1 Taiwan External Trade Development Council Business Alliance Section Strategic Marketing Department YOUR GATEWAY TO ASIA Taiwan

1

Taiwan External Trade Development CouncilTaiwan External Trade Development Council

Business Alliance SectionBusiness Alliance SectionStrategic Marketing DepartmentStrategic Marketing Department

YOUR GATEWAY TO ASIAYOUR GATEWAY TO ASIA

TaiwanTaiwan

2

Economic Development Vision for 2015 Taiwan’s competitiveness Investment & trade figures Why invest in Taiwan Investment cost analysis

tax structure Investment incentives Commercial offices costs Human resources (Hi-tech & working labor by sector)

Procedures of setting up companies Site selections TAITRA’s business alliance services Related Contact windows Industrial investment opportunities

Outline

3

Economic Development Vision

for 2015

4

GDP growth: 5% in 2015GDP per capita:

US$15,000 in 2005 US$20,000 in 2009 US$30,000 in 2015

CPI less than 2%Unemployment rate below 4% Income gaps below six-fold

Targets to be AchievedTargets to be Achieved

Economic Development Vision For 2015

5

IndustrialDevelopment

Public

Construction

Financial Market

Industrial Manpower

SocialWelfare

Five Master PlansFive Master Plans


6

Develop & Upgrade Industries

Improve InvestmentClimate

Project Structure

Industrial DevelopmentIndustrial Development


7

11 Provide land incentivesProvide land incentives

22 Sufficient supply of manpowerSufficient supply of manpower

33 Offer financing assistence Offer financing assistence

44 Improve the EVP inspection flowImprove the EVP inspection flow

55 Build mechanism to drive FDI inwardBuild mechanism to drive FDI inward

Improve Investment ClimateImprove Investment Climate


8

WLAN& ICT, digital home, healthcare & medical devices, green industries, autotronics WLAN& ICT, digital home, healthcare & medical devices, green industries, autotronics

Strategic IndustriesStrategic Industries

Create brand, marketing value and innovation Create brand, marketing value and innovation UpgradingUpgrading

Assisting SME (small & medium size companies)Develop local industriesAssisting SME (small & medium size companies)Develop local industries

BalancingBalancing

Develop and Upgrade IndustriesDevelop and Upgrade Industries


9

Integrate the sources of incubation centers/universities/industriesIntegrate the sources of incubation centers/universities/industries

AA

Recruit international talentsRecruit international talentsBB

Train skilled and professional talents for strategic and services industries Train skilled and professional talents for strategic and services industries

CC

Industrial ManpowerIndustrial ManpowerEconomic Development Vision For 2015

10

TAIWAN’S COMPETITIVENESS

11

Taiwan’s Competitiveness

Overall

Ranking

Asian

Ranking

WEF Global Competitiveness Report2006-2007 (among 125 countries) 13th 4th

Global Competitiveness Index: Basic Requirements 21st 4th

Global Competitiveness Index: Efficiency Enhancers 14th 3rd

Global Competitiveness Index: Innovation Factors 9th 2nd

Business Competitiveness Index 21st 5th

WEF: Global Information Technology Report 2005-2006 (among 115 countries) 7th 2nd

12

ACGA Corporate Governance

Watch 2006 Ranking55th th

BERI: Investment Environment Risk Assessment Report 2006 66th th (3(3rdrd in Asia) in Asia)

IMD: 2005 World Competitiveness Ranking

1818thth(4th in Asia)(4th in Asia)

EIU: 2006 Business Environment Ranking (among 82 countries)

1919thth (3(3rdrd in Asia) in Asia)

Taiwan’s Competitiveness

http://www.imd.ch/

http://www.eiu.com/uflorida

13

Investment & Trade Figures

14

TAIWANTAIWANCapital Taipei

Location East Asia

Land 35, 980 km2

Population 22,876,527 (Dec. 2006)

Labor Force 10,616,000 (Nov. 2006)

Literacy 96.1%

臺灣

臺灣

TA

IWA

NT

AIW

AN

Basic StatisticsBasic Statistics


15

Fact BookFact Book RankingRanking

GDP US$ 370.18 Billion

(2007 forecast) 23

GDP Real Growth Rate 4.14% (2007 forecast) 18

GDP (PPP) US$ 719 Billion (2007 forecast) 16

GDP (PPP)Per Capita US$ 30,874 (2007 forecast) 20

Industrial ProductionGrowth Rate

4.1% (Est. 2005) 82

Reserves of Foreign Exchange

US$ 265.14 Billion

(Nov.2006) 3

臺灣

臺灣

TA

IWA

NT

AIW

AN



16

2007 Economic Growth Forecast2007 Economic Growth Forecast2006 Estimates 2007 Forecast

World 3.8% 3.2%

USA 3.2% 2.2%

EU 2.5% 2.2%

Japan 2.5% 1.7%

China 10.2% 8.9%

India 7.7% 7.9%

Taiwan 4.1% 4.2%

South Korea 5.0% 4.3%

Singapore 7.0% 5.5%

臺灣

臺灣

TA

IWA

NT

AIW

AN



Source: UN “World Economic Situation and Prospects 2007” annual briefing

17

Taiwan's External Trade Value 1994-2006 Taiwan's External Trade Value 1994-2006 (in Billion USD)(in Billion USD)

