A selection of the advantages of starting a business in Taiwan include: Its geographical location, educated workforce, excellent infrastructure, a sound legal environment, and a strong IT cluster.

Advantageous Geographical Position

Located at the heart of the Asia-Pacific region, Taiwan has many advantages related with transportation. The average flying time from Taiwan to the seven major cities in Western Pacific is merely 2 hours and 55 minutes. And the average sailing time from Taiwan’s largest international harbor Kaohsiung harbor to the 5 major Asia-Pacific harbors (Hong Kong, Manila, Shanghai, Tokyo and Singapore) is merely 53 hours.

After the opening of cross-strait direct links, Taipei has become the hub of the dual golden routes in Asia-Pacific. The routes from Taipei go north to Tokyo and Seoul, west to Shanghai, south to Hong Kong, Singapore and the capitals of the ASEAN countries.

I have friends in Shanghai and Xiamen and before the direct links I had to fly via Hong Kong. I understand the military and political reasons for the previous ban on direct traffic, but when a 2 hour trip takes a whole day, it feels all wrong. On a personal level.

Intellectual Advantage

According to WEF’s “2011 World Competitiveness Report” Taiwan ranks number 6 in the world because of abundant R&D talents. According to the “Science and Technology Development Survey” conducted by the National Science Council, the number of researchers for every thousand employees in Taiwan has grown stably, which are higher than the US. In addition, the number of researchers for every thousand employees in Taiwan is 10.6 person-year behind only Finland and the same with Japan, slightly higher than 9.6 person-year in the United State. Moreover, the research workforce has grown in recent years.

Looking at the numbers, Taiwan also has an advantage on higher educated workforce. 43.7% of the workforce has a college degree, university or higher education background. According to the statistics released by the Directorate-General of Budget, Accounting and Statistics in 2010, college and higher educated population accounted for 37.4% of the population at age above 15 years old. Taiwan has a workforce of about 10 million people, accounting for about 48.07%of the total population. Every year, 320 thousand students are graduated from college, university or higher education.

This doesn’t tell the whole story however.

Complete Infrastructure

Currently, Taiwan has two international airports-Taoyuan and Kaohsiung airports, and 7 international harbors, consisting of Kaohsiung harbor, Keelung harbor, Taichung harbor, Hwalian harbor, Anping harbor, Suaou harbor and Taipei harbor, in the order of their business volume. Taiwan has complete international transportation facilities and logistic capability. Furthermore, Taiwan has passenger transportation systems, railways, highways and domestic airports for domestic long distance transportation. Taiwan has complete railway networks throughout the island. The high speed railways started operations in 2005, which has tremendously reduced the traveling time between north and south Taiwan. Domestic airports are available in Taipei, Taichung, Hwalian, Taitung, Chiayi, Tainan, Pingtung, Kinmen and Machu. The metropolitan areas are being developed with MRT systems, including the Taipei MRT and the Kaohsiung MRT systems, which make the metropolitan life more convenient.

The internet penetration rate is high in Taiwan. About 70% (71.7%) of households have access to the internet, 80% (79.3%) have computers, 90% of the households with the internet access use 2Mbps or faster broadband. According to the “World Knowledge Competitiveness Index 2008” published by the World Competitiveness Center of the University of Wales Institute, Cardiff (UWIC), Taiwan receives a score of 157.7 on “Broadband Penetration Rate Index”, ranks 6th in the world among the 145 regions surveyed, behind only to Iceland, South Korea, Hong Kong, Holland and Denmark, surpassing Singapore and Japan.

Sound Legal Environment

Taiwan’s level of protection for foreign investment is very high. The people in Taiwan have matured legally. The protections for foreign investment are clearly stipulated in the foreign investment regulations. As legal education is promoted, the people and enterprises in Taiwan have good legal concepts. The predictability and stability of their actions have increased. The society is in good order and investment environment is secure. Almost all of the accounting systems in Taiwan conform to international standards. The deregulation for cross-strait policies further puts Taiwan in a more advantageous position than Hong Kong and Macao for investment.

The government has regarded the protection of intellectual property rights a very important issue. To create a better system and environment for IP protection, the government has actively made policies and taken measures to protect inventions and the authors’ efforts to encourage innovative inventions. A dedicated court and a policeman team are established to protect IP rights, and related laws and regulations are also passed. These actions have won international community’s recognition. In 2009, Taiwan is removed from the US government’s 301 watch list, which is recognition of Taiwan’s progression and enforcement in IP protection.

Strong IT Industrial Cluster

Have you ever heard about these brand names; HTC, Asus, Acer? Of course, I’m sure you’ve heard because they are one of prospective Taiwanese IT brands! Taiwan’s technologies in high-tech industry have been on track of international trend. Currently, Taiwan has the highest industrial cluster density. Taiwan’s IT competiveness mainly relies on superior high-tech infrastructure and R&D talents. Taiwan has become the global supply base for high-tech products. Taiwan’s industrial cluster development ranks number one in the world in WEF’s “World Competitiveness Report 2008-2009”.

Furthermore, with strong OEM/ODM capabilities, Taiwan companies have been the important partners of global brand names. Along with the increase of overseas investment, the proportion of overseas production to order received has also increased. According to the statistics of the Industrial Technology Research Institute, more than 20 Taiwan high-tech products rank top three in the world, including circuit wafer DEM, LCD and DRAM, etc. Many of these products have more than 50% of global market share. Like this, Taiwan has played a key role in the international supply chain. Since 1980s, Taiwanese ODM/OEM has established good cooperation relationships with well-known European and American brands, and is also a key part in the international supply chain in the high-tech industry. According to the statistics released by the Institute for Information Industry in 2008, Taiwan’s products made up 85% and 80% for the installed Windows PC related products and network communication equipment in the global market respectively.

For more information about the investment climate in Taiwan, you can visit Taiwan Review and Invest in Taiwan. They have abundant up-to-date information relating to investing in Taiwan.