Foreign Direct Investment in Taiwan

Overview by

FDI in Figures

Taiwan is an important destination for Foreign Direct Investment (FDI). In terms of FDI attraction, the island is the sixth among East-Asian, Southern and South-Eastern economies, behind China, Hong Kong, Singapore, India and Thailand. The island enjoys strong growth sustained by the dynamism of the region, a population with high purchasing power and economy with high technological focus. Between 2005 and 2007, Taiwan registered a significant growth of FDI, however, due to the international financial crisis, FDI inflows fell sharply in 2008 and 2009. Thanks to the economic recovery, the number of FDI projects increased again in 2010 and this trend is expected to continue over the year 2011.


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

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.

Foreign Direct Investment 2007 2008 2009
FDI Inward Flow (million USD) 7,769 5,432 2,803
FDI Stock (million USD) 48,640 45,458 48,261
Performance Index*, Ranking on 141 Economies 114 116 122
Potential Index**, Ranking on 141 Economies 22 22 -
Number of Greenfield Investments*** 63 87 87
FDI Inwards (in % of GFCF****) 9.0 6.4 6.2
FDI Stock (in % of GDP) 12.4 11.3 12.7

Source: UNCTAD

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.

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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 taxation regulations for foreign professionals in Taiwan came into effect at the beginning of 2008, as according to an announcement made by the Ministry of Finance (MOF).

The 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.
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.

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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
Find Investment Service Providers in Taiwan on

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Investment Opportunities

Investment Aid Agency
Invest in Taiwan.
Tenders, Projects and Public Procurement
Tenders Info, Tenders in Taiwan Province of China
Asian Development Bank, Procurement Plans in Asia
DgMarket, Tenders Worldwide
Other Useful Resources

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