Taiwan Business Guide - Management and Business Studies Portal
Taiwan Business Guide - Management and Business Studies Portal
Taiwan Business Guide - Management and Business Studies Portal
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HELPING YOUR BUSINESS GROW INTERNATIONALLY<br />
<strong>Taiwan</strong><br />
<strong>Business</strong><br />
<strong>Guide</strong><br />
1
Disclaimer<br />
Whereas every effort has been made to ensure that the information given in this document is<br />
accurate, neither UK Trade & Investment nor its parent Departments (the Department for <strong>Business</strong>,<br />
Innovation & Skills, <strong>and</strong> the Foreign & Commonwealth Office) accept liability for any errors, omissions<br />
or misleading statements, <strong>and</strong> no warranty is given or responsibility accepted as to the st<strong>and</strong>ing of<br />
any individual, firm, company or other organisation mentioned.<br />
2
CONTENTS<br />
INTRODUCTION Why <strong>Taiwan</strong>? 4<br />
About this <strong>Business</strong> <strong>Guide</strong> 16<br />
RESEARCHING THE MARKET Where to begin 17<br />
How we can help you 20<br />
MARKET ENTRY Choosing the right location 22<br />
Establishing a presence 24<br />
GETTING STARTED Finding a customer or partner 32<br />
Due diligence 33<br />
Employing staff 34<br />
Language 36<br />
Marketing 38<br />
Interpreters 40<br />
BUSINESS ISSUES AND <strong>Business</strong> etiquette 42<br />
CONSIDERATIONS Intellectual property rights (IPR) 47<br />
Procurement 48<br />
Regulations, incentives <strong>and</strong> tax 49<br />
Getting paid <strong>and</strong> financial issues 53<br />
Insurance 55<br />
<strong>Management</strong>, control <strong>and</strong> quality assurance 56<br />
Bribery <strong>and</strong> corruption 57<br />
Getting to <strong>Taiwan</strong> 58<br />
<strong>Taiwan</strong>ese CULTURE Politics 61<br />
Current economic situation 62<br />
Religion 63<br />
Challenges 63<br />
CONTACTS 64<br />
3
INTRODUCTION<br />
WHY <strong>Taiwan</strong>?<br />
<strong>Taiwan</strong>, formally known as the Republic of China, is strategically located at the heart of the<br />
Asia-Pacific region. Over the last three decades, it has transformed itself from an authoritarian<br />
one-party state, with an agrarian economy based on rice <strong>and</strong> sugar, into a thriving capitalist<br />
economy with a democratically elected government. <strong>Taiwan</strong> is now the 16th-largest trading<br />
nation in the world, according to the World Trade Organisation, with an economy founded on<br />
high-tech <strong>and</strong> creative industries.<br />
<strong>Taiwan</strong>’s economy grew by 10.8 per cent<br />
in 2010, the strongest annual growth since<br />
1987. As the rest of the world slowly emerges<br />
from the economic downturn, domestic<br />
dem<strong>and</strong> in <strong>Taiwan</strong> is booming <strong>and</strong> the<br />
latest figures indicate that it is entering a<br />
thriving period of growth. Over the last three<br />
decades, <strong>Taiwan</strong> has averaged annual GDP<br />
growth of around 8 per cent. The country’s<br />
economic success was, initially, based on<br />
the manufacture of low-technology goods.<br />
However, these labour-intensive industries<br />
have, increasingly, relocated to areas with a<br />
lower cost base, primarily China, <strong>and</strong> <strong>Taiwan</strong><br />
has successfully moved into higher valueadded<br />
manufacturing <strong>and</strong> exports, mainly in<br />
electronics <strong>and</strong> computers.<br />
<strong>Taiwan</strong> leads the world in the manufacture<br />
of computer-related products <strong>and</strong><br />
semiconductors. Before the global recession,<br />
high-tech products made up around 51.6<br />
per cent of the country’s exports, compared<br />
to 29 per cent in South Korea <strong>and</strong> 20 per<br />
cent in Japan. Accounting for 17 per cent<br />
of the global market, <strong>Taiwan</strong>’s photonics<br />
industry is estimated to be worth US$90<br />
billion in 2011. It ranks as the leader in the<br />
world for production volumes <strong>and</strong> second<br />
in terms of production value.<br />
<strong>Taiwan</strong> has also become a global centre<br />
for R&D <strong>and</strong> a growing number of<br />
multinational companies (such as Intel,<br />
Microsoft, Sony <strong>and</strong> HP) are choosing it as<br />
the focal point for R&D in the Asia-Pacific<br />
region. The World Economic Forum’s World<br />
Competitiveness Report ranks <strong>Taiwan</strong> eighth<br />
in the world for R&D.<br />
It has developed one of the most advanced<br />
telecommunications networks in Asia <strong>and</strong><br />
wireless penetration has almost reached<br />
saturation levels, thanks to a comprehensive<br />
infrastructure of Wi-Fi, WiFly, WiMAX <strong>and</strong><br />
3.5G. The country aims to become the first<br />
in the world that is entirely wireless, with<br />
broadb<strong>and</strong> access ports located throughout<br />
the isl<strong>and</strong>. Almost half of the top 100 IT<br />
companies in Asia have a presence in <strong>Taiwan</strong>.<br />
According to the International Monetary<br />
Fund, <strong>Taiwan</strong>’s economy is now the 26thlargest<br />
in the world. In 2010, it was ranked<br />
13th in global competitiveness rankings<br />
(World Economic Forum).<br />
5
INTRODUCTION<br />
WHY <strong>Taiwan</strong>? (CONTINUED)<br />
The Country at a Glance<br />
Full name: Republic of China (<strong>Taiwan</strong>)<br />
Capital:<br />
Taipei<br />
Other main cities: Taichung, Kaohsiung<br />
Area:<br />
36,188 sq. km/13,972 sq. miles (roughly the size of Wales)<br />
Population: 23.03 million (2010)<br />
Major languages: M<strong>and</strong>arin Chinese (official language), Min Nan Chinese (<strong>Taiwan</strong>ese)<br />
<strong>and</strong> Hakka. English <strong>and</strong> Japanese are also widely spoken<br />
Ethnicities: Han Chinese <strong>and</strong> indigenous minority of <strong>Taiwan</strong>ese aborigines<br />
Life expectancy: 73 years (men), 79 years (women)<br />
Major religions: Taoism, Buddhism, Christianity<br />
Monetary unit: New <strong>Taiwan</strong> dollar (NT$)<br />
Nominal GDP: US$427 billion<br />
GDP per capita: US$19,155<br />
World Bank ease 33<br />
of doing business<br />
ranking:<br />
A leading choice for investors<br />
<strong>Taiwan</strong>’s strategic location is one of its most<br />
significant advantages for international<br />
investors. It is ideally situated adjacent<br />
to China <strong>and</strong> within easy reach of major<br />
commercial centres <strong>and</strong> ports in the ASEAN<br />
(Association of Southeast Asian Nations)<br />
region. For example, the sailing time from<br />
<strong>Taiwan</strong>’s largest port, Kaohsiung, to five of<br />
the largest Asia-Pacific ports (Hong Kong,<br />
Manila, Shanghai, Tokyo <strong>and</strong> Singapore)<br />
is just over two days. This makes <strong>Taiwan</strong><br />
a favoured choice for headquarters in the<br />
Asia‐Pacific region, as well as R&D facilities.<br />
With direct flights having been introduced<br />
in 2008, travellers can now fly from <strong>Taiwan</strong><br />
to major cities in China with a journey time<br />
of just one to two hours.<br />
The continuing liberalisation of links across<br />
the <strong>Taiwan</strong> Strait means that foreign<br />
companies are increasingly choosing <strong>Taiwan</strong><br />
both as a market in its own right <strong>and</strong> as a<br />
stepping stone into China. <strong>Taiwan</strong> signed<br />
the Economic Cooperation Framework<br />
Agreement (ECFA) with China in 2010<br />
to reduce tariffs <strong>and</strong> commercial barriers<br />
6
etween the two markets. This is expected<br />
to boost bilateral trade significantly.<br />
<strong>Taiwan</strong>’s pro-investment policies <strong>and</strong><br />
incentives are another major pull for<br />
investors. Free competition is encouraged<br />
<strong>and</strong> there are price controls only on basic<br />
necessities. Qualified foreign companies<br />
can obtain listings on the <strong>Taiwan</strong> stock<br />
market by listing their shares or issuing<br />
<strong>Taiwan</strong> depositary receipts. The <strong>Taiwan</strong>ese<br />
government encourages mergers <strong>and</strong><br />
acquisitions that serve the public interest<br />
<strong>and</strong> protection is provided to foreign<br />
patents, trademarks <strong>and</strong> copyrights.<br />
Since <strong>Taiwan</strong> joined the World Trade<br />
Organisation in 2002, it has opened up its<br />
domestic market to international investment<br />
<strong>and</strong> there are now very few industries that<br />
are closed to foreign investors (talk to<br />
UKTI <strong>Taiwan</strong> for more details). Around 300<br />
UK companies already have a significant<br />
presence in <strong>Taiwan</strong>, including HSBC,<br />
St<strong>and</strong>ard Chartered Bank, Barclays, Arup<br />
<strong>and</strong> Mott Macdonald. UK retailers have been<br />
well-received, with fashion labels such as<br />
Burberry, Vivienne Westwood, Paul Smith,<br />
Dunhill, Aquascutum, Ted Baker, Gieves<br />
& Hawkes, Oasis <strong>and</strong> French Connection<br />
all gaining a foothold in the marketplace.<br />
Smaller, specialist UK companies have also<br />
invested in <strong>Taiwan</strong>, including suppliers to the<br />
vast semiconductor industry <strong>and</strong> specialist<br />
chemical company, Epichem.<br />
The <strong>Taiwan</strong>ese government is actively<br />
promoting the development of six<br />
emerging industries: biotechnology; green<br />
energy; culture <strong>and</strong> creativity; medicine<br />
<strong>and</strong> healthcare; tourism <strong>and</strong> high-end<br />
agriculture. It is also focusing on four<br />
“intelligent” industries: smart electric<br />
vehicles; smart green buildings; cloud<br />
computing <strong>and</strong> patent commercialisation.<br />
There are incentives available to attract<br />
foreign <strong>and</strong> domestic investors in these<br />
priority sectors.<br />
You can find more information on the<br />
<strong>Taiwan</strong>ese government’s Invest in <strong>Taiwan</strong><br />
website at http://investtaiwan.nat.gov.tw/<br />
library/main_eng_general.jsp<br />
Specific details of key investment<br />
opportunities in <strong>Taiwan</strong> are listed on<br />
page 10, under ‘Opportunities in <strong>Taiwan</strong><br />
for UK companies’.<br />
7
INTRODUCTION<br />
WHY <strong>Taiwan</strong>? (CONTINUED)<br />
Strong bilateral trade<br />
Most of the world, including the UK, does<br />
not recognise <strong>Taiwan</strong> as a sovereign entity<br />
separate from China, due to the political<br />
disagreement between the two. This has<br />
led to diplomatic isolation for <strong>Taiwan</strong>, but,<br />
despite this, the country enjoys a strong trade<br />
<strong>and</strong> investment relationship with the UK.<br />
Exports<br />
<strong>Taiwan</strong> is the UK’s 44th-largest export<br />
market. Only two other countries in Europe<br />
export more to <strong>Taiwan</strong>. In 2010, UK<br />
exports to the country were worth £1.05<br />
billion, up 40 per cent on 2009. The UK’s<br />
principal exports to <strong>Taiwan</strong> are: electrical<br />
machinery; beverages; industrial machinery<br />
<strong>and</strong> equipment; metalliferous ores <strong>and</strong><br />
metal scrap; medicine <strong>and</strong> pharmaceuticals.<br />
Inward investment<br />
There are currently around 180 <strong>Taiwan</strong>ese<br />
companies with an active presence in<br />
the UK. In 2009/10, 13 more <strong>Taiwan</strong>ese<br />
firms established a presence in the UK,<br />
including specialists in ICT, biotechnology<br />
<strong>and</strong> healthcare. This helped to create<br />
<strong>and</strong> safeguard over 200 jobs. Seventy<br />
per cent of all <strong>Taiwan</strong>ese investment in<br />
Europe comes to the UK <strong>and</strong> nine of<br />
<strong>Taiwan</strong>’s leading financial institutions are<br />
represented here, including the Bank of<br />
<strong>Taiwan</strong>, the Central Bank, the Financial<br />
Supervisory Commission, Chang Hwa<br />
Commercial Bank <strong>and</strong> SinoPac Securities.<br />
Imports<br />
Imports from <strong>Taiwan</strong> to the UK were worth<br />
£2.9 billion in 2010, up 38 per cent on the<br />
previous year. <strong>Taiwan</strong> is the 32nd-largest<br />
supplier of goods to the UK. The UK’s<br />
principal <strong>Taiwan</strong>ese imports are: office<br />
machinery <strong>and</strong> automatic data processing<br />
systems; telecoms <strong>and</strong> sound recording/<br />
reproducing equipment; electrical machinery<br />
<strong>and</strong> miscellaneous manufactured articles.<br />
8
uk trade (goods only) with taiwan 2003-2010 (£ thous<strong>and</strong>s)<br />
2003 2004 2005 2006 2007 2008 2009 2010<br />
UK exports 903,977 952,909 944,892 912,853 938,618 836,298 750,472 1,048,840<br />
UK imports 2,254,791 2,395,505 2,267,258 2,390,453 2,421,774 2,482,862 2,095,982 2,892,369<br />
TOP TEN UK importS OF GOODS TO taiwan IN 2010 (£ MILLIONS)<br />
Item 2010<br />
Telecoms <strong>and</strong> sound recording <strong>and</strong> reproducing equipment 597<br />
Electrical machinery <strong>and</strong> appliances 313<br />
Office machines <strong>and</strong> adp machines 272<br />
Road vehicles (including air cushion vehicles) 271<br />
Miscellaneous manufactured articles 251<br />
Manufactures of metal 230<br />
General industrial machinery <strong>and</strong> equipment 97<br />
Power-generating machinery <strong>and</strong> equipment 77<br />
Professional, scientific <strong>and</strong> controlling instruments 67<br />
Furniture <strong>and</strong> parts thereof; bedding, mattresses etc 59<br />
TOP TEN UK EXPORTS OF GOODS TO taiwan IN 2010 (£ MILLIONS)<br />
Item 2010<br />
Metalliferous ores <strong>and</strong> metal scrap 123<br />
Beverages 110<br />
Power-generating machinery <strong>and</strong> equipment 95<br />
Medicinal <strong>and</strong> pharmaceutical products 90<br />
General industrial machinery <strong>and</strong> equipment 64<br />
Machinery specialised for particular industries 58<br />
Electrical machinery <strong>and</strong> appliances 57<br />
Miscellaneous manufactured articles 43<br />
Professional, scientific <strong>and</strong> controlling instruments 38<br />
Iron <strong>and</strong> steel 36<br />
Source: BIS analysis of HM Revenue & Customs data<br />
9
INTRODUCTION<br />
WHY <strong>Taiwan</strong>? (CONTINUED)<br />
Opportunities in <strong>Taiwan</strong> for UK companies<br />
UK Trade & Investment (UKTI) has identified<br />
significant opportunities in the following<br />
sectors in <strong>Taiwan</strong>:<br />
• Aerospace – <strong>Taiwan</strong>ese authorities plan<br />
to increase aviation-related investment<br />
to £666 million by 2013, with the total<br />
value of annual aerospace production<br />
expected to reach £2 billion by that<br />
year. <strong>Taiwan</strong>’s Ministry of Transportation<br />
<strong>and</strong> Communications (MOTC) is keen<br />
to develop the aerospace industry<br />
<strong>and</strong> upgrade the capability for local<br />
manufacturers to carry out Original<br />
Equipment Manufacturing (OEM) work<br />
for international aerospace companies.<br />
• Agriculture – The <strong>Taiwan</strong>ese government<br />
is investing £500 million in agriculture<br />
<strong>and</strong> rural development by 2012 as<br />
part of its High-End Agriculture <strong>and</strong><br />
Health Excellence Programme. This<br />
will concentrate on food safety <strong>and</strong><br />
traceability, genetic technology, leisure<br />
<strong>and</strong> floral exports. There are opportunities<br />