0

20

40

60

80

100

120

140

160

180

200

220

240

1994 1996 1998 2000 2002 2004 2006

Export

Import

Source: Bureau of Foreign Trade (BOFT), MOEA

BASIC STATISTICS

18

S. Korea5.19%Singapore

3.37%

Japan14.67%

China17.95%

U.S.A.12.90%

Hong Kong9.20%

Others27.23%

Australia1.89%

Saudi Arabia2.41%

Germany2.61%

Malaysia2.58%

Source: Bureau of Foreign Trade (BOFT), MOEA

BASIC STATISTICS

Taiwan's External Trade in 2006Taiwan's External Trade in 2006(Exports and Imports/By Country)(Exports and Imports/By Country)

19

Approved Overseas Taiwanese and Foreign InvestmentsApproved Overseas Taiwanese and Foreign Investments

1994-2006 1994-2006 (in Million USD)(in Million USD)

0

2000

4000

6000

8000

10000

12000

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Source: Investment Commission, MOEA



20

Approved Overseas Taiwanese and Foreign Approved Overseas Taiwanese and Foreign Investments in 2006 Investments in 2006 (By Industry)(By Industry)

Others3.82%

Electrical &Electronic Mfg.

44.91%

PrecisionMachinery

1.63%

Trade, Wholesale& Retail6.02%

Other Service6.84%

Chemical Mfg.1.19%

Construction0.40%

Finance &Insurance

34.88%

Transportation0.31%

Source: Investment Commission, MOEA



21

WHY INVEST IN TAIWAN

22

Industry clusters & complete supply chain

Strong R&D capabilities

An emerging capital market

Abundant resource of skilled talents

Efficient logistics operation

Gateway to China and the ASEAN markets

Sourcing and marketing through

Taiwanese

Why Invest in TaiwanWhy Invest in Taiwan

Strengths of TAIWANStrengths of TAIWAN

23

Distribution Map of Distribution Map of Industry ClustersIndustry Clusters

Automobile & Motorcycle

Automobile Parts

Faucet

Bicycle

Ceramics & China

Clothing/Fabrics

Dye Industry

Fabrics/Cloths

Fishnet

Floriculture

Foods

Glass

Hat

Hosiery

Machinery

Optoelectronics

Petrochemical

Saxophone

Screw

Semiconductor

Shipbuilding & Steel

Synthetic fiber & Yarn

Towel

Wood-carving


24

Complete supply chains of ICT productsComplete supply chains of ICT products

Provider of LCD MonitorsMarket Share: 68%Worth: $96.87 BILLION #1#1

Provider of Chip Foundry ServiceMarket Share: 69.2%Worth: $11.6 BILLION #1#1

Provider of Notebook PCsMarket Share: 78.3%Worth: $30.3 BILLION

Provider of Cable ModemsMarket Share: 73%Worth: $838 MILLION #1#1

Semiconductor PackagingMarket Share: 44.8%Worth: $5.5 BILLION

#1#1

Provider of Mask ROMsMarket Share: 91.2%Worth: $280 MILLION

Provider of Wireless LAN EquipmentsMarket Share: 88%Worth: $1.9 BILLION #1#1

Provider of ADSL ModemsMarket Share: 78%Worth: $1.1 BILLION #2#2

Provider of Analog ModemsMarket Share: 86%Worth: $227 MILLION

Source: IDB, Taiwan (2006)

#1#1

#1#1

#1#1

#1#1

Why Invest in Taiwan

25

Strong R&D CapabilitiesStrong R&D Capabilities

Research institutions & incubation centers

R&D expenditures from 2.4% of GDP in 2004 to targeted 3% of GDP in 2008

In 2005, Taiwan ranks 4th in number of patents filed and granted with the U.S.

Patent and Trademark Office (USPTO)

In 2005, Taiwan filed 3000+ patent applications to JPO and 679 applications to EPO

27 multinational companies establishing 30 R&D centers in Taiwan:

Source: Directorate-General of Budget, Accounting and Statistics, USPTO, and Intellectual Property Office


26

An Emerging Capital MarketAn Emerging Capital Market

Taiwan Stock Exchange (Dec 2006)

Listed Companies 691Market Capitalization US$572.8 Billion

Over-the-Counter ／ Venture Capital (Dec. 2006)

Listed Companies of OTC Market 534Listed Companies of OTC- Emerging Market 223Listed Venture Capital Companies 219

Source: Taiwan Stock Exchange Corp., GreTai Securities Market, Taiwan Venture Capital Association


27

An Emerging Capital MarketAn Emerging Capital Market

Banks (Dec 2006)

Domestic Banks ／ Branch Offices 43 ／ 3,276Foreign Banks ／ Branch Offices 33 ／ 65Citibank, Bank of America, Societe Generale, ABN AMRO, Deutch Bank, American Express, JP Morgan Chase, BNP, UBS, ING, MUFG, SMBC, HSBC, Bangkok Bank, etc.

Source: FSC, Executive Yuan

Major International Bank AlliancesForeign bank Domestic bank

Shinsei Bank Jih Sun Financial Holdings Co.

