16,533
4
Germany
931
4
Japan
427
Taiwan
11,339
5
Taiwan
908
5
S. Korea
328
China
7,288
6
China
676
-
China
5.3
Cases
16
Strength of SME
Management Characteristics of
Agility, Flexibility, and Tenacity
Continuously Involving in
Innovative Activities
Strength of
SME
Plentiful and Mobilized Creative
Capability
Adaption to Competitive
Challenges of Globalization
17
Soft Power
MIT Value
MIT products have
20% greater value.
「State of cluster
development」ranked
2nd in WEF’s “Global
Competitiveness
Index 2014”.
Able to facilitate
product R&D and
marketing, supports
Just-in-Time
production and lower
production cost.
Taiwan
Companies
Taiwan companies
located throughout
the Asia Pacific are
the best resource
integrators.
Taiwan companies
with HQs in Taiwan
closely cooperate
with RHQs of foreign
companies.
Meet
International
Standards
Taiwan has developed
electronics industries
for many years and
accumulated intangible
strengths of
manufacturing process
and product
commercialization.
People with legal
concepts and business
habits are accustomed
to international norms.
“Business Efficiency of
SME” ranked 6th in IMD
World Competitiveness
Yearbook 2014.
18
Extensive Infrastructure
Comprehensive
industrial land zoning
Highly-developed sea, air,
and land transportation
■ Fully integrated transportation
network.
■ High-speed rail enables same-day
travel between Taipei and
Kaohsiung.
■ Over 10,000 domestic/overseas
sea/air/land freight and
warehousing companies form a
comprehensive and efficient
transportation network.
Well-developed ICT facilities
■ Taiwan has a well-developed
ICT infrastructure with
97.56% penetration for fixed
line, 84.53% penetration for
household Internet use, and
92.5% penetration for mobile
phones.
■ There are currently 181
industrial zones, 3
science parks, 10
export processing
zones, and 7 free trade
zones.
Extensive
Infrastructure
Convenient freight
and logistics
■ International logistics
companies based in of key
Taiwanese and foreign cities
effectively reduce
import/export/transshipment
times for cargo, enabling the
rapid flow of goods and
information.
Plentiful and low-cost
water/electricity supply
■ Water
Water prices are relatively cheap
compared to many other countries.
■ Electricity
Electricity prices are relatively low
compared to the rest of the world.
19
Competitive Low-Tax Environment
Business Income Tax Individual Income Tax
Inheritance and
Gift Tax
50%
Under
Bracket
410,000
25%
17%
Tax
Rate
6%
Under
Bracket
520,000
Tax
Rate
• Revised Income Tax Act passed
on May 28, 2010.
• Business income tax reduced
from 25% to 17%.
• The reduced rate is more
favorable than China (25%) and
Korea (22%).
5%
Over 410,000,
under
1,090,000
Over
1,090,000
under
2,180,000
13%
21%
Over 520,000,
under
1,170,000
Over
1,170,000,
under
2,350,000
12%
20%
• Reduction effective in 2010.
• Three lowest individual
income tax brackets were
each reduced by 1% in 2010,
and the minimum tax bracket
was increased to NT$520,000.
Source: MOEA Department of Investment Services
10%
• Reduction effective on
January 23, 2009.
• Highest marginal rate
reduced from 50% to 10%;
inheritance tax credit
increased to NT$12,000,000
and gift tax credit increased
to NT$2,200,000.