for UK companies in: marketing <strong>and</strong><br />
consultancy; food safety <strong>and</strong> traceability;<br />
genetics <strong>and</strong> animal welfare; <strong>and</strong><br />
orchid‐growing joint ventures.<br />
• Clothing <strong>and</strong> accessories – Italian <strong>and</strong><br />
French designer labels dominate the<br />
<strong>Taiwan</strong>ese market, while the market for<br />
young girls’ fashion is strongly influenced<br />
by Japanese <strong>and</strong> Korean styles <strong>and</strong><br />
trends. Due to the increasing dem<strong>and</strong><br />
for quality products, there are<br />
opportunities for UK companies in<br />
contemporary men’s <strong>and</strong> women’s wear,<br />
premium accessories <strong>and</strong> sportswear.<br />
• Telecommunications – <strong>Taiwan</strong> has one of<br />
the most advanced telecommunications<br />
sectors in Asia. The mobile <strong>and</strong> wireless<br />
communications market is dominated by<br />
three key players – Chunghua Telecom;<br />
<strong>Taiwan</strong> Mobile <strong>and</strong> FarEastone – which<br />
are keen to exp<strong>and</strong> into telehealth,<br />
cloud computing <strong>and</strong> smart grid. The<br />
fourth player, VIBO Telecom, which<br />
entered the market after the other three,<br />
hopes to distinguish itself by developing<br />
innovative business models in the fields<br />
of voice <strong>and</strong> data transmission.<br />
• Construction – The <strong>Taiwan</strong>ese government<br />
has announced a number of large-scale<br />
public infrastructure projects, which will<br />
generate opportunities for UK companies<br />
over the next eight years. The main<br />
projects are: rapid transit networks in<br />
<strong>Taiwan</strong>’s main cities; railway mainline<br />
upgrades; Kaohsiung Free Port <strong>and</strong><br />
Eco‐Park; the Asia‐Pacific Maritime<br />
<strong>and</strong> Air Logistics Centre in Taichuang;<br />
Taoyuan International Air City; urban<br />
regeneration <strong>and</strong> rural revitalisation<br />
projects across the country; <strong>and</strong> an<br />
isl<strong>and</strong>‐wide sewage system.<br />
10
• Creative industries – The expansion of<br />
the Cultural & Creative Industries (CCI)<br />
in <strong>Taiwan</strong> is a priority area <strong>and</strong> is one<br />
of the six key emerging sectors selected<br />
by <strong>Taiwan</strong>ese authorities for national<br />
development. There are estimated to be<br />
over 49,450 CCI businesses in <strong>Taiwan</strong>,<br />
providing some 195,160 jobs. The<br />
<strong>Taiwan</strong>ese government is investing more<br />
than £107.7 million under the Creative<br />
<strong>Taiwan</strong> framework. This is creating<br />
opportunities for UK companies in:<br />
product design, incorporating packaging<br />
design/industrial design <strong>and</strong> br<strong>and</strong>ing<br />
counselling services; architectural design<br />
<strong>and</strong> planning; creative education <strong>and</strong><br />
training; <strong>and</strong> the experience economy,<br />
tied in with digital content development.<br />
• Education <strong>and</strong> skills development – Due<br />
to its relatively small geographical area<br />
<strong>and</strong> short supply of natural resources,<br />
<strong>Taiwan</strong>’s economic progress hinges<br />
largely on its ability to develop human<br />
resources. It is therefore strongly<br />
committed to the improvement of<br />
education <strong>and</strong> skills. Under the Intelligent<br />
<strong>Taiwan</strong> project, launched in 2009, a total<br />
budget of £6.64 billion will be allocated<br />
to this by 2016, covering 13 major<br />
individual project areas such as Englishlanguage<br />
learning, Continual Personal<br />
Development (CPD), IT education,<br />
digital learning, vocational training <strong>and</strong><br />
teaching-quality improvement in higher<br />
education. This is creating outst<strong>and</strong>ing<br />
opportunities for UK companies active in<br />
these areas.<br />
• Electronics, semiconductors <strong>and</strong> display<br />
– <strong>Taiwan</strong> leads the world in the<br />
production of PCs, notebook PCs, Soho<br />
routers, cable modems, optical disk<br />
drives, modems, switches, hubs <strong>and</strong><br />
WLAN, as well as being a key player in<br />
mobile h<strong>and</strong>set production. <strong>Taiwan</strong>ese<br />
ICT companies mainly use China as their<br />
manufacturing base, keeping their<br />
headquarters, R&D <strong>and</strong> sales departments<br />
in <strong>Taiwan</strong>. <strong>Taiwan</strong> has a worldwide share<br />
of over 90 per cent of the OEM/ODM<br />
(Original Design Manufacturer) market.<br />
It also dominates the semiconductor<br />
chip supply chain. There are opportunities<br />
for UK companies in cloud computing,<br />
e-health <strong>and</strong> mobile health, green IT,<br />
telematics, software applications on<br />
mobile devices <strong>and</strong> WiMAX.<br />
• Environment – As one of the most<br />
densely populated isl<strong>and</strong>s in the world,<br />
<strong>Taiwan</strong>’s usable l<strong>and</strong> area is very limited.<br />
The <strong>Taiwan</strong>ese government spends<br />
around £14 million a year on tackling<br />
soil <strong>and</strong> groundwater contamination<br />
<strong>and</strong> this is set to double over the next<br />
few years, adding to investments by<br />
the private sector. <strong>Taiwan</strong> is actively<br />
seeking international partners with<br />
expertise in this field. In addition,<br />
11
INTRODUCTION<br />
WHY <strong>Taiwan</strong>? (CONTINUED)<br />
the <strong>Taiwan</strong> Environmental Protection<br />
Administration (EPA) focuses on five key<br />
areas: promoting sustainability; reducing<br />
carbon emissions; recycling; eliminating<br />
pollution <strong>and</strong> promoting healthy,<br />
sustainable lifestyles.<br />
• Financial services – <strong>Taiwan</strong>’s financial<br />
services industry, which accounts for<br />
10 per cent of its GDP, has changed<br />
greatly in the past couple of decades,<br />
becoming international <strong>and</strong> liberalised.<br />
Currently, there are 15 financial holding<br />
companies <strong>and</strong> 37 domestic banks in<br />
<strong>Taiwan</strong> (3,264 branches in total). Thirty<br />
two foreign banks have been granted<br />
licences to date, <strong>and</strong> have established<br />
around 140 branches in <strong>Taiwan</strong>. Some<br />
39 securities investment trust enterprises,<br />
23 non-life insurance companies <strong>and</strong><br />
29 life insurance companies currently<br />
do business in <strong>Taiwan</strong>. UK financial<br />
services firms active there include: HSBC,<br />
St<strong>and</strong>ard Chartered Bank, Barclays,<br />
Schroders, Aberdeen, PCL Life <strong>and</strong><br />
First-Aviva (a joint venture between<br />
First Financial Holding <strong>and</strong> Aviva). High<br />
rates of savings <strong>and</strong> ongoing financial<br />
liberalisation make <strong>Taiwan</strong> an attractive<br />
market for capital. There are opportunities<br />
for UK companies in wealth management,<br />
foreign currency securities exchange,<br />
pension fund management, public private<br />
partnership <strong>and</strong> financial services training.<br />
• Food <strong>and</strong> drink – Food <strong>and</strong> drink is the<br />
fifth-largest industry in <strong>Taiwan</strong> <strong>and</strong> one<br />
of its fastest-growing sectors. Some 40<br />
per cent of goods consumed in <strong>Taiwan</strong><br />
are imported. The continued expansion of<br />
‘upmarket’ supermarkets on the isl<strong>and</strong> has<br />
prompted importers to look further afield<br />
for value-added products, particularly to<br />
European countries. Currently, over 80<br />
per cent of the items offered by these<br />
supermarkets are imported, creating<br />
opportunities for UK companies in:<br />
ready-to-eat food <strong>and</strong> drinks; alcoholic<br />
beverages; confectionery; organic<br />
products <strong>and</strong> health foods.<br />
• Healthcare – <strong>Taiwan</strong> imported around<br />
£1.1 billion of medical devices in<br />
2010. There are many opportunities<br />
for UK companies supplying high-end<br />
pharmaceutical products <strong>and</strong> medical<br />
equipment. There are also opportunities<br />
in healthcare informatics/telecare services<br />
<strong>and</strong> long-term care provision for the<br />
elderly <strong>and</strong> disabled, as <strong>Taiwan</strong> is an<br />
ageing society.<br />
• Low carbon economy – Over the next<br />
five years, the <strong>Taiwan</strong>ese government<br />
will invest more than £50 billion in<br />
promoting the green economy. Fifty<br />
pilot low carbon communities will be<br />
selected by the end of 2011 <strong>and</strong> six low<br />
carbon cities by 2014, as part of a plan<br />
to reduce carbon emissions <strong>and</strong> gradually<br />
12
INTRODUCTION<br />
WHY <strong>Taiwan</strong>? (CONTINUED)<br />
turn <strong>Taiwan</strong> into a low carbon nation.<br />
By 2020, the isl<strong>and</strong> will be divided<br />
into four low carbon living spheres in<br />
northern, central, southern <strong>and</strong> eastern<br />
<strong>Taiwan</strong>. There are opportunities for UK<br />
companies involved in: green energy,<br />
energy conservation installations <strong>and</strong><br />
industry support (solar PV, LED PV<br />
lighting, wind power, biomass, hydrogen<br />
<strong>and</strong> fuel cell), energy communication <strong>and</strong><br />
information <strong>and</strong> electric vehicles.<br />
• Marine – <strong>Taiwan</strong>’s yacht industry is<br />
export-oriented <strong>and</strong> imported hardware<br />
components <strong>and</strong> accessories are widely<br />
used in finished yachts. Potential<br />
opportunities for UK companies include:<br />
hardware components <strong>and</strong> accessories/<br />
auxiliaries; naval architecture/exterior <strong>and</strong><br />
interior design; deck hardware; energy<br />
saving <strong>and</strong> green power; <strong>and</strong> innovative<br />
superyacht equipment <strong>and</strong> services.<br />
• Transport – The <strong>Taiwan</strong>ese government<br />
has announced 12 prioritised public<br />
construction projects, with a total<br />
budget of £66.5 billion over the next<br />
eight years. The first priority is to build<br />
a fast <strong>and</strong> efficient isl<strong>and</strong>-wide<br />
transportation network. There are<br />
opportunities for UK companies in:<br />
consulting engineering, signalling,<br />
station design <strong>and</strong> rolling‐stock parts.<br />
For more details on these <strong>and</strong> other<br />
commercial opportunities, talk to UKTI<br />
<strong>Taiwan</strong>.<br />
• Power – <strong>Taiwan</strong> recognises the<br />
importance of developing more<br />
green‐energy projects <strong>and</strong> welcomes the<br />
input of UK renewable energy suppliers.<br />
There are opportunities for companies<br />
that specialise in offshore wind power,<br />
biomass <strong>and</strong> marine energy. There are also<br />
significant opportunities for consultants<br />
specialising in energy privatisation.<br />
14
Market strengths<br />
These are the essential facts that companies doing business in <strong>Taiwan</strong> need to know:<br />
• <strong>Taiwan</strong> is the world’s biggest manufacturer of computer-related products <strong>and</strong><br />
semiconductors.<br />
• The World Economic Forum ranks <strong>Taiwan</strong> eighth in the world for R&D <strong>and</strong><br />
13th (of 133 economies) for global competitiveness.<br />
• <strong>Taiwan</strong>’s economy grew by 10.8 per cent in 2010 – the strongest annual growth<br />
for more than 20 years.<br />
• <strong>Taiwan</strong> is strategically located at the heart of the Asia Pacific, around 90 miles<br />
off the coast of mainl<strong>and</strong> China <strong>and</strong> within easy reach of all major ASEAN<br />
commercial centres.<br />
• Since joining the World Trade Organisation in 2002, <strong>Taiwan</strong> has opened up its<br />
domestic market to international investment.<br />
• <strong>Taiwan</strong> has a strong trade <strong>and</strong> investment relationship with the UK – only two other<br />
European countries export more to <strong>Taiwan</strong> than the UK. Imports to the UK from<br />
<strong>Taiwan</strong> were worth some £2.9 billion in 2010.<br />
15
INTRODUCTION<br />
ABOUT THIS BUSINESS GUIDE<br />
The main objective of this <strong>Business</strong> <strong>Guide</strong><br />
is to provide you with basic knowledge<br />
about <strong>Taiwan</strong> – an overview of its economy,<br />
business culture <strong>and</strong> potential opportunities<br />
<strong>and</strong> an introduction to other relevant issues.<br />
Novice exporters, in particular, will find it<br />
a useful starting point. Further assistance<br />
is available from the UKTI team in <strong>Taiwan</strong>.<br />
Full contact details are available at the end<br />
of this <strong>Guide</strong>.<br />
The <strong>Taiwan</strong> <strong>Business</strong> <strong>Guide</strong> is intended<br />
to provide general business advice <strong>and</strong><br />
should not be used as a substitute for<br />
market research, due diligence, or legal<br />
<strong>and</strong> professional services.<br />
About UK Trade & Investment<br />
UK Trade & Investment (UKTI) is the<br />
government department that can help<br />
you achieve your international business<br />
potential. We combine the national<br />
resources of the Department for <strong>Business</strong>,<br />
Innovation & Skills (BIS) <strong>and</strong> the Foreign<br />
& Commonwealth Office’s (FCO) global<br />
network of Trade Development Staff, to<br />
help you successfully win business overseas.<br />
We treat every business as an individual<br />
– that’s why we provide a tailored service,<br />
with specialist support covering a wide<br />
range of industries.<br />
Our capacity-building services can make a<br />
real difference to your business at a very<br />
reasonable price. To use our services, your<br />
firm may need to meet certain eligibility<br />
criteria. Your International Trade Adviser<br />
(or equivalent person in Scotl<strong>and</strong>, Wales<br />
<strong>and</strong> Northern Irel<strong>and</strong>) will be able to<br />
explain in more depth what these criteria<br />
are <strong>and</strong> advise you on costs.<br />
For more information, visit www.ukti.gov.uk<br />
16
RESEARCHING THE MARKET<br />
WHERE TO BEGIN<br />
Doing business with <strong>Taiwan</strong><br />
may seem rather daunting for<br />
those new to the market, but<br />
taking a strategic approach<br />
is the key.<br />
Companies should conduct<br />
reliable research before<br />
venturing into business in any<br />
new territory <strong>and</strong> <strong>Taiwan</strong> is<br />
no exception. Good research<br />
saves money <strong>and</strong> improves<br />
efficiency <strong>and</strong> performance<br />
right from the start.<br />
Desk research<br />
General introductory business information<br />
about <strong>Taiwan</strong> is readily available <strong>and</strong><br />
companies can obtain a reasonable amount<br />
of preliminary insight through desk research.<br />
Economic research <strong>and</strong> sector analysis<br />
can be obtained from a large number of<br />
leading consultancies, research agencies <strong>and</strong><br />
public‐sector trade promotion organisations.<br />
Furthermore, the increasing use of<br />
e-commerce <strong>and</strong> B2B websites in <strong>Taiwan</strong><br />
has made it possible to identify, <strong>and</strong> gain<br />
access to, potential partners across the<br />