Standard Chartered Bank Hsinchu International Bank

AIG Taiwan Central Insurance

HSBC Far Eastern International Bank

GE Consumer Finance Cosmos Bank


28

An Abundant Resource of Skilled TalentsAn Abundant Resource of Skilled Talents

> 42,334 with Master’s Degree

> 2,165 with Ph.D. or Doctorate Degree

> 210,763 with Bachelor’s Degree

In 2005, graduates of higher education in Taiwan:

Recruiting overseas hi-tech talents to work in Taiwan

HiRecruit HiRecruitNumber of Recruits (2003-2005)

599

656 667

450

600

750

2003 2004 2005

2003

2004

2005

Source: Department of Statistics of Executive Yuan

Hi-tech +

Recruitment

Hire +

Recruit

HumanResource

http://hirecruit.gov.tw


User

new uptate in Jan 07 for 06's data

29

Efficient Logistics OperationEfficient Logistics Operation

Advantageous geographic location in Asia-Pacific region

TaipeiTaipei 2h 55m2h 55m

SeoulSeoul 4h4h

TokyoTokyo 4h 15m4h 15m

ShanghaiShanghai 3h 25m3h 25m

Hong KongHong Kong 3h 05m3h 05m

ManilaManila 3h 30m3h 30m

SingaporeSingapore 4h 55m4h 55m

SydneySydney 6h 15m6h 15m

Average Average Flying TimeFlying Time to to8 major Asia-Pacific cities8 major Asia-Pacific cities

Average Average Maritime Navigation Maritime Navigation to to 6 major Asia-Pacific harbors6 major Asia-Pacific harbors

Tokyo Tokyo 110h110h

Shanghai Shanghai 78h78h

Hong KongHong Kong 54h54h

KaohsiungKaohsiung 53h53h

SingaporeSingapore 124h124h

ManilaManila 68h68h


30



Ranking Harbor Country Capacity Growth Rate2005 2004 2005 2004

1 2 Singapore Singapore 2,319 2,133 8.7%

2 1 Hong Kong China 2,260 2,198 2.8%

3 3 Shanghai China 1,808 1,456 24.2%

4 4 Shenzhen China 1,620 1,365 18.7%

5 5 Busan South Korea 1,184 1,149 3.1%

6 6 Kaohsiung Taiwan 947 971 -2.5%

7 7 Rotterdam The Netherlands 929 829 12.0%

8 9 Hamburg Germany 805 700 14.9%

9 10 Dubai UAE 762 643 18.5%

10 8 Los Angeles USA 748 732 2.2%

Unit: 10,000 TEUWorld Port Handling Capacity Ranking

Source: Ministry of Transport and Communications

31


Almanac (2006):2004 Air Cargo Volume Ranking

1 Memphis-MEM (U.S.)

2 Hong Kong-HKG (China)

3 Tokyo-NRT (Japan)

4 Anchorage-ANC (U.S.)

5 Seoul-ICN (Korea)

6 Los Angeles-LAX (U.S.)

7 Frankfurt-FRA (Germany)

8 Singapore-SIN (Singapore)

9 Miami-MIA (U.S.)

10 Louisville-AIZ (U.S.)

11 Taipei-TPE (Taiwan)

12 New York-JFK (U.S.)

13 Chicago-ORD (U.S.)

14 Shanghai-SHA (China)

15 Paris-CDG (France)

Source: CAA, MOTT


http://www.time.com/time/

32


Transportation hubs to Southeast Asian countries, Europe and USA

34 cities in Asia 11 cities in Europe 14 cities in America

(Weekly) 582 Freighter Flights + 2,582 Passenger Flights

Source: CAA, MOTT

3 cities in Oceania 2 cities in Middle East Asia


33

Taichung Harbor

Kaohsiung Harbor

Keelung Harbor

C.K.S. Int’l AirportC.K.S. Int’l Airport

Central Int’l AirportCentral Int’l Airport

Kaohsiung Int’l AirportKaohsiung Int’l Airport


Global Distribution Centers in Taiwan 13 multinational companies set up global distribution centers

Source: IDB, MOEA


http://www.appliedmaterials.com/index.html

http://www.bayer.com/

http://www.intel.com/index.htm?iid=HPAGE+header_intellogo&

http://www.hitachi.com/index.html

http://www.bayer.com/

http://www.ibm.com/tw/

34

Gateway to China and the ASEAN MarketsGateway to China and the ASEAN Markets

Taiwanese Investors in China(Approved by MOEA, Taiwan)

1090

1297

20041837

1490

1186

840

488641728

383490

934

1262

264237

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

~199

119

9219

9319

9419

9519

9619

9719

9819

9920

0020

0120

0220

0320

0420

0520

06

Inve

stm

ent

(Mill

ion

US

$)

0

500

1,000

1,500

2,000

2,500

Num

ber o

f A

pplic

ants

Source: DOIS, MOEA


35

Gateway to China and the ASEAN MarketsGateway to China and the ASEAN Markets

Source: DOIS, MOEA

Taiwanese Investors in China

5,305

11,631

4,8815,085

1,840858 1,056 869 498 358 496 192 285 218 175

1,688

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

Inve

stm

ent

(Mill

ion

US

$)

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Nu

mb

er o

f Cas

es

Investment Amount

Approved Cases


36

Gateway to China and the ASEAN marketsGateway to China and the ASEAN markets

Overseas Taiwanese Investors in the ASEAN Countries

0

500

1,000

1,500

2,000

2,500

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

Nu

mb

er o

f In

vest

men

ts

Malaysia

Thailand

Vietnam

Indonesia

Philippines

Singapore

Cambodia

Sources: DOIS, MOEA


37


Gateway to China and the ASEAN markets Gateway to China and the ASEAN markets

Taiwanese Investors in Major ASEAN Countries Taiwanese Investors in Major ASEAN Countries (up to November 2006)(up to November 2006)

