3 Reasons to Start your Business in Taiwan
Many investors are looking to expand their business to Taiwan, the seventh-largest economy in Asia.
In addition to being considered one of the three Asian tigers, along with Singapore and Hong Kong, Taiwan boasts one of the most stable economies in the world.
Foreign business flock to Taiwan’s market for its abundant incentive programs, government policies, and advantageous location.
Keep reading to learn three reasons why Taiwan is a great option for foreign businesses.
1. Strategic Location
Taiwan is near China and contains an elaborate transportation network that includes the island-wide conventional rail and highway system.
For transporting goods, Taiwan has seven international harbors and seventeen airports. Furthermore, it is close to five major Asia-Pacific harbors: Hong Kong, Manila, Shanghai, Tokyo, and Singapore, which makes Taiwan an accessible location to trade with.
2. Expansive Incentive Programs for businesses in Taiwan
Taiwan’s government strongly promotes tax incentives for companies that plan to engage themselves in locations such as science parks, export processing zones, agricultural technology parks, and free trade zones.
To promote industrial innovation, if a company or limited partnership has not committed severe violations of environmental protection, labor, or food safety and health laws, it may take a tax credit of 15% of Research and Development (R&D) expenditures applied in one year or tax credit of 10% over three years.
The tax credit is offset R&D from payable for the current year, and may not exceed 30% of profit-seeking enterprise income tax due for the current year.
3. Supportive Government Policies for business in Taiwan
Compared to Thailand, where a foreigner is not allowed to have full ownership of a company, the Taiwanese government allows a foreigner to own 100% of a Taiwanese company. There is no minimum paid-up capital requirement for setting up businesses in Taiwan.
Alternative corporate structures, such as registering a branch or representative office are also available if business owners are setting up companies in Taiwan through a foreign entity.
Another way to approach the Taiwan market is by employing the expertise of a Professional Employer Organization (PEO) in Taiwan. You would not need to create your own legal entity in Taiwan for employment purposes, since the PEO will employ the workers directly, saving you both time and money. Compliance with the government, the local labor and employment law is crucial when looking to expand into the Taiwan market, and using a PEO can prevent legal risks.
Between tax incentives, a strategic location, and supportive government policies, Taiwan is an ideal place for foreign businesses. The upper secondary graduation rate in Taiwan is 88%, so the country’s workforce is always fresh with educated and competent graduates each year.
If you plan to enter the Taiwanese business market, you’ll need to hire quality employees in Taiwan.
Check out our How to Hire Employees in Taiwan Guide to learn more about Taiwan’s HR requirements. NNRoad can help bring your company overseas and enter the Taiwan market with ease, contact us today!