globe. A good place to start is the UKTI<br />
website, www.ukti.gov.uk, which provides<br />
detailed country <strong>and</strong> sector information.<br />
Registration is free <strong>and</strong> offers additional<br />
benefits, such as access to business<br />
opportunity alerts <strong>and</strong> information updates.<br />
17
RESEARCHING THE MARKET<br />
WHERE TO BEGIN (Continued)<br />
Consultation <strong>and</strong> bespoke research<br />
You should not rely solely on desk research.<br />
Websites <strong>and</strong> online materials can be<br />
out‐of-date <strong>and</strong> the quality <strong>and</strong> reliability<br />
of content varies widely. Sometimes<br />
you may simply be unable to find the<br />
information you’re looking for. This is<br />
why it is essential to verify initial research<br />
findings <strong>and</strong> conduct further investigations.<br />
Often this requires you to map out a<br />
bespoke research brief with the help of<br />
specialists, exploring what additional<br />
information you might need to make an<br />
effective entry into the market <strong>and</strong> how<br />
you can make the contacts vital to success.<br />
UKTI offers a range of support services to<br />
UK businesses interested in researching the<br />
<strong>Taiwan</strong>ese market.<br />
Speaking to an expert<br />
UKTI provides support for UK companies<br />
through a network of International Trade<br />
Teams based in the English regions. UKTI<br />
services are also available to companies in<br />
Scotl<strong>and</strong>, Wales <strong>and</strong> Northern Irel<strong>and</strong>.<br />
To arrange a consultation with your<br />
local International Trade Adviser, call<br />
+44 (0)20 7215 8000 or use the database<br />
at www.ukti.gov.uk<br />
Overseas Market Introduction Service<br />
The Overseas Market Introduction Service<br />
(OMIS) is a UKTI service available to<br />
companies interested in finding out more<br />
about an overseas market. In <strong>Taiwan</strong>, it can<br />
assist you by undertaking tailored research<br />
using UKTI’s extensive network of dedicated<br />
researchers based across the country.<br />
OMIS can provide:<br />
• Market research <strong>and</strong> analysis<br />
- Sector reports<br />
- Market initiatives<br />
- Regulatory environment<br />
- Market opportunities<br />
• Identification of local contacts<br />
- Agents<br />
- Distributors<br />
- Suppliers<br />
- Potential partners<br />
• In-market activities<br />
- Meeting arrangements<br />
- Event organisation, such as workshops,<br />
seminars, receptions, promotional<br />
activities <strong>and</strong> product launches<br />
- Media relations <strong>and</strong> publicity<br />
- Official premises <strong>and</strong> facilities<br />
For more information about how OMIS<br />
could help you in <strong>Taiwan</strong>, please contact<br />
your International Trade Adviser.<br />
18 18
Events <strong>and</strong> seminars<br />
UKTI organises events, seminars <strong>and</strong><br />
workshops in the UK <strong>and</strong> <strong>Taiwan</strong>, covering<br />
a wide range of business interests <strong>and</strong><br />
issues. Not only do these inform companies<br />
about business opportunities <strong>and</strong> offer the<br />
latest market information, they also provide<br />
a valuable platform for networking <strong>and</strong><br />
sharing experiences with like-minded peers,<br />
not to mention regular access to visiting<br />
<strong>Taiwan</strong>ese delegations.<br />
Sign up to a forthcoming event by visiting<br />
www.ukti.gov.uk<br />
Market visits <strong>and</strong> trade missions<br />
Visiting <strong>Taiwan</strong> is an invaluable part of the<br />
process of market entry. You will experience<br />
the marketplace first-h<strong>and</strong>, <strong>and</strong> make the<br />
contacts necessary to do business. This is<br />
essential, but it will be much more effective<br />
with careful planning.<br />
UKTI organises regular trade missions<br />
to <strong>Taiwan</strong> where you can benefit from<br />
group activities, in addition to your own<br />
programme.<br />
OMIS can be used to support visits,<br />
providing bespoke meeting arrangements<br />
with appropriate potential partners,<br />
agents <strong>and</strong> distributors, or with relevant<br />
government officials.<br />
Questions to ask yourself before<br />
you begin:<br />
• What are our business’ unique selling<br />
points? Is there likely to be a market<br />
for our product or service in <strong>Taiwan</strong>?<br />
• Are there any legal barriers to our<br />
business model?<br />
• Whereabouts in <strong>Taiwan</strong> should we<br />
start?<br />
• Do we have sufficient resources<br />
(management time, project finance<br />
<strong>and</strong> expenses) to fund our <strong>Taiwan</strong><br />
project?<br />
• Who will be leading the project within<br />
our company?<br />
• Do we need to work with a partner<br />
in <strong>Taiwan</strong> to succeed? If so, can we<br />
communicate effectively with them?<br />
• Have we evaluated business<br />
risks (such as protecting our IP)<br />
<strong>and</strong> conducted research <strong>and</strong> due<br />
diligence?<br />
• Do we know how to secure payments<br />
<strong>and</strong> get the right quality products?<br />
It is unlikely that you will have the<br />
answers to all these questions at the<br />
outset <strong>and</strong> these “knowledge gaps”<br />
should form the basis of further research<br />
<strong>and</strong> investigation.<br />
19
RESEARCHING THE MARKET<br />
HOW WE CAN HELP YOU<br />
UKTI provides a wide range<br />
of trade development<br />
services designed to help<br />
UK companies succeed<br />
in international markets.<br />
Some of these services are<br />
provided at zero or heavily<br />
subsidised cost. All are<br />
delivered by experts with<br />
extensive experience of<br />
overseas trade <strong>and</strong> detailed<br />
knowledge of the global<br />
marketplace. If you are<br />
considering doing business<br />
in <strong>Taiwan</strong>, talk to us about<br />
how we can help you achieve<br />
your goals.<br />
Overseas Market Introduction Service<br />
(OMIS) is a chargeable UKTI-led, tailored<br />
service to access market <strong>and</strong> industry<br />
information, identify potential contacts or<br />
assist in planning an event.<br />
Passport to Export provides new <strong>and</strong><br />
inexperienced exporters with the training,<br />
planning advice <strong>and</strong> ongoing support they<br />
need to succeed overseas.<br />
Gateway to Global Growth is a free service<br />
to experienced exporters. It offers a strategic<br />
review, planning advice <strong>and</strong> support to help<br />
companies build on their previous success<br />
<strong>and</strong> develop new overseas markets.<br />
Events <strong>and</strong> seminars are held across the UK<br />
<strong>and</strong> <strong>Taiwan</strong>. They include specific sectorbased<br />
activities.<br />
Trade missions are organised to help<br />
UK companies visit the market they’re<br />
interested in <strong>and</strong> talk face-to-face with<br />
prospective business partners. UKTI also<br />
organises missions in the UK to allow<br />
overseas delegates to meet with potential<br />
UK partners or investors.<br />
<strong>Business</strong> opportunities can be emailed<br />
directly into your in-box, highlighting<br />
hot leads in your chosen overseas market.<br />
Companies can sign up for this free service<br />
by visiting www.ukti.gov.uk<br />
20
Export Communications Review (ECR)<br />
assesses the way companies communicate<br />
with overseas customers <strong>and</strong> makes practical<br />
recommendations for improvement. The<br />
service is managed for UKTI by the British<br />
Chambers of Commerce.<br />
Export Marketing Research Scheme (EMRS)<br />
offers support, advice <strong>and</strong> grant funding<br />
to eligible companies wishing to research<br />
a potential export market. The service is<br />
managed for UKTI by the British Chambers<br />
of Commerce.<br />
To contact UKTI in <strong>Taiwan</strong> directly:<br />
UKTI <strong>Taiwan</strong><br />
British Trade & Cultural Office<br />
26F, 9-11 Song Gao Road<br />
Taipei, 11073<br />
<strong>Taiwan</strong>.<br />
Tel: +886 (2) 8758 2088<br />
Fax: +886 (2) 8758 2050<br />
Email: info.taipei@fco.gov.uk<br />
http://ukintaiwan.fco.gov.uk<br />
FCO Country Updates provide authoritative<br />
analyses of emerging markets <strong>and</strong> identify<br />
key issues relevant to UK businesses. The<br />
updates are compiled by British embassies<br />
across the world, which have access to<br />
high-level government <strong>and</strong> business<br />
contacts. www.fco.gov.uk<br />
For more information on any of these<br />
services, please contact your local<br />
International Trade Team.<br />
21
Market Entry<br />
Choosing the right LOCATION<br />
Geography<br />
<strong>Taiwan</strong> is located 100 miles across the<br />
<strong>Taiwan</strong> Strait from mainl<strong>and</strong> China,<br />
between Japan <strong>and</strong> the Philippines. It is an<br />
isl<strong>and</strong> nation, comprising the main isl<strong>and</strong><br />
of <strong>Taiwan</strong>, along with Penghu, Kinmen <strong>and</strong><br />
Matsu. <strong>Taiwan</strong> is 250 miles long <strong>and</strong> 88<br />
miles across – roughly the size of Wales.<br />
A rugged mountain range, the second<br />
highest in Asia after the Himalayas, covers<br />
more than half of the main isl<strong>and</strong>. The<br />
tallest mountain is Yushan, or “Jade<br />
Mountain”, which rises to 12,966 feet<br />
(3,952 metres) above sea level <strong>and</strong> st<strong>and</strong>s<br />
at the heart of Yushan National Park.<br />
Approximately 60 per cent of <strong>Taiwan</strong> is<br />
covered by forest. Having such a limited<br />
usable l<strong>and</strong> area makes it the second most<br />
densely populated country in the world.<br />
Climate<br />
The climate of <strong>Taiwan</strong> is sub-tropical,<br />
except for the extreme south which is<br />
tropical. Occasionally, typhoons hit the<br />
isl<strong>and</strong> during May to September. Apart<br />
from this, <strong>Taiwan</strong>’s weather is temperate,<br />
with average temperatures of 22°C<br />
(summer temperatures are around 35°C<br />
in July; winter temperatures are around<br />
12°C in January).<br />
Centres of business<br />
<strong>Taiwan</strong> has five special municipalities<br />
(Taipei, Xinbei, Taichung, Tainan <strong>and</strong><br />
Kaohsiung), which are home to more than<br />
13.7 million residents. The most important<br />
commercial centres are Taipei, to the north,<br />
<strong>and</strong> Kaohsiung to the south.<br />
Taipei is the capital of <strong>Taiwan</strong> <strong>and</strong> the<br />
country’s political, economic <strong>and</strong> cultural<br />
heart. The Taipei metropolitan area (which<br />
includes Taipei, Xinbei <strong>and</strong> Keelung) has<br />
a population of over 6.7 million people.<br />
The city is served by two airports, Taipei<br />
Songshan <strong>and</strong> <strong>Taiwan</strong> Taoyuan, <strong>and</strong> has<br />
high-speed rail <strong>and</strong> road links to the rest<br />
of the isl<strong>and</strong>. Taipei also has a modern <strong>and</strong><br />
efficient public transport system, with five<br />
metro lines in operation. Many of <strong>Taiwan</strong>’s<br />
leading companies have their headquarters<br />
there, including ASUS, Chunghwa Telecom,<br />
M<strong>and</strong>arin Airlines <strong>and</strong> Tatung. For more<br />
information visit http://english.taipei.gov.tw<br />
Kaohsiung is the second-largest city<br />
in <strong>Taiwan</strong>, with a population of 2.9<br />
million people. It is one of five special<br />
municipalities in <strong>Taiwan</strong> <strong>and</strong> a centre for<br />
manufacturing, refining, shipbuilding,<br />
light <strong>and</strong> heavy industries. Kaohsiung<br />
International Airport is the second-largest<br />
airport in <strong>Taiwan</strong>, while its port is the<br />
country’s biggest. The city was host of<br />
the 2009 World Games <strong>and</strong> is home to<br />
the Republic of China navy.<br />
22
Taichung is situated in west-central<br />
<strong>Taiwan</strong>. The city’s Industrial Zone has<br />
the World Trade Centre building as its<br />
focal point, which plays host to national<br />
<strong>and</strong> international exhibitions. Taichung is<br />
home to Giant Bicycles <strong>and</strong> Nike’s Asian<br />
design centre <strong>and</strong>, with a population of<br />
2.6 million, is the third-largest city in the<br />
country. For more information visit<br />
http://english.taichung.gov.tw/internet/english<br />
Hsinchu Science <strong>and</strong> Industrial Park,<br />
located in Hsinchu City in the north,<br />
is one of the world’s leading centres of<br />
semiconductor manufacturing. More<br />
than 400 high-tech companies have a<br />
presence there, including the world’s<br />
top two semiconductor manufacturers,<br />
<strong>Taiwan</strong> Semiconductor Manufacturing<br />
Company <strong>and</strong> United Microelectronics<br />
Corporation. <strong>Taiwan</strong> has the world’s<br />
highest concentration of 12-inch<br />
wafer‐producing fabs, most of which<br />
are located at the Park. Close by are<br />
National Chiao Tung University <strong>and</strong><br />
National Tsing Hua University.<br />
23
Market Entry<br />
Establishing a presence<br />
Direct sales into <strong>Taiwan</strong> can be difficult.<br />
For most UK companies, it is more effective<br />
to approach the market through local<br />
business partners (agents <strong>and</strong> distributors),<br />
who have the ability to distribute <strong>and</strong><br />
provide locally based technical support.<br />
Licensing <strong>and</strong> franchising are also<br />
increasingly popular options.<br />
It is possible to set up a company office,<br />
branch office, representative office,<br />
job‐site office or joint venture in <strong>Taiwan</strong>.<br />
Mergers <strong>and</strong> acquisitions are also an<br />
option, although you need to be aware of<br />
fair trade <strong>and</strong> anti-trust issues. Refer to<br />
page 26 for full descriptions of each of<br />
these options. If you are planning to do<br />
business in <strong>Taiwan</strong>, consult a lawyer about<br />
the possible options <strong>and</strong> how you plan<br />
to conduct the operation. UKTI can help<br />
you to identify local <strong>and</strong> international law<br />
<strong>and</strong> consultancy firms who can help. We<br />
can also provide validated lists of agents/<br />
potential partners, key market players <strong>and</strong><br />
potential customers; approach contacts on<br />
your behalf to establish if they are interested<br />
in working with you; as well as arranging<br />
appointments <strong>and</strong> organising events.<br />
Agents <strong>and</strong> distributors<br />
An agent is a company’s direct<br />
representative in a market <strong>and</strong> is paid<br />
commission, whereas a distributor buys<br />
products from the manufacturer <strong>and</strong> sells<br />
them on to customers. The difference<br />
between the cost of purchasing products<br />
<strong>and</strong> selling them on (the profit) forms the<br />
distributor’s income.<br />
Entering a market by working with an agent<br />
or distributor can have several advantages.<br />
It reduces time <strong>and</strong> costs, <strong>and</strong> companies<br />
gain the local knowledge <strong>and</strong> networks of<br />
the agent/distributor in question. However,<br />
there are also some drawbacks. Employing<br />
a third party results in an additional cost<br />
to your products <strong>and</strong> you may also lose<br />
