Taiwan has an excellent investment climate. Over the past forty years, Taiwan has persistently promoted and encouraged the spirit of free enterprise to attract foreign investment to Taiwan. After consistent attempts to internationalize and liberalize the economy, the laws and regulations for foreign investments have been amended in accordance with international practices to liberalize investment activities and create a more friendly business environment.

Business Environment and Costs

Taiwan has a stable economy and no external debts (In 2011, Taiwan officially paid off its debts to IMF). When evaluating the economic situation in Asia, most people would think of Japan as having a more developed and advanced economy. The truth is, even though Japan has a relatively large domestic economy on a global scale, it sill suffers from significant revenue deficits and large government debts in proportion to its GDP.

Taiwan provides a rather suitable environment for setting up a business in terms of expenses and policies. In respect to land costs, the commercial office rental in Taiwan is lower than that in Hong Kong. Take the most desirable office building for example, the rental in Hong Kong in 2011 is NT$17,600/ping (1 ping=3.3 square meters) while the rental in the Taipei 101 building is NT$3,500/ping. In addition, Taiwan government has continued to improve the administrative procedures for land acquisition, establishment of software companies, logistic and production facilities for both local and foreign companies by actively developing new science parks, industrial parks and free trade zones. Moreover, Taiwan provides a considerably lower cost environment for businesses as regard to utility costs, water costs, environmental costs, telecommunications costs and transportation costs in comparison to other countries. Another major government achievement is the health care system. Medical services are widely available, convenient, inexpensive, high quality and efficient.

Government Policies

A number of Asian countries such as Malaysia, Thailand, Indonesia and the Philippines, do not always allow foreigners to have 100% ownership in local companies. In these countries, foreign investors are required to engage local shareholders in order to carry out the business, especially businesses that are related to the retail or distribution sector as well as in the financial services and legal sector. The Taiwanese government, on the other hand, allows foreigners to own 100% of their company. Despite the fact that Taiwan has a list of restricted and prohibited types of businesses for foreign investors, the list is considered brief comparing to other Asian countries such as Thailand. While Thailand restricts foreigners from breeding silkworms and transacting antiques, Taiwan’s negative list seems to make more sense.


Taiwan is not only a politically free country, but it is also politically stable, particularly in comparison to its fellow Asian neighbours. At times it seems that Taiwan suffers from continuing political gridlock like Japan does, but overall, the political climate is rather balanced between the “blue party” and the “green party”.

An interesting yet controversial thing to know is that there is an extreme contrast between Taiwan’s domestic political situation and China’s. It is even a lot different from Hong Kong’s political status, which is defined by the “one country, two systems” policy. It is true that the Special Administrative Region status that Hong Kong has with China strategically gives foreign businesses better chances to enter the Chinese market. But now, it is also somewhat true for Taiwan and China since the signing of the Economic Cooperation Framework Agreement (ECFA) and its apparent effectiveness. However, I have friends who run businesses in China, and they say that everything is completely different from what is being heard, what is being seen, and what is being done.

Here are a few drawbacks that I found during research for foreigners who want to start a business in China:

• Multi-layered system which different government bodies share the foreign investment approval responsibility. Lack of communication and coordination amongst government agencies are oftentimes confusing to foreigners.

• Even with the ascension to WTO, virtually every aspect of a foreign investment may be subject to approval from a different governmental department at some stage of its formation, operation and winding-down including planning approval, tax, foreign exchange control, business registration, customs clearance, labor issues and ownership of land.

• Lack of transparency: many existing laws or regulations contain vague provisions with subjective standards.

• Intellectual property: the widespread infringement of IPR; software piracy, copyright and counterfeit of trademarked products is a concern to many foreign investors.

• Concerning the points mentioned above, I believe that Taiwan has a better business environment regarding intellectual property right.


Compared to other Asian countries like Singapore, India, and the Philippines, Taiwan of course, does not have an advantage when it comes to English proficiency. Though a certain amount of Taiwanese people does not feel comfortable speaking English, in my experience, they would still try their best to answer and help foreigners if they encounter any. In fact, I always say and believe that you can “smile” your way through bureaucratic procedures. And I have tried it myself, and it worked pretty well.

But still, I believe that Taiwan’s English education is more successful than that in Japan. There is generally very little English language fluency among the Japanese population, even in many major metropolitan locations. Moreover, Japanese is mostly the only language that is commonly used in most commercial and governmental settings.

Other Advantages

· According to Global Competitiveness Report 2011-2012, Taiwan ranks the third in Asia, only seconds to Singapore and Japan.

· Taiwan has strong information technology capability and innovation willingness.

· Taiwan has diverse cuisines, convenient living environment (Taiwan has the highest density of convenience stores in the world), and incredibly friendly people.

· Taiwan has all sorts of international schools for US, Europe, Japan and Korea students, meeting the needs of alien education up to senior high school level.


All things considered, it is fairly EASY for foreigners to start a business in Taiwan.

For more information, you can visit Taiwan Review and Invest In Taiwan. They have an abundance of up-to-date information relating to business and investment in Taiwan.