Source: DOIS, MOEA

1st in Vietnam US$8,050.06

3rd in Cambodia US$524.00

3rd in Thailand US$11,852.64

3rd in Malaysia US$9,719.83

6th in Indonesia US$13,844.37

6th in Philippines US$1,343.89

7th in China US$53,657.19

Unit: Million US$

38

Overseas Taiwanese Investors in the ASEAN Countries

$-

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

Ac

cu

mu

late

d I

nv

es

tme

nts

(M

illi

on

US

$)

Malaysia

Thailand

Vietnam

Indonesia

Philippines

Singapore

Cambodia


Gateway to China and the ASEAN marketsGateway to China and the ASEAN markets

Sources: DOIS, MOEA

39


Sourcing & Marketing through Taiwanese Sourcing & Marketing through Taiwanese

Based in

TAIWAN

Sourcing with TAIWANESE investors all over

ASIA

AccessEUROPEANMarkets

AccessASEAN

Markets

AccessCHINA

Market

Access

AMERICAN

Markets

40

96.8%

6.0%

30.6%

60.2%

3.2%

OtherTOP 20

US

CJ K

Europe

TOP 9

US IPO's

TOP 8

CJK IPOs

Top 3

European

IPOs

TOP 20

IPOs &

Growth

2005 41.0 19.3 3.7 64.0

2006 Est. 44.1 22.43 4.4 70.93

2006/2005

Growth (%)7.6% 16.2% 18.9% 10.83%

US, CJK and European Estimates of total Procurement in Taiwan 2005-2006

Source: Respective companies’ IPOs in Taiwan, OCIID/MOEA, MIC/III, Survey of IPO Purchasing in Taiwan in 2006, December 2006

IPO 2006 Procurement Breakdown


2006—Top 20 IPOs Total Procurement in Taiwan

Sourcing and Marketing Through TaiwaneseSourcing and Marketing Through Taiwanese

Unit: US$B

Total IPO procurement in 2006—US$73.3 billion

Top 20 IPO procurement in 2006—US$70.93 billion, a 10.83% increase from 2005

41


2006—Top 20 IPOs in Taiwan

Sourcing and Marketing Through TaiwaneseSourcing and Marketing Through Taiwanese

Source: Industrial Development Bureau, MOEA

United StatesChina, Japan,

KoreaEuropean

companies

http://www.cisco.com/en/US/hmpgs/index.html

http://www.motorola.com/

http://thenew.hp-ww.com/country/tw/chi/welcome.html

http://www.ibm.com/tw/

42

Investment Cost Analysis

43

Tax structure Investment incentives Commercial offices costs Human resources (Hi-tech & working

labor by sector) Site Sections

Investment Cost AnalysisInvestment Cost Analysis

Enticing Incentives for InvestmentsEnticing Incentives for Investments

44

Classification of taxes and collection Authority

NTA/National Taxes City/County Tax Office/Municipal Taxes

Income Tax Land Tax

Estate and Gift Tax Building Tax

Business Tax (VAT and Non-VAT) Deed Tax

Commodity Tax Amusement Tax

Tobacco and Wine Tax Stamp Tax

Securities Transaction Tax Vehicle License Tax

Mining Lot Tax

Source: Deloitte& Touche Taiwan Compile


Tax Structure (6-1) Tax Structure (6-1)

45

Profit-seeking enterprise income tax rates

Taxable Income Bracket (NT$) Tax Rate

Under $50,000 None

$50,000-$100,000 15% of total taxable income but the income tax liability shall not exceed 50% of the portion of taxable income over $50,000

Over $100,000 25% on the portion of taxable income over $100,000

Source: Deloitte& Touche Taiwan Compile



46

Taiwan Double Taxation Agreements (Comprehensive)-1

Country Date of Signing Effective Date

Australia 5/29/1996 10/11/1996

Gambia 7/4/1998 11/4/1998

Indonesia 3/1/1995 1/12/1996

Macedonia 6/9/1999 6/9/1999

Malaysia 7/23/1996 2/26/1999

New Zealand 11/11/1996 12/5/1997

The Netherlands 2/27/2001 5/16/2001

Singapore 12/30/1981 1/1/1982

South Africa 2/14/1994 9/12/1996

Source: Taxation Agency, Ministry of Finance



47

Taiwan Double Taxation Agreements (Comprehensive)-2

Country Date of Signing Effective Date

Vietnam 4/6/1998 5/6/1998

Swaziland 9/7/1998 2/9/1999

UK 4/8/2002 12/23/2002

Paraguay 4/28/1994 -

Senegal 1/20/2000 9/10/2004

Thailand 7/9/1999 -

Sweden 6/8/2001 11/24/2004

Philippines 5/29/2002 -

Belgium 10/13/2004 initialed -

Source: Taxation Agency, Ministry of Finance



48

Country S: Shipping

A: Air Transport

Date of Signing Effective Date

Canada A 7/10/1995 Date of signing

EU S 8/1/1990 Date of signing

Germany S 8/23/1988 Date of signing

Israel S 6/30/1998 Date of signing

Japan S&A 9/4/1990 Date of signing

Korea S&A 12/10/1991 Date of signing

Luxembourg A 3/4/1985 Date of signing

Macau A 12/18/1998 2/26/1999

The Netherlands S 6/7/1989 1/1/1988

Norway S 6/7/1991 Date of signing

Thailand A 6/30/1984 Date of signing

United States S&A 5/31/1988 Date of signingSource: Taxation Agency, Ministry of Finance


Tax Structure (6-5)Tax Structure (6-5)

Taiwan Double Taxation Agreements (Shipping or Air Transport)

49

Tax Incentives

Government Participation in Investment

Non-Tax Incentives

Low-Interest Loans

Web Information

Source: Industrial Development Bureau & Department of Industrial Technology, MOEA