some control <strong>and</strong> visibility over sales <strong>and</strong><br />
marketing. It can also have implications<br />
for intellectual property rights protection,<br />
increasing the risk of your product being<br />
copied or counterfeited.<br />
In <strong>Taiwan</strong>, the Statute for Encouraging<br />
Foreign Profit-Seeking Enterprises to<br />
Establish Distribution Centres was passed<br />
in 2001. This sets out the regulations for<br />
establishing international distribution<br />
agreements <strong>and</strong> logistics centres <strong>and</strong><br />
authorises tax incentives for foreign<br />
investors. The <strong>Taiwan</strong>ese Civil Code <strong>and</strong> the<br />
Fair Trade Law govern the management of<br />
distributorships, while agency agreements<br />
are governed by the Civil Code alone. You<br />
need to ensure that you organise tax affairs<br />
correctly, as agents are considered business<br />
agents for income-tax purposes if they sign<br />
contracts, accept purchase orders <strong>and</strong> store<br />
<strong>and</strong> dispatch goods on behalf of a foreign<br />
company. A business agent is subject to<br />
24
<strong>Taiwan</strong>ese taxes <strong>and</strong> must file tax returns<br />
on behalf of the foreign company.<br />
Given these considerations, you need to<br />
select agents <strong>and</strong> distributors carefully.<br />
Your local UKTI office can advise you on<br />
how to commission a tailored report for<br />
your specific needs <strong>and</strong> can also provide a<br />
list of the best potential partners. A visit<br />
to <strong>Taiwan</strong> will enable you to meet some<br />
of them <strong>and</strong> appoint a local contact.<br />
Suggested questions to ask agents/distributors<br />
are listed below. You should also conduct<br />
due diligence to verify this information.<br />
Background<br />
• Company size, history <strong>and</strong> ownership<br />
(private or state-owned)<br />
• Quality <strong>and</strong> quantity of the sales force<br />
• Customer feedback <strong>and</strong> trade/bank<br />
references<br />
Distribution channels<br />
• Regional coverage<br />
• Types of outlets covered <strong>and</strong> frequency<br />
of visits<br />
• Transportation <strong>and</strong> warehousing facilities<br />
Are they right for you?<br />
• Does the agent/distributor have a<br />
genuine interest in representing your<br />
product?<br />
• Can they benefit from actively promoting<br />
your interests (is it a win-win)?<br />
• Do they also represent any competing<br />
companies/products?<br />
• Can you communicate effectively with<br />
your counterpart?<br />
Once a working relationship has been<br />
established, the agent/distributor needs to<br />
be managed actively by you:<br />
• visiting as regularly as is practicable at<br />
a senior management level. This shows<br />
interest in, <strong>and</strong> commitment to, the<br />
agent <strong>and</strong> the market. It will also provide<br />
you with an opportunity to learn about<br />
conditions in the market <strong>and</strong> see how<br />
your products are doing<br />
• working closely with the agent to show<br />
them how they can profit from your<br />
products<br />
• helping to prepare marketing <strong>and</strong> sales<br />
plans for the agent<br />
• providing regular training for sales staff<br />
<strong>and</strong> after-sales training for technical staff<br />
in the UK<br />
• linking performance to incentives <strong>and</strong><br />
agreeing milestone targets.<br />
There is additional guidance on working<br />
with <strong>Taiwan</strong>ese partners in later sections of<br />
this <strong>Guide</strong>.<br />
25
Market Entry<br />
Establishing A Presence (CONTINUED)<br />
Licensing <strong>and</strong> franchising<br />
Licensing <strong>and</strong> franchising are alternative<br />
approaches to selling products <strong>and</strong> services,<br />
but the exact business model will vary,<br />
depending on the sector <strong>and</strong> company.<br />
A business may license the use of its<br />
copyright, trademark, patent, technological<br />
knowledge <strong>and</strong> other intellectual property<br />
rights to manufacture <strong>and</strong> sell products or<br />
render services. Such licences need not be<br />
government-approved, although patent <strong>and</strong><br />
trademark licences must be reported to the<br />
<strong>Taiwan</strong> Intellectual Property Office. UKTI in<br />
<strong>Taiwan</strong> can provide detailed guidance on<br />
this, <strong>and</strong> franchising options.<br />
Establishing a permanent presence<br />
Having a permanent in-market presence<br />
can have several benefits, including:<br />
• demonstrating commitment<br />
• cutting out the ‘middle man’, providing<br />
direct access to the end customer/<br />
supplier<br />
• giving direct control over corporate<br />
strategy <strong>and</strong> activities<br />
• enabling trading in the local currency<br />
<strong>and</strong> easing the conduct of business<br />
transactions<br />
• fulfilling a legal requirement to have a<br />
permanent presence (relevant in certain<br />
business activities <strong>and</strong> sectors).<br />
have a <strong>Taiwan</strong>ese partner. However, this<br />
has now changed, thanks to the <strong>Taiwan</strong>ese<br />
government’s continued efforts to ease<br />
regulations <strong>and</strong> encourage more foreign<br />
investors in most industry sectors, such as<br />
consumer goods, banking <strong>and</strong> retailing.<br />
For sectors like infrastructure, defence <strong>and</strong><br />
safety‐related industries, UK companies<br />
would still need a local partner. Please<br />
contact UKTI <strong>Taiwan</strong> for advice.<br />
Deciding what constitutes an appropriate<br />
legal entity for your business depends on<br />
your intended scope. There are a number<br />
of legal structures that allow foreign<br />
investors to do business in <strong>Taiwan</strong>, as<br />
outlined on page 28. Each has its own<br />
advantages, restrictions <strong>and</strong> drawbacks,<br />
so it is essential to choose the option best<br />
suited to your aims.<br />
It is usually more difficult to alter a<br />
business structure once a legal entity has<br />
been incorporated or established, so it is<br />
essential to seek professional advice during<br />
the early stages of planning. UKTI can<br />
offer dedicated one-to-one consulting<br />
<strong>and</strong> incorporation services to assist UK<br />
companies establishing various kinds of<br />
permanent presence in <strong>Taiwan</strong>. Please<br />
contact us for more details.<br />
In the past, foreign investors who wanted<br />
to do business in <strong>Taiwan</strong> were required to<br />
26
Market Entry<br />
Establishing A Presence (CONTINUED)<br />
Legal structures<br />
Foreign investors in <strong>Taiwan</strong> can choose<br />
whether to set up a company office, a<br />
representative office, a branch office<br />
or a job-site office, according to their<br />
planned activities. A brief description<br />
of each option is provided below. The<br />
PricewaterhouseCoopers guide Doing<br />
<strong>Business</strong> in <strong>Taiwan</strong> (www.pwc.com/tw/en/<br />
publications/doing-business-in-taiwan.<br />
jhtml) contains detailed information<br />
about setting up a business in <strong>Taiwan</strong>.<br />
Further information is also available from<br />
UKTI in <strong>Taiwan</strong>.<br />
Representative offices<br />
Representative offices are often the first<br />
step taken by foreign companies when<br />
establishing a permanent presence in <strong>Taiwan</strong>.<br />
They provide a vehicle through which the<br />
foreign investor can undertake activities<br />
such as market research, customer liaison<br />
<strong>and</strong> support. Representative offices can<br />
also organise business visits from company<br />
headquarters, which can make the process<br />
of obtaining business visas for visitors<br />
much easier. Public-relations work <strong>and</strong> local<br />
administration are also permitted. However,<br />
a representative office cannot conduct sales<br />
activities. This means they cannot sign<br />
contracts, receive income or issue invoices<br />
<strong>and</strong> tax receipts. Applications to establish<br />
a representative office should be made to<br />
the <strong>Taiwan</strong>ese Ministry of Economic Affairs<br />
(MOEA, www.moea.gov.tw).<br />
Branch offices<br />
Foreign investors wishing to open a branch<br />
office must apply for a Certificate of<br />
Recognition <strong>and</strong> then obtain a Certificate<br />
of PSE (Profit-Seeking Enterprise) from<br />
the relevant <strong>Taiwan</strong>ese government<br />
agencies. Special permits are required<br />
for certain types of businesses. For more<br />
details, contact the MOEA. Branch offices<br />
can be used for companies that do not<br />
plan to have their head office in <strong>Taiwan</strong>.<br />
There is no minimum working capital<br />
requirement if the branch’s activities relate<br />
to international trade, but the head office<br />
must remit sufficient funds to enable the<br />
branch to operate. It must also appoint<br />
a branch manager <strong>and</strong> a litigious <strong>and</strong><br />
non‐litigious representative, who can either<br />
be <strong>Taiwan</strong>ese citizens or foreign nationals.<br />
Company offices<br />
Foreign investors need to obtain approval<br />
from the MOEA’s Investment Commission<br />
to set up a company in <strong>Taiwan</strong>. Once<br />
approval has been obtained, it is possible<br />
for foreign investors, with the exception<br />
of those working in certain restricted<br />
industries, to establish an unlimited<br />
company, an unlimited company with<br />
limited-liability shareholders, a limited<br />
company, or a company limited by shares.<br />
28
Job-site offices<br />
Job-site offices are ideal for foreign<br />
investors who intend to contract longterm<br />
construction work in <strong>Taiwan</strong> (for<br />
example, foreign construction companies<br />
that undertake government projects<br />
there). A taxable, though not a legal,<br />
entity, job-site offices need only apply<br />
for business registration, as opposed to<br />
corporate registration. They are required<br />
to pay business tax <strong>and</strong> income tax <strong>and</strong><br />
are permitted to make purchases <strong>and</strong> issue<br />
government uniform invoices.<br />
Joint ventures<br />
The term “joint venture” is not statutorily<br />
defined in <strong>Taiwan</strong>ese law. In its broadest<br />
sense, a joint venture (JV) is a co-operation<br />
between two or more parties in a common<br />
undertaking. Usually this refers to an<br />
incorporated JV company, but in <strong>Taiwan</strong> it<br />
is acceptable for a JV structure to be one in<br />
which there are two or more distinct legal<br />
entities that maintain separate identities.<br />
In certain government contracts, for<br />
example, JV partners issue invoices <strong>and</strong> are<br />
paid separately, based on the percentage<br />
of participation. Each party files a tax<br />
return <strong>and</strong> pays its taxes separately.<br />
Mergers <strong>and</strong> acquisitions<br />
The Financial Institution Mergers Act <strong>and</strong><br />
the Financial Holding Company Act govern<br />
consolidation among financial institutions<br />
in <strong>Taiwan</strong>. Other industries are governed<br />
by the <strong>Business</strong> Mergers <strong>and</strong> Acquisitions<br />
Act. Under certain circumstances, mergers<br />
may need to be submitted to <strong>Taiwan</strong>’s<br />
Fair Trade Commission. There may be tax<br />
incentives available if the proposed merger/<br />
acquisition meets certain criteria.<br />
29
Market Entry<br />
Establishing A Presence (CONTINUED)<br />
Foreign firms wishing to invest in or merge<br />
with companies in <strong>Taiwan</strong> should contact<br />
the MOEA’s Investment Commission.<br />
Regulatory agencies<br />
For UK companies considering establishing<br />
a presence in <strong>Taiwan</strong>, the following<br />
regulatory agencies provide useful sources<br />
of information:<br />
• Ministry of Economic Affairs (MOEA):<br />
issues business laws <strong>and</strong> regulations.<br />
Agencies include the Department of<br />
Commerce, the Investment Commission<br />
<strong>and</strong> the Industrial Development Bureau<br />
www.moea.gov.tw<br />
• Bureau of Foreign Trade: an agency<br />
of the MOEA, responsible for executing<br />
trade policies <strong>and</strong> promoting trade<br />
www.trade.gov.tw<br />
• <strong>Taiwan</strong> Intellectual Property Office:<br />
for patent, trademark <strong>and</strong> copyright issues<br />
www.tipo.gov.tw<br />
• Financial Supervisory Commission:<br />
supervises banking, securities <strong>and</strong><br />
insurance industries<br />
www.fsc.gov.tw<br />
• Ministry of Finance: administration<br />
of taxation <strong>and</strong> customs<br />
www.mof.gov.tw<br />
• Fair Trade Commission: competition<br />
policy <strong>and</strong> fair trade<br />
www.ftc.gov.tw<br />
• Food <strong>and</strong> Drug Administration:<br />
established on 1 January 2010 for the<br />
licensing <strong>and</strong> inspection of food <strong>and</strong><br />
pharmaceutical products<br />
www.fda.gov.tw<br />
• Environmental Protection Administration:<br />
sets pollution control regulations <strong>and</strong><br />
protects the natural environment<br />
www.epa.gov.tw<br />
• Council for Labour Affairs: administers<br />
labour policies <strong>and</strong> regulations<br />
www.cla.gov.tw<br />
• Invest in <strong>Taiwan</strong> Office: a ‘one-stop shop’<br />
for companies looking to invest or register<br />
in <strong>Taiwan</strong><br />
http://investtaiwan.nat.gov.tw/library/<br />
main_eng_general.jsp<br />
30
Getting Started<br />
FINDING A CUSTOMER OR PARTNER<br />
Once you have identified the<br />
best market-entry option for<br />
your company in <strong>Taiwan</strong>, the<br />
next step is to find potential<br />
customers or partners.<br />
Tried <strong>and</strong> trusted methods include:<br />
• Overseas Market Introduction Service<br />
(OMIS)<br />
OMIS can tailor-make a list of potential<br />
customers, agents, distributors or partners<br />
<strong>and</strong> arrange a programme of meetings with<br />
them when you visit <strong>Taiwan</strong>. OMIS can also<br />
be used to arrange a seminar or productintroduction<br />
event in <strong>Taiwan</strong>, which can be<br />
an effective way of getting your message<br />
across to a number of potential customers.<br />
• Trade shows <strong>and</strong> exhibitions<br />
Trade shows <strong>and</strong> exhibitions take place in<br />
<strong>Taiwan</strong> throughout the year <strong>and</strong> can be an<br />
excellent way to meet potential customers<br />
face-to-face. Arranging appointments in<br />
advance with pre-identified contacts is<br />
essential if you want to make effective<br />
use of your time.<br />
• UKTI-supported trade missions<br />
UKTI supports a large number of trade<br />
missions to <strong>Taiwan</strong>, organised by trade<br />
associations <strong>and</strong> local chambers of<br />
commerce. They provide an excellent<br />
opportunity for businesses to visit the<br />
country to find out how business is done<br />
<strong>and</strong> generate valuable sales leads.<br />
32
Getting Started<br />
Due Diligence<br />
Many of the problems that foreign companies<br />
encounter when doing business in <strong>Taiwan</strong><br />
could have been avoided by carrying out some<br />
due diligence at the outset.<br />
There are different levels of due diligence,<br />
appropriate for different situations. If your<br />
