Taiwan is currently the seventh largest economy in Asia. It is considered one of the three Asian tigers, along with Singapore and Hong Kong, and 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 great option for foreign businesses.
Taiwan is near China and considered “The Gateway to Asia”. Taiwan also has an elaborate transportation network that includes the island-wide conventional rail and highway system: the west coast high-speed line, a national freeway system and regional freeways.
Taiwan has seven international harbors and seventeen airports. Taiwan’s proximity to five major Asia-Pacific harbors: Hong Kong, Manila, Shanghai, Tokyo, and Singapore also makes the country an accessible location to trade with.
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 a 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.
When comparing Taiwan vs Thailand, where a foreigner is not allowed to have a 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). 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 the perfect place for foreign businesses to expand in. 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 your business plans to break into the Taiwanese market, you’ll need to know how 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!