Investment Incentives Investment Incentives

50

Company Emerging, Important, and Strategic

Industries Private Participation in infrastructure

Projects Establishment of Logistics and Distribution

Centers Free Trade Port Establishment of Operation Headquarters Indirect Tax Incentives for Science-Base

Industrial Park/Economic Processing Zones And more


Tax Incentives Tax Incentives

1365

51

11 Incentive for Research & DevelopmentIncentive for Research & Development

22 Incentive for Personnel TrainingIncentive for Personnel Training

33 Incentive for New Equipment or TechnologyIncentive for New Equipment or Technology

Company



52

Industry For Automation, Greenhouse Gas Emissions Reduction, and Promotion of an Enterprise’s Digital Efficiency

New Equipment

New Technology

Minimum Investment

Telecommunication, manufacturing, technical services

11% 10% NT$600,000

Construction 8% 5% NT$2,000,000

Communication,movie production, agriculture, waste recycling, wholesale and retail

8% 5% NT$600,000

Incentives for New Equipment or Technology (Tax Reduction Rates)



53

Investment Tax Credit for ShareholdersInvestment Tax Credit for Shareholders

IncentiveIncentive

Five-Year Tax Holiday for CompaniesFive-Year Tax Holiday for Companies

IncentiveIncentive

Emerging, Important, and Strategic Industries



54

For more informationPlease go to

www.moeaidb.gov.tw

Information Industry

AerospaceIndustry

Biotechnology Industry

Digital Content

Industry

Emerging, Important, and Strategic Industries

Telecommu-nications Industry

Source: Industrial Development Bureau



55

Private Participation in Private Participation in Infrastructure ProjectsInfrastructure Projects

Private Participation in Private Participation in Infrastructure ProjectsInfrastructure Projects

Five-Year Tax Holiday for a Private Instituti

onIndirect Tax Incentiv

es

New Equipment or Technology or Research & Development or Personnel Training

Investment Tax Credit for Shareholders



56

A confirmation letter from the IDB & Tax return reviewed by the CPA1.

2.

3.

Please go to www.moeaidb.gov.tw/portal/english/regulation.jsp for detailed information

4.

Establishment of Logistics and Distribution Centers

The sales of products stored shall be over USD6,060,5610 for distribution

The export sales is over US$3,030,300 or 10% of the total sales



57

Free Trade Zone

Fre

e T

rad

e

Zon

e

Ship or airplane arrival

Area for simple processing, warehousing, and transshipping

Movement of imported or exported goods

Customs territory, bonded zone

In-depth value-addedprocessing area

BusinessService center

Movement of people

The breakthroughs:

1.Exemption from customs clearance

2.Tax exemption3.Granting selective

landing visa for foreign business personnel

4.Autonomous management



58

Facilitating business activities

(streamlining procedures for granting entry and issuing landing visas to business personnel; providing exhibition facilities and services)

Ease of financial operations

(permitting setup of holding companies for offshore investment, and allowing OBUs to handle foreign-currency transactions)

Rooting deeply in Taiwanwhile deploying globally

Within physical territory, but outside the customs territory

(autonomous management; exempted from customs checking and

inspection, as well as cargo tracking and escort)

Duty & tax exemption(exempt from customs duties,

commodity tax, sales tax, tobacco and wine excise tax)

Relaxing hiring ratiofor foreign workers

Allowing in-depth value-added processing

(e.g. assembling, packaging,

manufacturing)

Free Trade Zones

The incentives for attracting businesses to free trade zones



Source: CEDI, CEPT, Executive Yuan

59

Taxation measures for Free Trade Zones

Customsterritory

Other free trade zones

Gate

Bonded zones,EPZs,

Science parksFTZ

enterprise

FTZenterprise

Tax exemption for transshipping goods and facilities used by the businesses

In compliance with regulations for bonded goods

0 Sales TaxExempted taxes ：

Customs duties,

commodity tax, sales tax,

tobacco and wine excise tax, public health and welfare dues on tobacco products, trade promotion service fees, and harbor service dues

In compliance with regulations for exported goods

Gate

1. In compliance with regulations for imported goods

2. Special regulations for goods processed within FP and transported back to FP

Tax exempted

FreeTrade Zone



60

11

22

33

Establishment of Operation Headquarters

A confirmation letter from the IDB & Tax return reviewed by the CPA

Incentives for Provision of Talent

Please go to www.moeaidb.gov.tw/portal/english/regulation.jsp

for detailed information



61

Tax Exemption on the Payment of RoyaltyTax Exemption on the Payment of RoyaltyAA

Deferment on the Payment of Income Taxes on Stock Acquired in ExchangeDeferment on the Payment of Income Taxes on Stock Acquired in Exchange

BB

Stock Options on Stock Acquired in ExchangeStock Options on Stock Acquired in ExchangeCC

Acquisition of Related Technologies on Operation and Production



62

Indirect Tax Incentives for Science-Based Industrial Park/Economic-Processing Fee/Bonded warehouse

Indirect Tax Incentives Economic Processing Zone

Science-Based Industrial Park

Bonded Factory/ Warehouse

Import of raw materials, fuel, supplies,

semi-finished material from foreign country

Duty-Free/ VAT-Free Duty-Free/ VAT-Free Duty-Free/ VAT-Free

Import of machinery Duty-Free/ VAT-Free Duty-Free/ VAT-Free Dutiable 5% VAT (refundable)