sole interest is in exporting, the best proof<br />
of a <strong>Taiwan</strong>ese company’s ability to pay is a<br />
letter of credit from the bank. If a company<br />
can produce this, you do not need to check<br />
its financial st<strong>and</strong>ing as the bank will already<br />
have done so.<br />
A very simple piece of due diligence is to<br />
obtain a copy of a company’s business<br />
licence. This will tell you the following:<br />
• the legal representative of the company<br />
• the name <strong>and</strong> address of the company<br />
• the amount of registered capital, which is<br />
also its limited liability<br />
• the type of company<br />
• the business scope<br />
• the date the company was established <strong>and</strong><br />
the period covered by the licence.<br />
You should check that the information<br />
contained in the business licence matches<br />
what you already know <strong>and</strong>, if it doesn’t,<br />
then find out why. If you want to verify<br />
the information externally, you should go<br />
through the Commercial Department at<br />
the MOEA or a local lawyer. You will have<br />
more security if you know who the legally<br />
responsible person is, so find out who you<br />
are dealing with.<br />
The shareholders of the company are responsible<br />
for the amount of liability as stated as registered<br />
capital on the business licence. You can check<br />
whether or not the registered capital has been<br />
paid up by using a firm of accountants to get<br />
a Capital Verification Report.<br />
If you want to establish a business<br />
relationship that goes beyond exporting,<br />
you will need to carry out further research.<br />
It is not enough simply to obtain a copy of<br />
a company’s accounts, as they may not be<br />
accurate. Accounts in <strong>Taiwan</strong> are unlikely<br />
to be audited to the st<strong>and</strong>ards routinely<br />
expected in the UK, <strong>and</strong> companies may<br />
have different sets of accounts for different<br />
audiences, so it is advisable to use such data<br />
in conjunction with information obtained<br />
from elsewhere.<br />
Good-quality consultancy <strong>and</strong> assistance<br />
are available from firms resident in <strong>Taiwan</strong><br />
<strong>and</strong> the UK. These companies can carry out<br />
operational, financial, legal <strong>and</strong> technical<br />
due-diligence checks, typically by looking<br />
at the actual operation of the business,<br />
<strong>and</strong> building up a more accurate picture<br />
by carefully interviewing people who work<br />
in <strong>and</strong> with the firm. UKTI has lists of<br />
consultancies based in the UK <strong>and</strong> <strong>Taiwan</strong><br />
that can provide due-diligence checks on<br />
<strong>Taiwan</strong>ese companies.<br />
33
Getting Started<br />
Employing staff<br />
<strong>Taiwan</strong> has a motivated <strong>and</strong> highly<br />
educated workforce. Workers here will<br />
have undergone nine years of compulsory<br />
education, with extensive opportunities for<br />
higher education in the country’s colleges<br />
<strong>and</strong> universities. <strong>Taiwan</strong> is world-renowned<br />
for its research in physics, engineering,<br />
agriculture, medicine, biotechnology,<br />
literature <strong>and</strong> art history. <strong>Taiwan</strong>ese<br />
workers are characterised by their diligence<br />
<strong>and</strong> interest in learning <strong>and</strong> development<br />
at every stage of their career path.<br />
<strong>Taiwan</strong> has faced labour shortages in<br />
recent years, due to the fast pace of<br />
economic growth. Consequently, it is<br />
keen to attract high-quality skills from<br />
overseas <strong>and</strong> has lifted any restrictions on<br />
employing foreign workers. By July 2009,<br />
foreign workers accounted for 3.2 per cent<br />
of <strong>Taiwan</strong>’s total workforce.<br />
The Labour St<strong>and</strong>ards Act stipulates<br />
minimum st<strong>and</strong>ards for working conditions<br />
in <strong>Taiwan</strong>, including minimum wages,<br />
working hours, holidays <strong>and</strong> severance<br />
pay. The country has established a labour<br />
management committee whose aim is<br />
to promote good employer-employee<br />
collaboration <strong>and</strong> establish labour welfare<br />
schemes. More information is available<br />
at http://investtaiwan.nat.gov.tw/matter/<br />
show_eng.jsp?ID=11&MID=3<br />
You will find details of labour-related<br />
health insurance, pensions <strong>and</strong> labour<br />
regulations in the PricewaterhouseCoopers<br />
guide Doing <strong>Business</strong> in <strong>Taiwan</strong><br />
(www.pwc.com/tw/en/publications/doingbusiness-in-taiwan.jhtml)<br />
Recruitment channels<br />
There are several channels for recruiting<br />
staff in <strong>Taiwan</strong>, particularly web‐based<br />
channels given the high internet<br />
penetration in the country:<br />
• Advertise jobs to UK graduates on the<br />
UK’s official graduate careers website,<br />
www.prospects.ac.uk/taiwan_job_market.<br />
htm<br />
• Online job services, such as<br />
http://hirecruit.nat.gov.tw/english<br />
www.jobera.com <strong>and</strong><br />
www.taiwanesecareers.com<br />
• Classified job adverts in English are<br />
available in English-language daily<br />
newspapers, such as The China Post,<br />
<strong>Taiwan</strong> News <strong>and</strong> Taipei Times<br />
• Other newspapers (some of which have<br />
English-language pages) include: United<br />
Daily News, China Times <strong>and</strong> Liberty<br />
Times<br />
• Trade media for key industry sectors,<br />
such as DIGITIMES, <strong>Business</strong> Today<br />
Weekly, International Trade Biweekly<br />
<strong>and</strong> <strong>Business</strong> Next. For industry-specific<br />
periodicals, please contact the relevant<br />
UKTI Commercial Officer in <strong>Taiwan</strong><br />
34
• Recruitment companies such as Adecco<br />
have offices in <strong>Taiwan</strong>. (www.adecco.<br />
com.tw/eng). Local people tend to use<br />
websites to find jobs, such as 104 Job<br />
Bank (www.104.com.tw).<br />
• Contact the British Trade <strong>and</strong> Cultural<br />
Office, the British Chamber of Commerce<br />
or educational institutes.<br />
Recruitment process<br />
When you are recruiting in <strong>Taiwan</strong>, make<br />
sure that you carry out all the normal steps<br />
that you would if hiring in the UK.<br />
• Ensure that c<strong>and</strong>idates’ technical <strong>and</strong><br />
linguistic capabilities match their claims<br />
<strong>and</strong> that you hire staff at the right level<br />
for the role.<br />
• Carry out due diligence. This includes<br />
conducting personal background checks<br />
<strong>and</strong> checking all references before<br />
offering the position.<br />
• Offer appropriate remuneration.<br />
<strong>Taiwan</strong>ese labour regulations stipulate<br />
that wages must not be less than the<br />
statutory minimum <strong>and</strong> must be paid at<br />
least twice a month, or in advance on a<br />
monthly basis. The Council for Labour<br />
Affairs is responsible for administering<br />
policies <strong>and</strong> issuing work permits for<br />
foreign professionals, www.cla.gov.tw.<br />
Talk to UKTI <strong>Taiwan</strong> for advice on<br />
appropriate salary levels for particular<br />
types of employment.<br />
Overseas training<br />
Offering employees the opportunity to<br />
train overseas is very attractive at all levels.<br />
Make sure that in return for providing such<br />
training, employees make a commitment<br />
to stay with your company for a specified<br />
period of time.<br />
A word of caution: A lot of smaller<br />
companies setting up an office in <strong>Taiwan</strong><br />
may well just employ one person to deal<br />
with all aspects of running the business.<br />
Although this may be convenient <strong>and</strong><br />
cost-effective, it might not be the best way<br />
to run your operation. If your employee is<br />
not familiar with the rules <strong>and</strong> regulations<br />
pertaining to running an international<br />
office or business in <strong>Taiwan</strong>, then you<br />
may soon have to deal with issues of<br />
non‐compliance, which could prove very<br />
costly. Moreover, having one person in<br />
control of all financial <strong>and</strong> legal aspects<br />
of the business is obviously risky.<br />
35
Getting Started<br />
language<br />
Working hours<br />
Working hours in <strong>Taiwan</strong> are:<br />
9.00 to 18.00 Monday to Friday<br />
Public holidays<br />
Public holidays in <strong>Taiwan</strong> reflect<br />
both Chinese <strong>and</strong> Western<br />
influences. Traditional festivals<br />
(holidays) include:<br />
• Chinese New Year – Lunar New<br />
Year’s Eve <strong>and</strong> first three days of<br />
the first lunar month<br />
• Dragon Boat Festival – fifth day<br />
of the fifth lunar month<br />
• Mid-Autumn Festival – 15th day<br />
of the eighth lunar month<br />
Other official holidays include:<br />
• 1 January – Founding Day<br />
• 28 February – Peace Memorial<br />
Day<br />
• 4 April – Children’s Day<br />
• 5 April – Tomb Sweeping Day<br />
• 10 October – National Day<br />
M<strong>and</strong>arin Chinese is the official business<br />
language of <strong>Taiwan</strong>. However, Chinese<br />
Traditional script is used rather than<br />
Chinese Simplified script – the latter only<br />
being used in mainl<strong>and</strong> China. English is<br />
widely spoken.<br />
While high-level business meetings may be<br />
conducted mainly in English, your hosts<br />
will appreciate it if you use their language<br />
whenever possible. When speaking in<br />
English, remember to speak slowly <strong>and</strong> to<br />
repeat key points. In order to save face,<br />
your <strong>Taiwan</strong>ese hosts will not necessarily<br />
say that they don’t underst<strong>and</strong> something.<br />
Interpreters may be required for business<br />
meetings, particularly outside Taipei<br />
<strong>and</strong> other major cities. All important<br />
negotiations should be carried out with an<br />
interpreter present so as to avoid doubt.<br />
It is also advisable to have all written<br />
documents translated into M<strong>and</strong>arin<br />
Chinese. UKTI can help you find a<br />
translator or interpreter.<br />
36
Getting Started<br />
marketing<br />
To reflect the fast-paced nature of the<br />
<strong>Taiwan</strong>ese marketplace, <strong>and</strong> its highly<br />
sophisticated media, your marketing<br />
strategy will need to be reassessed,<br />
polished <strong>and</strong> refined on a continual basis.<br />
Sales literature<br />
Trade shows <strong>and</strong> exhibitions are a good<br />
way of meeting potential new customers,<br />
but you still need to persuade them to<br />
buy your product. Sales literature is more<br />
effective if it’s in M<strong>and</strong>arin Chinese as well<br />
as English <strong>and</strong> you need to decide what<br />
kind of advertising is appropriate.<br />
Product <strong>and</strong> service adaptations<br />
You may need to adapt your product or<br />
service to meet the needs of the <strong>Taiwan</strong>ese<br />
market. Marketing research can help you to<br />
identify any adaptations you need to make.<br />
Br<strong>and</strong>ing<br />
There are no particular considerations<br />
concerning br<strong>and</strong>ing in <strong>Taiwan</strong>. You will<br />
need to check with the MOEA to see if<br />
the br<strong>and</strong> name or logo can be registered<br />
in <strong>Taiwan</strong>. Then, consult with experts in<br />
br<strong>and</strong>ing or advertising agencies who will<br />
be able to advise on the public perception<br />
of certain words or images.<br />
Sales promotion<br />
Companies that appoint local partners can<br />
usually be guided by them with regards to<br />
the type of advertising <strong>and</strong> sales promotion<br />
38
that would suit the launch of their<br />
product/s. UKTI in <strong>Taiwan</strong> can advise on<br />
the most appropriate venues to announce<br />
the launch or presence of UK goods <strong>and</strong><br />
services in the country.<br />
The media<br />
<strong>Taiwan</strong>’s media is one of the freest in Asia.<br />
Laws which prohibit the promotion of<br />
independence from China or communism<br />
are not generally enforced. Consequently,<br />
there are hundreds of privately owned<br />
newspapers expressing different views, as<br />
well as multi-channel cable <strong>and</strong> terrestrial<br />
TV <strong>and</strong> more than 170 radio stations.<br />
According to Internet World Stats, there<br />
were more than 15 million internet users<br />
in <strong>Taiwan</strong> in June 2009 <strong>and</strong> there are<br />
plans to integrate telecoms, the internet<br />
<strong>and</strong> broadcasting by 2014. You may wish<br />
to work with local marketing specialists<br />
who will underst<strong>and</strong> the most appropriate<br />
channels for reaching your target market.<br />
UKTI in <strong>Taiwan</strong> can provide contact details.<br />
more than 170 radio stations, including<br />
the Broadcasting Corporation of China,<br />
CBS Radio <strong>Taiwan</strong> International <strong>and</strong> the<br />
English-language station International<br />
Community Radio Taipei (ICRT).<br />
Newspapers<br />
Major daily newspapers include: United<br />
Daily News, China Times, Liberty Times,<br />
China Post, Taipei Times <strong>and</strong> <strong>Taiwan</strong> News.<br />
News agency<br />
Focus <strong>Taiwan</strong> is the English-language service<br />
of the state-run Central News Agency.<br />
Day-to-day communications<br />
As with the UK, business people in <strong>Taiwan</strong><br />
communicate mainly via the telephone,<br />
mobile phone <strong>and</strong> emails. If you haven’t<br />
met with your contacts face-to-face, it is<br />
advisable to write a letter or send an email<br />
to introduce yourself.<br />
TV <strong>and</strong> radio<br />
The main commercial TV channels in<br />
<strong>Taiwan</strong> are China Television Company<br />
(CTV), Chinese Television System (CTS),<br />
<strong>Taiwan</strong> Television Enterprise (TTV) <strong>and</strong><br />
Formosa Television (FTV). Cable TV news<br />
channels such as TVBS, CTiTV <strong>and</strong> ETTV<br />
are also influential. In addition, there<br />
is the Public Television Service (PTS), a<br />
non-profit public broadcaster. There are<br />
39
Getting Started<br />
INTERPRETERS<br />
While English is widely spoken in<br />
international businesses in <strong>Taiwan</strong>, you<br />
will generally need to employ interpreters<br />
during formal meetings <strong>and</strong> negotiations<br />
to prevent any misunderst<strong>and</strong>ings.<br />
There are two forms of interpreting.<br />
Consecutive interpreting means you speak<br />
<strong>and</strong> then your interpreter speaks: this is the<br />
usual form for meetings, discussions <strong>and</strong><br />
negotiations. Simultaneous interpreting<br />
involves the immediate translation of your<br />
words as you speak them. This requires<br />
special equipment <strong>and</strong> can be expensive. It<br />
is generally used only for large seminars <strong>and</strong><br />
conferences. Interpreting is a skill requiring<br />
professional training. Just because someone<br />
is fluent in English <strong>and</strong> M<strong>and</strong>arin Chinese,<br />
it does not necessarily mean that they will<br />
make a good interpreter.<br />
If you are giving a speech or presentation,<br />
remember that the need to interpret<br />
everything will cut your speaking time<br />
approximately in half (unless using<br />
simultaneous interpreting). It is essential<br />