20
Tax Competitiveness:
A Comparison with Neighboring Countries
Hong
Singapore
Kong
Item
Taiwan
China
Corporate
Income Tax
17%
25%
16.5%
17%
22%
Personal
Income Tax
5%~40 %
3%~45%
15%
2%-20%
8%~35%
Gift and
Inheritance Tax
10%
0%
0%
0%
6%~33%
Value-added
Business Tax
5%
17%
0%
7%
10%
R&D
investment
R&D
investment,
high & new
technology
-
R&D
investment,
emerging
industries,
operations
headquarters
Tax Incentive
Policy
South Korea
R&D
Investment,
foreign
investment
21
MOEA
IV. Investment Incentives
Tax Incentives
◎Business Income Tax Rate Cut to 17%
◎Biotech Industry Investment Deduction
◎R&D Investment Deduction
◎Private Participation in Public Projects
R&D Guidance and Subsidies
Special Zone Incentives
◎FTZs
◎Science Industrial Parks
◎Agriculture Technology Parks
◎EPZs
◎Free Economic Pilot Zones
Facilitate
Foreign
Investment
◎Advanced Technology Research Plan
◎Integrated R&D Plan
◎Encouragement of Domestic
Enterprises to set up R&D Centers
◎Global Innovation and R&D
Partnership Plan
◎Innovative R&D Program for Small
Enterprises
Financing and Investment
◎Loans for Promoting Industrial Innovation or R&D
◎Preferential Loans for Distribution Services and
Catering Industries
◎Preferential Loans for the Revitalization of
Traditional Industries
◎National Development Fund (NT$150billion in loans,
or direct or indirect investment)
22
Page 22
1. Tax Incentives
 Article 10 of the “Statute for Upgrading Industries” stipulates that up to
15% of expenditures on R&D can be deducted from the amount of
business income tax due for the current year, up to 30% of the business
income tax due.
 To realize the “Light Taxation, Simplified Administration” tax reform
policy, as well as to create a fair, efficient, simplified, and internationally
competitive tax environment, the business income tax rate has been cut
to 17%.
 Biotech Industry:
 A company may, for five years beginning with the year in which it
becomes subject to the corporate income tax, deduct up to 35% of its
investment in research and development and personnel training from
its corporate income tax due each year;
 A profit-seeking enterprises that subscribes to the stock issued by a
biotech or new pharmaceuticals company at the time of the latter’s
establishment or subsequent expansion, and that has been a
registered shareholder of such company for three years or more, may,
over five years beginning with the year in which it becomes subject
to the corporate income tax, deduct up to 20% of the total amount
paid for such subscription.
23
1. Tax Incentives (cont.)
Import Tariff
Exemption
Imported machinery that is not manufactured
domestically may enjoy duty-free treatment.
Income Tax
Exemption
on Foreign
Royalty
Payments
Royalty payments to foreign companies for imported
new production technologies or products that use
patents, copyrights, or other special rights owned by
foreign companies is, with the approval of the
Ministry of Economic Affairs, exempt from the
business income tax.
Private
Participation
in Major
Infrastructure
Projects
Participants are eligible for a five-year businessincome-tax holiday, investment tax credits, duty-free
import of construction machinery, and reduced house
tax, land-value tax, and deed tax. Profit-seeking
enterprises that invest in private enterprises
participating in major infrastructure projects are
eligible for offsets against the business income tax.
24
2. Incentives for Special Zones
General Tax
Incentives
Free Trade
Zones
The following incentives are offered for Export
Processing Zones, Science Parks, Free Trade Zones,
and Agricultural Biotechnology Parks:
1. Exemption from import duty, commodity tax, and
sales tax on imported raw materials, fuel,
materials, semi-processed goods, and machinery.
2. Zero business tax on goods and services shipped
abroad and on raw materials, fuel, materials, semiprocessed goods, and machinery procured from a
tax zone.
Exempt from alcohol tax, tobacco health and welfare
surcharge, trade promotion service fee, and harbor
service fee.
25
2. Incentives for Special Zones (cont.)
Science Parks
Agricultural
Biotechnology
Parks
Subsidies of up to NT$10 million are available for
approved R&D projects, not to exceed, however, 50%
of total project cost.
 Subsides are available to defray up to 50% of total
R&D costs, up to maximum of NT$1 million.
 Firms that directly supply agricultural goods and
are not engaged in any processing or
manufacturing may apply for reductions or
waivers of basic agricultural electrical fees and
business income tax deductions for electricity
fees.
26
3. R&D Guidance and Subsidies
Advanced
Technology
Research Plan
Subsidies are available for 40% to 50%, of total
development funding for new technologies that are not
yet mature in Taiwan and that will, in the future, generate
strategic products, services, or industries.
Integrated R&D Plan
Subsidies are available for 40% to 50% of total project
cost for the integration of key and cross-sector
technologies.