Export of its product/service to foreign country

0% VAT 0% VAT 0% VAT

Purchase of raw materials, fuel, supplies, semi-finished material,

machinery from ROC tax area

0% VAT 0% VAT 0% VAT

Source: Deloitte& Touche Taiwan



63

AA

BB

Measures for Encouraging the Development of Leading New Products

Corporate Participation in the Development of Technology


Non-Tax Incentives Non-Tax Incentives

64

Industrial Technology DevelopmentProgram (ITDP)

Industrial Technology DevelopmentProgram (ITDP)A

B

A

B

A

B

Industrial Technology Development Alliance Program (ITDAP)

Strategic Service Oriented Research & Development Program (SRD)Industrial Technology InnovationCenter Program (MNCD)

Multinational Innovative R&D Centers in Taiwan (MNCF)Small Business Innovation ResearchProgram (SBIR)

Corporate Participation in the Developmentof Technology

Source: DOIT http://innovation.tdp.org.tw


Non-Tax Incentives Non-Tax Incentives

65

And more…..

Loans for improving the

industrial structure or upgrading

industries

Loans for entire economical development

Loan-Tern Loans for promoting private

participation in infrastructure

projects

Loans for environmental protection and

energy conservation

Loans for strengthening

R&D & financing economic

development plans

Source: Development Fund, Executive Yuan


Low Interest Loan Low Interest Loan

66

Development Fund of the Executive Yuanhttp://www.df.gov.tw/english/index3.html

Council for Economic Planning and development (CEPD), Executive Yuanhttp://www.cepd.gov.tw/encontent/index.jsp

Small and Medium Enterprise Administration, Ministry of Economic Affairshttp://www.moeasmea.gov.tw/eng/index.asp

Industrial Development Bureau, Ministry of Economic Affairshttp://www.moeaidb.gov.tw/portal/english/index.jsp

Website Information



Low Interest Loan Low Interest Loan

67

Not exceed 49% of the total equity of the investedenterprise

Not exceed 49% of the total equity of the investedenterprise

PrinciplesPrinciples

Historically focused on Industries such as petrochemicals & semiconductors

Historically focused on Industries such as petrochemicals & semiconductors

Priority-1Priority-1

Lately focused on 10 emerging industries such as information, telecommunications, aerospace, digital contents & biotech

Lately focused on 10 emerging industries such as information, telecommunications, aerospace, digital contents & biotech


Currently on strengthening venture capital investment in innovative industries.

Currently on strengthening venture capital investment in innovative industries.



Government Participation in Investment Government Participation in Investment


68

Authorities Website

Development Fund,

Executive Yuan

http://www.df.gov.tw/english/index.html

Industrial Development Bureau http://www.moeaidb.gov.tw/idy/english/index.htm

Department of Investment Services

http://investintaiwan.nat.gov.tw/en/

Council for Economic Planning and Development, Executive Yuan

http://www.cepd.gov.tw/encontent/index.jsp

Small and Medium Enterprise Administration, Ministry of Economic Affairs

http://www.moeasmea.gov.tw/eng/index.asp


Website Information Website Information

69

Major Asian City Property Rate


01,000

2,0003,000

4,0005,000

6,0007,000

8,0009,000

10,000

Hong Kong

Tokyo

SeoulShanghai

Singapore

Beijing

Taipei

Bangkok

Jakart

a

Kuala Lumpur

2005 Q2 2006 Q2

Ren

t

(pin

g/m

on

th)

*Currency: NT$

*1 ping = 3.305 m²

Source: Jones Lang LaSalle Research

70

Area Occupancy rate Rent

(1 ping = NT$/month)

Hsin Yi District 77.0% $2,490

Min Sheng/

Tun Hwa North District87.1% $2,270

Tun Hwa South District

94.0% $2,320

Non-core Business District

90.5% $2,110

Taipei City 85.4% $2,330

2006 Grade A Office Market

*1 ping = 3.305 m²



71

Market Trend for Business Properties in Taipei City



$1,800

$2,000

$2,200

$2,400

$2,600

$2,800

$3,000

1992 1994 1996 1998 2000 2002 2004 2006 2008 F

Ren

t (p

ing

/mo

nth

)

0%

4%

8%

12%

16%

20%

24%

28%

Actual Contract Rate Vacancy Rate

*1 ping = 3.305 m²

*Currency: NT$

72


Office Rates and More…

According to studies conducted by Jones Lang LaSalle Research, grade A business offices in central and

southern Taiwan offer very competitive prices. Top office prices range from NT$400~800/ping per month,

an average lease of NT$500~600/ping per month.

Please contact Jones Lang LaSalle Research in Taiwan for additional information:

Jones Lang LaSalle

www.joneslanglasalle.com.tw

Tel: 886-2-8758-9898Fax: 886-2-8757-9899

20F-1, Taipei 101 Tower, No. 7, Xinyi Rd., Sec. 5,

Taipei 11049, Taiwan


73


Key Labor Indicators

2005 2006 Economic Growth Rate (based on GDP)

3.63% 4.32 %

GNP Per Capita US$ 15,455 US$ 16,024

Minimum Wage NT$ 15,840 (US$465) NT$15,840 (US$ 465)

Average Wage NT$ 26,074 (average worker)

NT$ 50,469 (executive-level)

NT$ 26,266 (average worker)

NT$ 47,630 (executive-level)

Labor Force 10.3 Million 10.6 Million

Participation Rate 57.63% 58.15% (November 2006)

Unemployment Rate 4.12% 3.86% (November 2006)