to ensure that the interpreter can cope<br />
with any technical or specialist terms in the<br />
presentation. If you are giving a speech,<br />
give the interpreter the text well in advance<br />
<strong>and</strong> forewarn them of any changes.<br />
40
To get the best out of your interpreter:<br />
• Hire a well-briefed professional<br />
interpreter. Though this is likely to be<br />
expensive, it will be money well spent.<br />
• Have your own interpreter available, even<br />
if your <strong>Taiwan</strong>ese counterparts have one<br />
for their side. With your own interpreter,<br />
you should also be able to get some<br />
post-meeting feedback concerning the<br />
nuances of what was said (<strong>and</strong> – just as<br />
importantly – not said).<br />
• Try to involve your interpreter at every<br />
stage of your pre-meeting arrangements.<br />
The quality of interpretation will improve<br />
greatly if you provide adequate briefing<br />
on the subject matter. Ensure your<br />
interpreter underst<strong>and</strong>s what you are<br />
trying to achieve.<br />
• Avoid jargon, unless you know your<br />
interpreter is familiar with the terminology.<br />
• Listen to how your interpreter interprets<br />
what you have just said. If you have given<br />
a lengthy explanation but the interpreter<br />
translates it into only a few words, it may<br />
be that they have not fully understood.<br />
Or they may be wary of passing on a<br />
message that is too blunt <strong>and</strong> will not be<br />
well received by the audience.<br />
• Make sure that your message is getting<br />
through clearly <strong>and</strong> in a tone that will not<br />
cause resentment.<br />
A list of translators <strong>and</strong> interpreters is<br />
available on request from UKTI in <strong>Taiwan</strong>.<br />
• Speak clearly <strong>and</strong> evenly with regular<br />
breaks for interpretation. Don’t ramble on<br />
for several paragraphs without pause. Your<br />
interpreter will find it hard to remember<br />
everything you have said, let alone<br />
interpret all your points. Conversely, don’t<br />
speak in short phrases <strong>and</strong> unfinished<br />
sentences. Your interpreter may find it<br />
impossible to translate the meaning if you<br />
have left a sentence hanging.<br />
41
<strong>Business</strong> Issues <strong>and</strong> Considerations<br />
The <strong>Taiwan</strong>ese market is a favourite among<br />
foreign direct investors. However, while the<br />
country’s thriving economy, liberalising<br />
marketplace <strong>and</strong> widespread use of English<br />
in business makes it an appealing choice<br />
for UK investors, there are some significant<br />
cultural differences <strong>and</strong> challenges to be<br />
aware of.<br />
Confucian values<br />
<strong>Taiwan</strong>ese society operates according to<br />
Confucian values. These state that people<br />
should respect authority <strong>and</strong> the collective,<br />
behave virtuously, work <strong>and</strong> learn hard,<br />
avoid extremes <strong>and</strong> live moderately. <strong>Taiwan</strong><br />
is a collectivist society. People treat others<br />
with respect regardless of their personal<br />
feelings <strong>and</strong> do not do anything to cause<br />
someone else personal embarrassment. You<br />
will find that, if you can demonstrate these<br />
qualities, you will be more successful in<br />
your business relationships.<br />
Face<br />
There is also the concept of “face”<br />
(mien-tzu), which is found across Asia.<br />
<strong>Taiwan</strong>ese people strive for harmony in<br />
their business <strong>and</strong> personal relationships.<br />
To prevent loss of face, they will avoid<br />
confrontation or will tell others what they<br />
want to hear rather than tackling issues<br />
head on. For example, rather than say<br />
“no”, they might say “I’ll try.” This allows<br />
both the person making the request <strong>and</strong><br />
the person turning it down to save face<br />
<strong>and</strong> maintain harmony in the relationship.<br />
Some Westerners can find this approach<br />
confusing. Try rephrasing the question in<br />
different ways so you can compare the<br />
answers you get. If you do cause someone<br />
to lose face, for example, by embarrassing<br />
them, you can restore their dignity by<br />
saying something like “Perhaps I didn’t<br />
explain myself clearly” or “I have done the<br />
same thing myself.”<br />
42
<strong>Business</strong> Issues <strong>and</strong> Considerations<br />
<strong>Business</strong> etiquette<br />
Guanxi (‘connections’)<br />
As in mainl<strong>and</strong> China, <strong>Taiwan</strong>ese business<br />
relationships rely on guanxi (pronounced<br />
gwan shee), which essentially means social<br />
or business connections based on mutual<br />
interest or benefit. Guanxi opens doors<br />
<strong>and</strong> smooths the business process. It is<br />
therefore essential to spend time getting to<br />
know your business contacts <strong>and</strong> building<br />
a strong relationship with them through<br />
regular <strong>and</strong> ongoing contact.<br />
You will find being introduced to a company<br />
by a trusted third party, such as the British<br />
Embassy, more effective than going in cold<br />
– UKTI in <strong>Taiwan</strong> can help you here. If you<br />
make a mistake in business, always own up<br />
to it <strong>and</strong> demonstrate what you are doing to<br />
put it right.<br />
Meetings<br />
Meetings in <strong>Taiwan</strong> are generally loosely<br />
structured <strong>and</strong> may not stick to the<br />
planned agenda. They are as much about<br />
building relationships as they are about<br />
discussing business, so be prepared to<br />
spend time on non-business topics.<br />
Meetings may extend well beyond the<br />
agreed time as <strong>Taiwan</strong>ese business<br />
people regard concluding the meeting<br />
satisfactorily as more important than<br />
sticking to a particular timescale. It<br />
is worth remembering this if you are<br />
scheduling several meetings in one day.<br />
Your approach should be formal but<br />
friendly, although avoid making jokes as<br />
this could be interpreted as a lack of respect<br />
for your host. The hierarchical structure of<br />
<strong>Taiwan</strong>ese companies means it is important<br />
to show respect for authority. Ideally, the<br />
most senior person in the team should enter<br />
the room first <strong>and</strong> greet the most senior<br />
<strong>Taiwan</strong>ese representative. Always greet older<br />
or more senior people first. Make sure that<br />
you show due respect <strong>and</strong> use people’s<br />
titles correctly. Address people by their title<br />
<strong>and</strong> surname, unless you are invited to use<br />
their first name. If a person does not have<br />
a corporate or government title, use the<br />
honorific Mr, Miss or Madame, followed by<br />
their surname. Leaders should sit opposite<br />
one another around the table.<br />
H<strong>and</strong>shakes<br />
A h<strong>and</strong>shake is the most common form of<br />
greeting when doing business in <strong>Taiwan</strong>.<br />
H<strong>and</strong>shakes are softer than in some other<br />
countries <strong>and</strong> your <strong>Taiwan</strong>ese host may<br />
lower his eyes as a sign of respect. Men<br />
should wait for women to extend their<br />
h<strong>and</strong> first. Never use your index finger to<br />
point at somebody.<br />
Body language<br />
You should offer <strong>and</strong> receive documents<br />
with your right h<strong>and</strong>, <strong>and</strong> food with both<br />
h<strong>and</strong>s. Avoid showing the soles of your feet<br />
or pointing your foot at your host when<br />
crossing your legs as this is considered rude.<br />
43
<strong>Business</strong> Issues <strong>and</strong> Considerations<br />
<strong>Business</strong> etiquette (CONTINUED)<br />
Attire<br />
<strong>Taiwan</strong>ese people tend to dress smartly in<br />
business. Suits are recommended, or at least<br />
a jacket <strong>and</strong> tie. Tight skirts, low necklines<br />
<strong>and</strong> sleeveless tops should be avoided.<br />
Hierarchy<br />
Hierarchy is an important concept in<br />
<strong>Taiwan</strong>. Please refer to pg 43 for details of<br />
how you should conduct business meetings<br />
with due regard for peoples’ experience<br />
<strong>and</strong> seniority.<br />
Names <strong>and</strong> titles<br />
When addressing someone in business you<br />
should use their professional titles (professor,<br />
doctor, engineer) <strong>and</strong> honorific titles.<br />
Women in business<br />
Women are an important part of the<br />
<strong>Taiwan</strong>ese business environment <strong>and</strong> there<br />
are no special considerations, other than<br />
that regarding h<strong>and</strong>shakes. <strong>Business</strong>women<br />
in <strong>Taiwan</strong> conform to the same types of<br />
formalities as men.<br />
Punctuality<br />
When engaged in a business relationship in<br />
<strong>Taiwan</strong>, you should ensure that delivery times<br />
are clear <strong>and</strong> that you act quickly to remedy<br />
any problems. You can confirm meeting times<br />
via email or phone, one day beforeh<strong>and</strong>.<br />
<strong>Business</strong> cards<br />
<strong>Business</strong> cards are exchanged, using both<br />
h<strong>and</strong>s, after the initial introductions have<br />
been made. You should have one side of<br />
your card translated into M<strong>and</strong>arin Chinese<br />
<strong>and</strong> present it to your host with the<br />
translated side uppermost. Be sure to treat<br />
someone’s business card with respect. You<br />
should examine it before putting it away<br />
<strong>and</strong> never write on someone’s card in their<br />
presence. One good tip is to ask a question<br />
based on the information on the card.<br />
Communication style<br />
The <strong>Taiwan</strong>ese style of communicating<br />
is indirect. They will take great care to<br />
avoid causing offence <strong>and</strong>, if they disagree<br />
with something, they will simply remain<br />
silent. You need to listen patiently to what<br />
is being said (<strong>and</strong> not said) <strong>and</strong> avoid<br />
becoming visibly frustrated or irritated.<br />
Allow plenty of time for negotiations <strong>and</strong><br />
remain dignified throughout. Whereas in<br />
the UK brevity is valued, in <strong>Taiwan</strong> it may<br />
be interpreted as rudeness.<br />
Gift-giving<br />
Giving small gifts to business<br />
acquaintances is common in <strong>Taiwan</strong>. When<br />
visiting the country, it may be useful to<br />
bring a number of souvenir items, such as<br />
English bone china, company pens or silk<br />
ties to give away on suitable occasions.<br />
High-quality Scotch whisky would normally<br />
make a welcome gift for valued contacts.<br />
44
It is important that all gifts are carefully<br />
wrapped in quality paper - red, pink <strong>and</strong><br />
yellow are considered auspicious colours,<br />
but white, blue or black should be avoided.<br />
There are certain cultural considerations<br />
to bear in mind. Do not give odd numbers<br />
of gifts, or four of anything, as four is<br />
considered unlucky. Also, try to avoid<br />
giving a clock or umbrella as a gift because<br />
they are associated with bad luck.<br />
The gift is likely to be refused at first as<br />
a gesture of politeness. Attempt to give<br />
the gift again, but do not force the issue.<br />
You should give <strong>and</strong> receive a gift with<br />
both h<strong>and</strong>s <strong>and</strong> it is customary to leave<br />
it unopened when you are with the giver.<br />
Gifts should always be reciprocated at<br />
the same level – if not immediately then<br />
shortly afterwards.<br />
Dining<br />
<strong>Taiwan</strong>ese people prefer to entertain in<br />
public places rather than in their home.<br />
If you are invited into your host’s home,<br />
therefore, you should consider it a great<br />
honour <strong>and</strong> behave appropriately.<br />
45
<strong>Business</strong> Issues <strong>and</strong> Considerations<br />
Intellectual property rights (IPR)<br />
After its accession to the World Trade<br />
Organisation in 2002, <strong>Taiwan</strong> set about<br />
bringing its intellectual property laws<br />
up to the st<strong>and</strong>ard of the Agreement on<br />
Trade-Related Intellectual Property Rights<br />
(TRIP). The administration of patent,<br />
trademark <strong>and</strong> copyright laws falls under<br />
the authority of the <strong>Taiwan</strong> Intellectual<br />
Property Office (TIPO), part of the MOEA.<br />
For detailed information, contact TIPO or<br />
UKTI in <strong>Taiwan</strong>.<br />
<strong>Taiwan</strong> Intellectual Property Office<br />
3F, 185 Hsinhai Road, Sec.2<br />
Taipei 10637<br />
<strong>Taiwan</strong>.<br />
Tel: +886 (2) 2738-0007<br />
www.tipo.gov.tw<br />
47
<strong>Business</strong> Issues <strong>and</strong> Considerations<br />
Procurement<br />
Details of procurement opportunities for<br />
the central government in <strong>Taiwan</strong> are<br />
available via the country’s e-government<br />
procurement system:<br />
http://web.pcc.gov.tw/tps/pss/tender.<br />
do?method=goNews<br />
Local governments have different<br />
procurement systems. Contact UKTI <strong>Taiwan</strong><br />
for further information.<br />
48
<strong>Business</strong> Issues <strong>and</strong> Considerations<br />
Regulations, Incentives <strong>and</strong> Tax<br />
The <strong>Taiwan</strong>ese government is committed<br />
to attracting foreign direct investment<br />
<strong>and</strong> the market is continuing to liberalise.<br />
Fewer than 1 per cent of manufacturing<br />
companies <strong>and</strong> 5 per cent of service<br />
industries remain closed to overseas<br />
investors. In particular, the Global Net<br />
Project will enable UK companies to<br />
take advantage of greater cross-strait<br />
co‐operation between <strong>Taiwan</strong> <strong>and</strong> China.<br />
Foreign investors must obtain foreign<br />
investment approval (FIA) from the<br />
Investment Commission of the MOEA. This<br />
entails submitting an investment plan <strong>and</strong><br />
relevant documentation. Approval may be<br />
granted subject to certain conditions <strong>and</strong><br />
restrictions. Once a company qualifies for<br />
FIA status, it will be entitled to certain<br />
benefits <strong>and</strong> incentives, such as permission<br />
to repatriate equity <strong>and</strong> loan investments,<br />
profits, interest <strong>and</strong> capital gains.<br />
Details of regulations, incentives <strong>and</strong><br />
tax related to overseas investment are<br />
available on the Invest <strong>Taiwan</strong> website.<br />
http://investtaiwan.nat.gov.tw/matter/<br />
show_eng.jsp?ID=8&MID=3<br />
Investment incentives<br />
The <strong>Taiwan</strong>ese government offers various<br />
incentives to make the market more<br />
attractive to foreign investors, generally<br />
in the form of tax breaks. The Statute<br />
for Upgrading Industries (SUI), which<br />
administered these incentives, expired at<br />
the end of 2009. It will be replaced by a<br />
new Statute for Industrial Innovation. This<br />
will provide reduced tax rates for eligible<br />
companies, along with tax incentives<br />
for R&D, skills development, operating<br />
headquarters <strong>and</strong> international logistics<br />
<strong>and</strong> distribution centres in <strong>Taiwan</strong>.<br />
There are also incentives available under<br />
the Statute for Investment by Foreign<br />
Nationals/Overseas Chinese, the <strong>Business</strong><br />
Mergers <strong>and</strong> Acquisitions Act, the Financial<br />