Encouragement of
Domestic
Enterprises to Set
Up R&D Centers
Subsidies are available for up to NT$2million or 50% of
total spending by domestic enterprises on the
establishment of R&D centers in Taiwan.
Global Innovation
and R&D
Partnership Plan
Subsidies are available for up to 50% of total spending by
foreign enterprises on the establishment of R&D centers
in Taiwan.
Innovative R&D
program
for Small Enterprises
Subsidies are available to cover up to 50% of the total
cost of R&D for innovative technologies and services.
27
4. Loans and Investment
---Low-interest Loans
Loans for
Industrial
Ｒ＆Ｄ
Promotion
Loans for
Distribution
Services
and Food and
Beverage
Industries
Loans for the
Revitalization
of
Traditional
Enterprises
■ Eligible industries: Telecommunications, manufacturing, technical
services, culture/creation, and distribution services.
■ Maximum loan: The total amount of a loan may not exceed 80% of the
cost of a project, or NT$650 million.
■ Interest rate: Not to exceed the interest on 2-year postal time deposits
plus 2.25 percentage points.
■ Eligible Industries: Wholesale and retail sales, food and beverage, and
logistics (excepting passenger transportation, shipping, and
warehousing services).
■ Total amount of funds available for loans: NT$2billion.
■ Interest rate: Floating rate; the interest rate on for the utilization of longterm funds plus a percentage, not to exceed 1.75 percentage points,
added by the lending bank.
■ Eligible industries: Traditional industries other than emerging, important,
and strategic industries.
■ Maximum loan: Up to 80% of the cost of the project, not to exceed
NT$600 million.
■ Interest rate: Not to exceed the interest rate on 2-year postal time
deposits, plus 2.25 percentage points.
28
4. Loans and Investment (cont.)
---Government Participation
National Development Fund
 Scope of investment:
－IT, communications technology, aerospace,
and digital content industries.
－Investment projects of domestic SMEs.
 Investment ceiling: Government-held shares
may not exceed 49% of the total.
29
V. Industrial Development Trends
and Investment Opportunities
Int’l Development
Trends
Climate Change
Energy Saving
Environment Protection
Change of
Population
Structure
Diversified
Lifestyle
Intellectualization
Research
Innovation
Intelligent
Integrated
Technology
Application
Digital Tech
Innovation
Intelligent
Living
Technology
Integration
Living
Technology
Green
Culture/
Creative
Green
Opportunities
Business
Model
Innovation
Energy Saving
Technology
Value-added
Software and
Services
Enviroment
protection
Technology
Innovative
Talent
1. Service and
System
Integration
Service and system integration to replace hardware
manufacturing.
2. Cross-sector
Integration
Elements of agriculture, industry, services, etc. to integrate
and become main power for developing innovative and new
industries.
30
Industrial Upgrading and Transforming Action Plan
Strategies
Goals
Themes
Renew
Traditional
Industries
Strengthen
Major
Industries
Nurture
Emerging
Industries
Increasing value/
quality – upgrade
product quality level
and value
Providing key
components - establish
comprehensive supply
chain system
Expanding systems build systematic
problem-solving
capability
Nurturing new
creation – facilitate
establishment of new
industries
Forward-looking
Trends, Upgrading of
Industrial Quality
Development Goals
(2013 2020)
Total production value of
manufacturing sector
NT$13.93T 19.46T
GDP of service sector
administered by MOEA*
(2011→2020)
NT$3.03T→4.75T
Assist Mittelstand – stimulate more
Mittelstand development
*Service sector administered by MOEA includes wholesale & retail sales, catering, logistics, consulting, information services,
design, advertising, exhibitions, digital content, wireless broadband applications, health promotion, automation engineering
technology, cloud computing, e-commerce, energy, and technical services: 15 industries in total.