74

Start-up SalaryStart-up Salary

Graduate school degree

University degreeCommercial

College degreeHigh school degree

(and below)

Administration NT$32,104 NT$28,238 NT$26,286 NT$22,463

Finance

AccountingNT$33,345 NT$29,334 NT$26,335 NT$22,652

Production

Quality controlNT$34,531 NT$29,575 NT$27,144 NT$25,409

R&D NT$36,504 NT$30,352 NT$27,097 NT$22,925

Sales NT$33,371 NT$30,143 NT$27,589 NT$23,932

MarketingCustomer Relations

NT$34,534 NT$29,799 NT$27,324 NT$22,970

Operations NT$33,271 NT$25,374 NT$23,371 NT$20,895

Average NT$33,951 NT$28,974 NT$26,449 NT$23,035


Source: Hrfun Management Consultant

75

Major Industries Monthly IncomeMajor Industries Monthly Income

Item unit: % NT$0~19,999NT$20,000

~29,999NT$30,000

~39,999NT$40,000

~59,999NT$60,000and above

Averagemonthly income

Agriculture, fishing & animal husbandry 47.01 32.7 13.8 5.39 1.12 NT$21,604

Goods-producing industries 9.96 35.58 31.19 17.82 5.45 NT$32,622Mining & quarrying 1.78 21.69 41.67 20.13 14.73 NT$38,671Manufacturing 11.12 37.72 29.48 16.09 5.58 NT$32,099

Electricity, gas & water 3.68 11.07 14.67 35.35 35.24 NT$51,564

Construction 6.16 29.21 38.08 23.14 3.41 NT$33,504

Services-producing industries 11.52 28.51 26.57 23.61 9.8 NT$35,912

Trade 13.16 39.36 29.48 14.27 3.72 NT$30,278

Accommodation & food 31.43 42.62 17.72 7.63 0.6 NT$24,219

Transport, storage & communication 3.08 22.4 29.37 33.98 11.17 NT$39,268

Finance & insurance 3.03 16.14 33.67 29.95 17.21 NT$44,518

Real estate & rental & leasing 8.21 35.79 24.51 26.27 5.22 NT$33,431

Professional, scientific & technical services 4.3 22.85 31.81 27.3 13.73 NT$40,451

Education services 10.13 18.53 18.19 34.18 18.97 NT$41,939

Healthcare & social welfare services 6.69 25.65 26.02 30.37 11.27 NT$41,382

Cultural, sporting & recreational services 9.61 31.87 27.85 20.23 10.43 NT$35,507

Other services 21.46 39.91 29 8.69 0.94 NT$26,714

Public administration 5.89 7.88 20.63 44.78 20.82 NT$45,909Source: Directorate-General of Budget, Accounting and Statistics


76


Application Procedure Application Procedure

77

WHERE TO INVEST IN TAIWAN

78

WHERE TO INVEST IN TAIWAN

• Science & Industrial Parks

• Biotech Parks

• Free Trade Zones

• Export Processing Zones (EPZ)

• Environmental Science & Technology Parks

(ESTP)

• Software Parks

79

Where to Invest in Taiwan

【 6-1 】 Science & Industrial ParksScience & Industrial Parks

Central Taiwan Science Park (509 ha.)

Optoelectronics, IC, PC/Peripherals, Telecom, Machinery, Biotechnology

Southern Taiwan Science Park(1,038 ha.)

Optoelectronics, Telecom, IC, PC/Peripherals, Biotechnology

Hsinchu Science Park(632 ha.)

Optoelectronics, Biotechnology, IC,PC/Peripherals, Machinery, Telecom

http://www.sipa.gov.tw

http://www.ctsp.gov.tw

http://www.stsipa.gov.tw

Taichung Harbor

Kaohsiung Harbor

Keelung Harbor




http://www.nsc.gov.tw

80

Keelung Harbor

【 6-2 】 Biotech ParksBiotech Parks

Hsinchu Biomedical Science Park

Changhua Flower Plantation Park

Chiayi Spice and Herb Biological Technology Park

Tainan Orchid Plantation Park

Ilan Oceanic Biotechnology Park

Kaohsiung Biotechnology Park (STSP)

Pingtung Agricultural Biotechnology Park

http://www.coa.gov.tw


81

【 6-3 】 Free Trade ZonesFree Trade Zones

http://www.cepd.gov.tw

Keelung Harborhttp://www.klhb.gov.tw

Taipei Harborhttp://www.tpport.gov.tw

Taichung Harborhttp://www.tchb.gov.tw

Kaohsiung Harborhttp://www.khb.gov.tw

C.K.S. Airporthttp://www.cksairport.gov.tw


82

【 6-4 】 Export Processing Export Processing Zones Zones

Pingtung EPZ (124.1 ha.)

Linkuang EPZ (9.0 ha.)

Kaohsiung EPZ (72.3 ha.)

Nantze EPZ (97.8 ha.)

Chungkang EPZ (177 ha.)

Taichung EPZ (26.2 ha.)

http://www.epza.gov.tw

Chengkung Logistics Park (40.3 ha.)

Kaohsiung Software-based Technology Park (54.5 ha.)