Institutions Merger Act <strong>and</strong> other laws. For<br />
more information talk to UKTI in <strong>Taiwan</strong>.<br />
Tax<br />
<strong>Taiwan</strong> aspires to a simple low-tax system.<br />
In June 2008, the <strong>Taiwan</strong>ese government<br />
formed a Tax Reform Committee which<br />
made various recommendations relating to<br />
tax reforms. Among the key changes was a<br />
reduction in the rate of corporate income<br />
tax from 25 per cent to 20 per cent,<br />
effective from 1 January 2010. The aim<br />
was to combat any negative effects from<br />
the expiry of the SUI <strong>and</strong> to make <strong>Taiwan</strong> a<br />
more attractive environment for investors.<br />
49
<strong>Business</strong> Issues <strong>and</strong> Considerations<br />
Regulations, Incentives <strong>and</strong> Tax<br />
(Continued)<br />
The Tax Reform Committee ceased<br />
operations at the end of 2009, but the<br />
<strong>Taiwan</strong>ese government has pledged further<br />
reforms. A monthly publication from<br />
PricewaterhouseCoopers called <strong>Taiwan</strong> Tax<br />
Updates provides an up-to-date picture of<br />
<strong>Taiwan</strong>’s changing tax environment.<br />
Exchange controls<br />
All foreign-exchange transactions are<br />
administered by the Central Bank of<br />
the Republic of China (<strong>Taiwan</strong>). This<br />
imposes a limit of US$50 million per year<br />
for business entities <strong>and</strong> US$5 million<br />
per year for resident individuals on any<br />
foreign‐exchange transfer, inward or<br />
outward, other than trading or service<br />
revenue. Certain exchange transactions<br />
must be reported to the Central Bank.<br />
Customs <strong>and</strong> regulations<br />
Value Added Tax (VAT)<br />
Value Added Tax is known as <strong>Business</strong> Tax<br />
in <strong>Taiwan</strong>. The receiver of imported goods<br />
is responsible for paying the tax, which<br />
is 5 per cent calculated against the total<br />
amount of duty-paying value, customs<br />
duty <strong>and</strong> harbour construction dues. If the<br />
goods are subject to commodity tax, the<br />
formula to calculate business tax will also<br />
include the cost of the commodity tax.<br />
Sales tax<br />
Foreign companies that do not have any<br />
offices in <strong>Taiwan</strong> pay 20 per cent sales<br />
tax (i.e. 20 per cent of the total invoice<br />
price). If a UK company can provide a GUI<br />
(Government Unified Invoice) then it pays<br />
only 25 per cent tax of the net profit they<br />
make on the local contract. Branch offices,<br />
representative offices <strong>and</strong> <strong>Taiwan</strong>ese agents<br />
can issue GUIs.<br />
Export documentation<br />
It is essential to provide the correct<br />
documentation when exporting to <strong>Taiwan</strong>.<br />
UKTI in <strong>Taiwan</strong> can provide guidance <strong>and</strong><br />
information.<br />
Import controls<br />
<strong>Taiwan</strong> publishes a List of Commodities<br />
Subject to Import Restrictions, which sets<br />
out the goods for which an import licence is<br />
required. UKTI in <strong>Taiwan</strong> can provide details.<br />
50
Labelling <strong>and</strong> packaging regulations<br />
<strong>Taiwan</strong>ese Commodity Labelling Law<br />
sets out the general requirements for the<br />
labelling of any merch<strong>and</strong>ise that is not<br />
covered by specific regulations. It requires<br />
that labels in Chinese are affixed to the<br />
commodity itself, to the inner <strong>and</strong> outer<br />
packing, or on the instruction sheet,<br />
showing information such as the name<br />
of the commodity, composition, weight,<br />
volume, quantity, specification, usage,<br />
place of origin <strong>and</strong> date of manufacture.<br />
The usage, effective date, method of<br />
application <strong>and</strong> preservation <strong>and</strong> other<br />
necessary information must also appear<br />
if the commodity is considered dangerous;<br />
has a limited time effectiveness; is related<br />
to public health <strong>and</strong> safety; has a special<br />
property; or has to be h<strong>and</strong>led in a<br />
special way.<br />
51
Getting your goods to <strong>Taiwan</strong><br />
By sea: <strong>Taiwan</strong> has four major international<br />
ports - Kaohsiung (the largest), Taichung,<br />
Keelung <strong>and</strong> Taipei (due for completion in<br />
2011). The Port of Kaohsiung, in southern<br />
<strong>Taiwan</strong>, has a sailing time to five of the<br />
largest Asia-Pacific ports (Hong Kong,<br />
Manila, Shanghai, Tokyo <strong>and</strong> Singapore) of<br />
just over two days, making it an important<br />
hub for the region.<br />
By air: <strong>Taiwan</strong> has two international<br />
airports - Taoyuan (also known as Chiang<br />
Kai-Shek) in the north <strong>and</strong> Kaohsiung in the<br />
south. Taichung Ching Chuang Kang Airport<br />
operates mostly domestic flights <strong>and</strong> flights<br />
to outlying isl<strong>and</strong>s. Taipei Songshan Airport<br />
is a mid-size commercial airport <strong>and</strong><br />
military airbase.<br />
Freight forwarding: Sea <strong>and</strong> air-freight<br />
services to <strong>Taiwan</strong> are provided by a<br />
range of companies, including Sea Wing<br />
(www.seawing.co.uk/info<strong>Taiwan</strong>.asp) <strong>and</strong><br />
Dynamic International (www.dynamicfreight-shipping.co.uk/worldwide/asia/<br />
taiwan/shipping-freight-taiwan.html).<br />
Freight-forwarding companies like these<br />
can provide advice on the best way to<br />
transport goods to <strong>Taiwan</strong> from the UK. It<br />
takes approximately three to four weeks to<br />
do this by sea, but this will depend upon the<br />
level of service the company provides, <strong>and</strong><br />
the time it takes for custom clearance.<br />
Courier: There are many companies<br />
providing courier services to <strong>Taiwan</strong>,<br />
including DHL <strong>and</strong> FedEx. UKTI in <strong>Taiwan</strong><br />
can provide more information.<br />
Postal parcel/express mail service:<br />
The Chunghwa Post Co. Ltd is <strong>Taiwan</strong>’s<br />
official postal service. It has 23 large<br />
offices throughout the country, along with<br />
1,300 post offices. The service delivers<br />
st<strong>and</strong>ard letters, registered mail, parcels<br />
<strong>and</strong> express mail across <strong>Taiwan</strong>.<br />
www.post.gov.tw/post<br />
52
<strong>Business</strong> Issues <strong>and</strong> Considerations<br />
Getting Paid <strong>and</strong> Financial Issues<br />
Incoterms<br />
Exporters will find Incoterms 2000 a useful<br />
guide for specifying their obligations for<br />
delivering goods safely in international<br />
contracts. Incoterms provide guidance on<br />
the commonly used terms in international<br />
trade. It is a must read for a company’s<br />
marketing <strong>and</strong> sales team.<br />
Terms of payment<br />
UK exporters are advised to insist on a<br />
confirmed, irrevocable Letter of Credit. If<br />
commercial factors dictate the need for<br />
more favourable terms, it is recommended<br />
that you consider these only after a period<br />
of successful relations, having established<br />
mutual confidence.<br />
Letters of Credit are normally opened four<br />
to six weeks prior to the shipment date.<br />
The expiry date of the Letter of Credit<br />
will be geared very much to the promised<br />
delivery date. It is important, therefore,<br />
that delivery promises are fulfilled or the<br />
Letter of Credit will expire.<br />
Banking<br />
Opening hours<br />
Banks in <strong>Taiwan</strong> are open between<br />
09.00 to 15.30, Monday to Friday.<br />
Major local banks include:<br />
Bank of <strong>Taiwan</strong><br />
First Commercial Bank<br />
Chang Hwa Commercial Bank<br />
Hua Nan Commercial Bank<br />
Mega International Commercial Bank<br />
Fubon Bank<br />
Taishin Bank<br />
Chinatrust Bank<br />
UK banks include:<br />
HSBC<br />
St<strong>and</strong>ard Chartered Bank<br />
Other major foreign banks include:<br />
ANZ<br />
Bangkok Bank<br />
BNP Paribas<br />
Bank of America<br />
The Bank of East Asia<br />
The Bank of New York<br />
The Bank of Tokyo-Mitsubishi UFJ<br />
Crédit Agricole Credit Suisse AG<br />
Citibank<br />
DBS Bank<br />
Deutsche Bank<br />
Mizuho Corporate Bank<br />
St<strong>and</strong>ard Bank of South Africa<br />
State Street Bank <strong>and</strong> Trust Company<br />
Sumitomo Mitsui Banking Corporation<br />
UBS<br />
All commercial banks are authorised foreign<br />
exchange dealers. Licensed money changers<br />
are also found in urban centres, ports,<br />
airports <strong>and</strong> major shopping complexes.<br />
53
<strong>Business</strong> Issues <strong>and</strong> Considerations<br />
Getting Paid <strong>and</strong> Financial Issues<br />
(Continued)<br />
Currency information<br />
The currency of <strong>Taiwan</strong> is the new <strong>Taiwan</strong><br />
dollar, commonly referred to as the yuán,<br />
which can be written in either of two<br />
forms: an informal 元 or a formal 圓 , (used<br />
interchangeably). Notes come in NT$2,000,<br />
NT$1,000, NT$500, NT$200 <strong>and</strong> NT$100<br />
denominations. Coins come in NT$50, NT$20,<br />
NT$10, NT$5 <strong>and</strong> NT$1 denominations.<br />
There are no limits on the amount of<br />
foreign currency (notes <strong>and</strong>/or traveller’s<br />
cheques) visitors may import.<br />
Visitors may take up to NT$40,000 into<br />
<strong>Taiwan</strong>, but will need a permit from the<br />
Ministry of Finance for the import of<br />
anything higher than NT$8,000, as well<br />
as a permit to export anything more than<br />
NT$40,000.<br />
54
<strong>Business</strong> Issues <strong>and</strong> Considerations<br />
Insurance<br />
The private sector in the UK provides<br />
credit insurance for exports of consumer<br />
products, raw materials <strong>and</strong> other similar<br />
goods. Speak to your banker or insurance<br />
broker for more information, or contact the<br />
British Insurance Brokers’ Association for<br />
impartial advice.<br />
British Insurance Brokers’ Association<br />
Tel: +44 (0)870 950 1790 (consumer<br />
helpline)<br />
Email: enquiries@biba.org.uk<br />
www.biba.org.uk<br />
Private-sector insurance has some<br />
limitations, particularly for sales of capital<br />
goods, major services <strong>and</strong> construction<br />
projects that require longer credit packages<br />
or that are in riskier markets. The Export<br />
Credits Guarantee Department (ECGD),<br />
a separate UK Government department<br />
that reports to the Secretary of State for<br />
<strong>Business</strong>, Innovation & Skills, provides a<br />
range of products for exporters of such<br />
goods <strong>and</strong> services.<br />
Export Credits Guarantee Department<br />
Tel: +44 (0)20 7512 7000<br />
Email: help@ecgd.gsi.gov.uk<br />
www.ecgd.gov.uk<br />
55
<strong>Business</strong> Issues <strong>and</strong> Considerations<br />
<strong>Management</strong>, Control<br />
<strong>and</strong> quality insurance<br />
UK companies use a variety of quality<br />
assurance <strong>and</strong> management-control<br />
techniques in <strong>Taiwan</strong>. These include<br />
extensive travelling by UK personnel, a<br />
controlling or liaison presence in <strong>Taiwan</strong><br />
<strong>and</strong> providing extensive training <strong>and</strong><br />
management for <strong>Taiwan</strong>ese staff. It is<br />
important not to allow milestones to slip<br />
by, whether these are attending a board<br />
meeting in a joint venture, or arranging<br />
a quality audit at a supplier.<br />
Particular attention to detail should be<br />
paid when sourcing products from <strong>Taiwan</strong>.<br />
Specifications can be easily misunderstood,<br />
so they need to be very clearly explained<br />
<strong>and</strong> agreed, <strong>and</strong> a quality-management<br />
system put in place with the <strong>Taiwan</strong>ese<br />
company. Consultancies can undertake all<br />
or part of this process on your behalf.<br />
56
<strong>Business</strong> Issues <strong>and</strong> Considerations<br />
Bribery <strong>and</strong> corruption<br />
Corruption remains an issue in <strong>Taiwan</strong>. The<br />
news, in June 2010, that three High Court<br />
judges <strong>and</strong> a prosecutor had been detained<br />
on suspicion of fixing the outcome of highprofile<br />
cases made world headlines. <strong>Taiwan</strong>’s<br />
ranking on the Transparency International<br />
Corruption Perception Index is 33 (score<br />
5.8), but this is an improving picture.<br />
Our advice to companies encountering<br />
corruption in <strong>Taiwan</strong> is simple – don’t<br />
get involved. Not only are there<br />
issues of business integrity to bear in<br />
mind, but it is also, of course, illegal.<br />
Invariably, corruption is related to lack of<br />
professionalism <strong>and</strong> control, all of which<br />
are damaging to long-term business.<br />
57
<strong>Business</strong> Issues <strong>and</strong> Considerations<br />
Getting to <strong>Taiwan</strong><br />
By air<br />
<strong>Taiwan</strong> has two international airports,<br />
Taoyuan (also known as Chiang Kai-Shek)<br />
Airport in the north, <strong>and</strong> Kaohsiung Airport<br />
in the south. In March 2010, China Airlines<br />
began offering direct non-stop flights from<br />
London Heathrow to <strong>Taiwan</strong> three times a<br />
week. Eva Air flies seven times per week via<br />
Bangkok. Other carriers (e.g. Virgin, Cathay<br />
Pacific <strong>and</strong> British Airways) require transit<br />
in Hong Kong.<br />
Getting to <strong>and</strong> from the airport<br />
Travelling from Taoyuan Airport to Taipei<br />
city centre takes 60-75 minutes <strong>and</strong><br />
costs NT$1,200-$1,500. The basic taxi<br />
fare is NT$70. Few taxi drivers speak or<br />
read English, so it advisable to carry cards<br />
with your destination address written in<br />
M<strong>and</strong>arin. A hotel car can be booked with<br />
the hotel reservation, costing on average<br />
NT$1,500-$1,800. Tipping is optional <strong>and</strong><br />
at one’s personal discretion. There are no<br />
hard-<strong>and</strong>-fast guidelines.<br />
Travelling within <strong>Taiwan</strong><br />
Rail<br />
<strong>Taiwan</strong> has a good rail system. The tourist<br />
information hotline on 7173737 can<br />
provide details of fares <strong>and</strong> schedules, as<br />
can any travel agent or the service desk of<br />
Taipei Railway Station on 23713558.<br />
Taipei Metro Rapid Transit (MRT)<br />
All Taipei MRT lines operate between<br />
06.00-24.00 <strong>and</strong> run approximately every<br />
five to eight minutes. The fare ranges from<br />
NT$20-NT$65. More lines are planned.<br />
For more information about the Taipei<br />
Rapid Transit Corporation, visit the website:<br />
http://english.trtc.com.tw<br />
Road<br />
Traffic travels on the right in <strong>Taiwan</strong>.<br />
The roads in Taipei <strong>and</strong> other big cities<br />
are generally heavily congested. Freeways<br />
link most major cities, but traffic jams<br />
are common.<br />
58
Buses<br />
Taipei has an extensive bus network,<br />
which has become more efficient with the<br />
introduction of bus lanes on the city’s<br />
major roads. Buses run from 06.00-22.30<br />
<strong>and</strong> the basic fare is NT$15. A service<br />
runs every 15 minutes from the airport<br />
to the city centre between 07.50-23.30.<br />
A complete listing of routes can be found<br />
in the Taipei Bus <strong>Guide</strong> by Damien Brown,<br />
available from Taipei bookstores.<br />
Car hire<br />
Any foreigner who wishes to drive in <strong>Taiwan</strong><br />
must have a valid driver’s licence. For shortstay<br />