31
Key Industries for Short- and Medium-term Development
Renew Traditional Industries
- Increasing value/quality
Manufacturing sector
Service sector
Strengthen Major Industries
- Providing key component
Machine tool controllers
Flat panel display materials
High-value petrochemical products
High-value metal products
High-value textile products
Safe and secure food system
Aerospace materials/components
Deep sea applications
Intelligent energy-saving electric
/home appliances
Internationalized generic drugs
Semiconductor materials
High-end process equipment
Adv’d electronic components
Bike electronic actuators
Key silicon IP and chip
systems
Wireless broadband application
Energy technology services
Information services
Nurture Emerging Industries
- Nurturing new creation
B4G/5G communication systems
New drugs and medical materials
3D-Print manufacturing
Next-generation electronic devices
Electric vehicles
Smart city and wisdom networking
Cloud industry and big data analysis
Digital content
Strategic services
Design industry
Intelligent automation engring tech
Strengthen Major Industries
- Expanding systems
Intelligent automatic
production solutions
Cloud data center solutions
Green energy systems
integration and operations
Turnkey exportation
Lifestyle innovation services
Energy ICT services
Wholesale and retail sales
Catering
Logistics
E-commerce
Health promotion
32
Major Industries for Foreign Investment
Offshore Wind Power
Turbine
International Logisticsrelated Services
Electric Vehicles
Information Services
Mobile Broadband
Services
Digital Content
Semiconductor Equipment
Biotech and
Pharmaceuticals
Electronic Materials
33
Industrial Investment Opportunities
Item
Investment Opportunities
Offshore wind 1. The target for installed wind power capacity by 2020 is 0.32GW.
power
2. At least 64 offshore wind turbines required.
machinery
3. Maritime engineering: Need to establish construction technology and provide
industry
working ships.
Electric
vehicle
industry
1. Passenger buses: A total of 10,000 passenger buses will be needed by 2023,
providing market opportunities projected at 65 billion NT dollars.
2. Trucks: Around 3,000 garbage trucks will be replaced and about 5,000 short-range
freight trucks will be required, providing business opportunities worth approximately
15 billion NT dollars.
Mobile
broadband
services
industry
1. Licenses for 1.4G LTE spectrum released in 2013 are expected to offer business
opportunities involving more than 70,000 macro base stations and over 1 million small
cells.
2. Business opportunities will arise from the 10 billion NT dollars that the government
expects to invest in promoting innovative mobile broadband application services.
International
logisticsrelated
services(4G)
1. Installation of intelligent logistics software needed for the deployment of ICT and
other technologies necessitated by the operation of free economic pilot zones.
2. Software investment opportunities include cloud service platforms for logistics,
information management systems for supply chain collaboration, goods-tracing
management platforms, shipment-tracking management platforms, inventoryfinancing service platforms, and value-added warehousing, shipping, and transit
platforms.
Semiconductor companies will spend more than 10 billion US dollars on capacity
Semiconductexpansion, and this will give rise to potential opportunities for the supply of whole-plant
or factory
semiconductor equipment along with consumable parts and components for
expansion
semiconductor equipment.
34
VI. Investment Services
Ministry of
Economic Affairs
Agencies of
MOEA
1.IDB
2.DoIT
3.EPZA
4.DoC
5.BoE
6.SMEA
Investment
Commission,
MOEA
(Investment
review)
Department of
Investment
Services
(Investment
Promotion)
InvesTaiwan
Service Center
Investment Promotion Offices
1.TUSA
2.TJPO
3.Industrial Development and
Promotion Committees
Central Government
1.Min. of The Interior
2.Min. of Trans. & Com.
3.Min. of Finance
4.Min. of Culture
5.EPA
6.Min. of Health and
Welfare
7.Council of Agriculture
…..
(Investment Assistance)
Local
Governmental
Investment
Services
Please make full use of DOIS services
1. Promotion of domestic and foreign investment and technical
cooperation
2. Assistance for and promotion of investment by returning
Taiwanese businesses
3. Pinpointing and collation of investment opportunities
4. Promotion of investment projects, follow-up, and removal of
obstacles
5. Publication of investment guides and investment-related laws
and regulations
6. Promotion of the recruitment of overseas technology personnel
7. Promotion and liaison in regard to bilateral and multilateral
investment affairs
Department of Investment Services, MOEA
8F., No. 71, Guanqian Rd., Taipei, Taiwan
Tel: 02-23892111
E-mail: [email protected]
Website: http://www.dois.moea.gov.tw
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