Taiwan Business Guide - Management and Business Studies Portal

Business Issues and Considerations
Regulations, Incentives and Tax
The Taiwanese government is committed
to attracting foreign direct investment
and the market is continuing to liberalise.
Fewer than 1 per cent of manufacturing
companies and 5 per cent of service
industries remain closed to overseas
investors. In particular, the Global Net
Project will enable UK companies to
take advantage of greater cross-strait
co‐operation between Taiwan and China.
Foreign investors must obtain foreign
investment approval (FIA) from the
Investment Commission of the MOEA. This
entails submitting an investment plan and
relevant documentation. Approval may be
granted subject to certain conditions and
restrictions. Once a company qualifies for
FIA status, it will be entitled to certain
benefits and incentives, such as permission
to repatriate equity and loan investments,
profits, interest and capital gains.
Details of regulations, incentives and
tax related to overseas investment are
available on the Invest Taiwan website.
http://investtaiwan.nat.gov.tw/matter/
show_eng.jsp?ID=8&MID=3
Investment incentives
The Taiwanese government offers various
incentives to make the market more
attractive to foreign investors, generally
in the form of tax breaks. The Statute
for Upgrading Industries (SUI), which
administered these incentives, expired at
the end of 2009. It will be replaced by a
new Statute for Industrial Innovation. This
will provide reduced tax rates for eligible
companies, along with tax incentives
for R&D, skills development, operating
headquarters and international logistics
and distribution centres in Taiwan.
There are also incentives available under
the Statute for Investment by Foreign
Nationals/Overseas Chinese, the Business
Mergers and Acquisitions Act, the Financial
Institutions Merger Act and other laws. For
more information talk to UKTI in Taiwan.
Tax
Taiwan aspires to a simple low-tax system.
In June 2008, the Taiwanese government
formed a Tax Reform Committee which
made various recommendations relating to
tax reforms. Among the key changes was a
reduction in the rate of corporate income
tax from 25 per cent to 20 per cent,
effective from 1 January 2010. The aim
was to combat any negative effects from
the expiry of the SUI and to make Taiwan a
more attractive environment for investors.
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