visitors, an International Driver’s Permit<br />
issued outside <strong>Taiwan</strong> will suffice, but if<br />
you are planning to stay in <strong>Taiwan</strong> for more<br />
than six months, you are advised to obtain a<br />
<strong>Taiwan</strong> Driver’s Licence. Car-rental companies<br />
do exist, but self-drive is not a popular<br />
option because of the high number of traffic<br />
accidents <strong>and</strong> the difficulty in finding car<br />
parking spaces. Many visitors prefer to hire<br />
a car <strong>and</strong> driver through their hotel.<br />
Places to stay, eat <strong>and</strong> shop<br />
As well as advising on business issues, the<br />
UKTI team in Taipei can offer practical,<br />
on‐the-ground assistance with all aspects<br />
of your business trip to <strong>Taiwan</strong>, from where<br />
to stay through to good places to eat or<br />
hold product launches.<br />
Visas<br />
British nationals holding a passport with at<br />
least six months’ unexpired validity, who are<br />
visiting <strong>Taiwan</strong> for up to 90 days, do not<br />
require a visa to enter the country, provided<br />
they have a confirmed onward ticket <strong>and</strong><br />
do not have a criminal record. An extension<br />
of another 90 days can be granted to a<br />
person who enters <strong>Taiwan</strong> this way. British<br />
nationals who hold a passport of less than<br />
six months’ validity will not be permitted<br />
to enter <strong>Taiwan</strong> unless a visa has been<br />
obtained prior to departure from the UK.<br />
All enquiries about visas, work permits <strong>and</strong><br />
entry into <strong>Taiwan</strong> should be directed to<br />
the Taipei Representative Office in the UK.<br />
You should allow two days to obtain a visa,<br />
although a same-day service is available.<br />
Taipei Representative Office<br />
50 Grosvenor Gardens<br />
London SW1W 0EB<br />
Tel: +44 (0)20 7881 2650<br />
www.roc-taiwan.org/uk<br />
Email: consulate@taiwan-tro.uk.net<br />
Opening hours: 09.30-12.30, Monday to<br />
Friday<br />
Time zone<br />
<strong>Taiwan</strong> is eight hours ahead of Greenwich<br />
Mean Time.<br />
59
<strong>Taiwan</strong>ese CULTURE<br />
In a highly competitive business<br />
environment, it is more important than<br />
ever to underst<strong>and</strong> the business culture<br />
of your target markets. Underst<strong>and</strong>ing<br />
business culture helps you to underst<strong>and</strong>,<br />
anticipate <strong>and</strong> respond to unexpected<br />
behaviour. It also ensures that you<br />
behave in an acceptable way <strong>and</strong> avoid<br />
misunderst<strong>and</strong>ings. Refer to the <strong>Business</strong><br />
Etiquette section for detailed guidance.<br />
60
<strong>Taiwan</strong>ese Culture<br />
Politics<br />
China has claimed sovereignty over <strong>Taiwan</strong><br />
since the end of the Chinese Civil War<br />
in 1949. As the Communists came to<br />
power in China, the defeated Nationalist<br />
government fled to <strong>Taiwan</strong>.<br />
Tensions have remained between <strong>Taiwan</strong><br />
<strong>and</strong> mainl<strong>and</strong> China ever since. China was<br />
angered by the former President of <strong>Taiwan</strong>,<br />
Chen Siu-bian’s moves towards formal<br />
independence. However, in March 2008,<br />
President Ma Ying-jeou came to power <strong>and</strong><br />
has adopted a more conciliatory stance.<br />
For the first time in 60 years, the leaders<br />
of China <strong>and</strong> <strong>Taiwan</strong> exchanged direct<br />
messages in July 2009. A year later, the<br />
two parties signed an historic trade pact.<br />
Despite this, China continues to insist that<br />
nations cannot have official diplomatic<br />
relations with both China <strong>and</strong> <strong>Taiwan</strong>. This<br />
has led to diplomatic isolation for <strong>Taiwan</strong>.<br />
It has formal diplomatic ties with only<br />
two dozen countries, mainly Pacific, South<br />
American <strong>and</strong> African states.<br />
previously been an authoritarian one-party<br />
state. The trade agreement signed with<br />
China in 2010 is seen as a l<strong>and</strong>mark deal.<br />
President<br />
President Ma Ying-jeou was sworn in<br />
on 20 May 2008, ending eight years of<br />
Democratic Progressive Party rule. Mr Ma<br />
was the youngest-ever cabinet minister<br />
in 1988 <strong>and</strong> earned a reputation for<br />
combating corruption as justice minister<br />
from 1993-1996. He led the Nationalist<br />
Party (Kuomintang) from 2005-7. Mr<br />
Ma’s conciliatory manner has earned the<br />
respect of his supporters <strong>and</strong> opponents<br />
alike. His presidential campaign focused on<br />
improving relations with mainl<strong>and</strong> China<br />
<strong>and</strong> helping <strong>Taiwan</strong>’s financial services<br />
industry to establish itself there. The deal<br />
signed in 2010 is viewed by many as one<br />
of the President’s major successes.<br />
<strong>Taiwan</strong> has no seat at the United Nations,<br />
having lost it to China in 1971. Repeated<br />
attempts to regain representation at the<br />
UN have been blocked.<br />
However, despite its diplomatic isolation,<br />
<strong>Taiwan</strong> has become one of Asia’s biggest<br />
traders. In the early 1990s, the isl<strong>and</strong><br />
made the transition to democracy, having<br />
61
<strong>Taiwan</strong>ese Culture<br />
Current Economic Situation<br />
2010 was a record-breaking year for<br />
<strong>Taiwan</strong>’s economy. It grew by 10.8 per cent<br />
year-on-year, the strongest annual growth<br />
since 1987. Booming domestic dem<strong>and</strong><br />
has helped UK exports to <strong>Taiwan</strong> reach<br />
a record high – over £1 billion in 2010.<br />
The momentum of growth is expected to<br />
continue in 2011, with GDP forecast to rise<br />
by 4.9 per cent year-on-year. Consumer<br />
Price Index (CPI) forecasts remain at a<br />
modest 2 per cent year-on-year level,<br />
although soaring global oil prices could<br />
fuel inflationary pressures.<br />
taiwan Economic Facts 2010 (unless otherwise indicated)<br />
UK (as a<br />
<strong>Taiwan</strong><br />
comparison)<br />
*Population 23.03 million 61.8 million<br />
*GDP per capita (purchasing power parity – ppp) US$19,155 US$34,076 (2009)<br />
*Nominal GDP US$427 billion US$2.18 trillion<br />
*GDP growth (real) 10.8% (2010) -4.9% (2009)<br />
**World Bank ease of doing business ranking 33 4<br />
***Global Competitiveness Report ranking 13 (2010/11) 12 (2010/11)<br />
Source: *Economist Intelligence Unit/**World Bank/***World Economic Forum<br />
62
<strong>Taiwan</strong>ese Culture<br />
Religion<br />
<strong>Taiwan</strong>ese Culture<br />
Challenges<br />
The main religions in <strong>Taiwan</strong> are Taoism,<br />
Buddhism <strong>and</strong> Christianity. Religion is not<br />
a sensitive issue in the country <strong>and</strong> the<br />
constitution guarantees religious freedoms.<br />
Although the business climate in <strong>Taiwan</strong><br />
is improving all the time, some obstacles<br />
still remain. There are a few market-access<br />
issues faced by UK companies in the areas<br />
of pharmaceuticals, alcoholic beverages (lot<br />
coding/white spirits), public construction<br />
regulations, IPR <strong>and</strong> registering in <strong>Taiwan</strong>.<br />
The British Trade <strong>and</strong> Cultural Office in Taipei<br />
takes market-access issues seriously <strong>and</strong> is<br />
in regular discussions with senior officials<br />
in <strong>Taiwan</strong> to tackle the problem. UKTI can<br />
offer advice on overcoming these challenges<br />
<strong>and</strong> provide up-to-date information about<br />
developments in the marketplace.<br />
63
Contacts<br />
If you have a specific export enquiry<br />
about the <strong>Taiwan</strong>ese market which is not<br />
answered by the information on this report,<br />
you can contact:<br />
UK Trade & Investment Enquiry Service<br />
Tel: +44 (0)20 7215 8000<br />
Fax: +44 (0)141 228 3693<br />
Email: enquiries@ukti.gsi.gov.uk<br />
You will be signposted to the appropriate<br />
section on our website, or transferred<br />
directly to the British Trade & Cultural<br />
Office in Taipei. Or, you may contact the<br />
British Trade <strong>and</strong> Cultural Office directly.<br />
British Trade & Cultural Office<br />
26th Floor, President International Tower,<br />
9-11 Song Gao Road,<br />
Xin Yi District,<br />
Taipei 11073,<br />
<strong>Taiwan</strong><br />
Tel: +886 (2) 8758 2088<br />
Fax: +886 (2) 8758 2050<br />
http://ukintaiwan.fco.gov.uk<br />
British Chamber of Commerce in Taipei<br />
(BCCT)<br />
The BCCT champions the Britain-<strong>Taiwan</strong><br />
business interests of its members. It is an<br />
independent, non-government organisation<br />
made up of organisations affiliated with<br />
the UK <strong>and</strong> includes some of the most<br />
prominent organisations in <strong>Taiwan</strong>. The<br />
BCCT offers a range of membership<br />
activities, including presentations <strong>and</strong><br />
64<br />
networking events. It has a close working<br />
relationship with the British Trade &<br />
Cultural Office <strong>and</strong> the British Council.<br />
British Chamber of Commerce in Taipei<br />
26 Floor, President International Tower<br />
9-11 Song Gao Road<br />
Taipei 11073<br />
<strong>Taiwan</strong><br />
Tel: +886 (2) 2720 1919<br />
Fax: +886 (2) 2720 9200<br />
Email: info@bcctaipei.com<br />
www.bcctaipei.com<br />
Country information<br />
BBC website<br />
http://news.bbc.co.uk/1/hi/country_profiles<br />
FCO country profile<br />
www.fco.gov.uk/en/travel-<strong>and</strong>-living-abroad/<br />
travel-advice-by-country/country-profile<br />
Culture <strong>and</strong> communications<br />
CILT – National Centre for Languages –<br />
Regional Language Network in your area:<br />
www.cilt.org.uk/workplace/employer_<br />
support/in_your_area.aspx<br />
Kwintessential culture guides<br />
www.kwintessential.co.uk
Customs & regulations<br />
HM Revenue & Customs<br />
www.hmrc.gov.uk<br />
Economic information<br />
The Economist<br />
www.economist.com/countries<br />
Export control<br />
Export Control Organisation<br />
www.bis.gov.uk/exportcontrol<br />
Export finance <strong>and</strong> insurance<br />
Export Credits Guarantee Department<br />
www.ecgd.gov.uk<br />
Intellectual property<br />
Intellectual Property Office<br />
www.ipo.gov.uk<br />
Market access<br />
Market Access Database for Tariffs<br />
(for non-EU markets only)<br />
http://madb.europa.eu/mkaccdb2/<br />
indexPubli.htm<br />
St<strong>and</strong>ards <strong>and</strong> technical regulations<br />
British St<strong>and</strong>ards Institution (BSI)<br />
www.bsigroup.com/en/sectors<strong>and</strong>services/<br />
Disciplines/ImportExport<br />
National Physical Laboratory<br />
www.npl.co.uk<br />
Trade statistics<br />
National Statistics<br />
www.statistics.gov.uk/hub<br />
UK trade information<br />
www.ukti.gov.uk<br />
Travel advice<br />
FCO<br />
www.fco.gov.uk/en/travel-<strong>and</strong>-livingabroad<br />
NHS<br />
www.nhs.uk/nhsengl<strong>and</strong>/Healthcareabroad<br />
Travel health<br />
www.travelhealth.co.uk<br />
SOLVIT – Overcoming Trade Barriers<br />
(EU markets only)<br />
www.bis.gov.uk/EUMarketAccessUnit<br />
65
© Crown Copyright 2011<br />
You may reuse this information (not including logos, images <strong>and</strong> case studies) free of charge in any format<br />
or medium, under the terms of the Open Government Licence. To view this licence visit<br />
www.nationalarchives.gov.uk/doc/open-government-licence/ or write to the Information Policy Team,<br />
The National Archives, Kew, London TW9 4DU, or email: psi@nationalarchives.gsi.gov.uk<br />
Any enquiries regarding this publication should be sent to our Enquiry Service by email:<br />
enquiries@ukti.gsi.gov.uk or telephone: + 44 (0)20 7215 8000 (Monday – Friday 09.00-17.00)<br />
This publication is also available from our website at www.ukti.gov.uk<br />
66
HELPING YOUR BUSINESS GROW INTERNATIONALLY<br />
A range of UK Government support is available from a portfolio of initiatives called<br />
Solutions for <strong>Business</strong> (SfB). The “solutions” are available to qualifying businesses,<br />
<strong>and</strong> cover everything from investment <strong>and</strong> grants through to specialist advice,<br />
collaborations <strong>and</strong> partnerships.<br />
UK Trade & Investment is the Government Department that helps UK-based companies<br />
succeed in the global economy, <strong>and</strong> is responsible for the delivery of the SfB product<br />
“Helping Your <strong>Business</strong> Grow Internationally”.<br />
We also help overseas companies bring their high-quality investment to the UK’s dynamic<br />
economy – acknowledged as Europe’s best place from which to succeed in global business.<br />
UK Trade & Investment offers expertise <strong>and</strong> contacts through its extensive network of<br />
specialists in the UK, <strong>and</strong> in British embassies <strong>and</strong> other diplomatic offices around the world.<br />
We provide companies with the tools they require to be competitive on the world stage.<br />
For further information please visit www.ukti.gov.uk or telephone +44 (0)20 7215 8000.<br />
Whereas every effort has been made to ensure that the information given in this document is accurate, neither<br />
UK Trade & Investment nor its parent Departments (the Department for <strong>Business</strong>, Innovation <strong>and</strong> Skills, <strong>and</strong> the<br />
Foreign <strong>and</strong> Commonwealth Office) accept liability for any errors, omissions or misleading statements, <strong>and</strong> no<br />
warranty is given or responsibility accepted as to the st<strong>and</strong>ing of any individual, firm, company or other<br />
organisation mentioned.<br />
The paper in this document is made from 50 per cent recycled waste pulp with 50 per cent pulp from<br />
well-managed forests. This is a combination of Totally Chlorine Free <strong>and</strong> Elemental Chlorine Free.<br />
The inks are vegetable oil-based <strong>and</strong> contain resins from plants/trees <strong>and</strong> the laminate on the cover<br />
is sustainable, compostable <strong>and</strong> can be recycled.<br />
Published March 2011 by UK Trade & Investment<br />
© Crown Copyright<br />
URN 11/1094
PROVINCE<br />
<strong>Taiwan</strong><br />
City with UK Trade<br />
<strong>Business</strong> <strong>Guide</strong><br />
& Investment office<br />
Provincial capital city<br />
Major commercial centre<br />
PROVINCES <strong>and</strong><br />
MAJOR CITIES<br />
TAIPEI<br />
CITY<br />
KEELUNG<br />
0<br />
100 Miles<br />
Taoyuan<br />
Taipei<br />
0<br />
100 KM<br />
TAOYUAN<br />
NEW TAIPEI CITY<br />
Hsinchu<br />
Yilan<br />
Key<br />
Key<br />
MUNICIPALITIES<br />
large cities that have the<br />
same administrative status as<br />
provinces <strong>and</strong> report directly<br />
to Central Government<br />
Miaoli<br />
MIAOLI<br />
HSINCHU<br />
YILAN<br />
PROVINCE<br />
Fengyuan<br />
TAICHUNG CITY<br />
City with UK Trade<br />
& Investment office<br />
Taichung<br />
Provincial capital city<br />
Changhua<br />
Hualien<br />
Major commercial centre<br />
CHANGHUA<br />
Nantou<br />
PENGHU<br />
YUNLIN<br />
Douliu<br />
NANTOU<br />
HUALIEN<br />
0<br />
Chiayi<br />
100 CHIAYI Miles<br />
0<br />
100 KM<br />
Xinying<br />
TAINAN CITY<br />
Tainan<br />
KAOHSIUNG CITY<br />
TAITUNG<br />
Qishan<br />
Kaohsiung<br />
Pingtung<br />
Taitung<br />
GREEN ISLAND<br />
PINGTUNG<br />
For more information on <strong>Taiwan</strong> please<br />
see the relevant country pages on the<br />
Foreign <strong>and</strong> Commonwealth Office<br />
website: www.fco.gov.uk<br />
Hengchun<br />
ORCHID ISLAND