Taichung Harbor

Kaohsiung Harbor

Keelung HarborC.K.S. Int’l AirportC.K.S. Int’l Airport




83

Taichung Harbor

Kaohsiung Harbor

Keelung Harbor




【 6-5 】 Environmental Science & Technology Parks (ESTP)Environmental Science & Technology Parks (ESTP)

Taoyuan ESTP31 hectares

Hualien ESTP22.01 hectares

Tainan ESTP30 hectares

Southern ESTP 40.11 hectares

http://ivy3.epa.gov.tw/H/ESTP/en/index.htm


84

【 6-6 】 Software ParksSoftware Parks

Taichung Harbor

Kaohsiung Harbor

Keelung Harbor




http://www.taipei.gov.tw

http://www.kaohsiung.gov.tw

Nankang Software ParkLocation: Taipei City

8.2 hectares

Kaohsiung Software Tech ParkLocation: Kaohsiung City

8.9 hectares


85

TAITRA’sBusiness Alliance Services

TAITRA Helps You Build Strategic Partnership TAITRA Helps You Build Strategic Partnership

to Shape Tomorrowto Shape Tomorrow

86

TAITRA

Partially supported by the government and

commercial/industrial associations

Various trade-related services tailor-made to meet business people’s

needs

Comprehensivedatabase listing of

Taiwan manufacturersand country information

Direct marketing channels through45 branch offices around the world

TAITRA’s Business Alliance ServicesTAITRA’s Business Alliance Services

TAITRA’s Roles and Functions TAITRA’s Roles and Functions

87

11 Information for setting up operations Information for setting up operations

22 Arranging fact-finding tours Arranging fact-finding tours

33 Recommending strategic partnersRecommending strategic partners

44 Free CPA consultation for 1 hourFree CPA consultation for 1 hour

55 Evaluation for site selectionsEvaluation for site selections


TAITRA’s Roles and Functions TAITRA’s Roles and Functions

88

STEP3

R&D

Marketing &

Branding

STEP3

R&D

Marketing &

Branding

STEP2

LogisticsSTEP2

Logistics

STEP1

AssemblySTEP1

Assembly

Innovation

Innovation

Value Chain

Value Chain


Positioning of FDI Positioning of FDI

89

Target: private equities &industrial integrationIn cooperation with:Investment bankingCPA

Target: private equities &industrial integrationIn cooperation with:Investment bankingCPA

M&AM&A

Int’l Distribution CenterHeadquartersR&D & Innovation Center

Int’l Distribution CenterHeadquartersR&D & Innovation Center

OthersOthers

In cooperation with:ITRIIncubation centersIndustrial promotion entities

In cooperation with:ITRIIncubation centersIndustrial promotion entities

Technology TransferTechnology Transfer

Target: Integration ofresourcesIn cooperation with:TAITRA’s databasesIndustrial associations

Target: Integration ofresourcesIn cooperation with:TAITRA’s databasesIndustrial associations

JVJV


Strategic Investments Strategic Investments

90

AmericaUSA, Canada

EuropeUK, Germany, Holland, France, Italy

Asia Japan, HK, Korea, India

OceaniaAustralia


Target Market Target Market

91

•Good strategic location (located beside TWTC and Taipei 101)

•Professional consultation on investment and industrial information

•Trade Data Library

•Efficient secretarial service

A one-stop service solution!A one-stop service solution!


TWTC International Business Center (IBC) TWTC International Business Center (IBC)

Instant Furnished Office

92

Standard OfficeStandard Office

Complete furnished office:42 m2

Desks, chairs, cubicle dividersTelephoneTable-top drinking water dispenserFlame-retardant carpetPC & printer

LoungeLounge

123 m2

Conference space


TWTC International Business Center (IBC) TWTC International Business Center (IBC)

93


Suggested Contents:•Brief description of the project•Description of investor•Site description•Production plan•Description of technology•Investments•Operation costs•Profitability studies•Customers profit and loss, balance sheet, or any other useful information

In order to provide a better service that caters to your business, we strongly recommend the

provision of a business plan upon contacting us

94

Contact Person Area-in-Charge Contact Information

Ms. Emilia Shih Section Manager Ext.: 1371E-mail: [email protected]

Ms. Sally Sha France, Germany, the Netherlands

Ext.: 1341E-mail: [email protected]

Ms. Jenyow Wang Canada (Vancouver), USA (San Francisco & Miami)


Ms. Angelica Hao China, India, Korea, UAE Ext.: 1320E-mail: [email protected]

Ms. Stella Lin Italy, United Kingdom, Scandinavian countries


Ms. Catherine Fan Canada (Toronto)USA (Chicago & New York)


Ms. Janet Hsu Japan Ext.: 1321E-mail: [email protected]

Ms. Claudia Lee Australia, Hong Kong, Southeast Asia

Ext,: 1389E-mail: [email protected]


Our Team Members Our Team Members

95

Contact Us

Taiwan External Trade Development CouncilTaiwan External Trade Development Council

5th Fl., 333 Keelung Road, Sec. 1, Taipei 11012, Taiwan, R.O.C.5th Fl., 333 Keelung Road, Sec. 1, Taipei 11012, Taiwan, R.O.C.Tel: +886-2-27255200 Tel: +886-2-27255200 Fax: +886-2-27576610Fax: +886-2-27576610E-mail: [email protected]: [email protected]://www.taiwanalliance.com.twhttp://www.taiwanalliance.com.twhttp://www.taiwantrade.com.tw http://www.taiwantrade.com.tw

Business Alliance SectionBusiness Alliance SectionStrategic Marketing DepartmentStrategic Marketing Department

96

TTHHAANNK K YYOOUU

© ALL RIGHTS RESERVED.

Documents

1 Taiwan External Trade Development Council Business Alliance Section Strategic Marketing Department YOUR GATEWAY TO ASIA Taiwan